The distribution channel as source of secondary brand knowledge : The case of luxury fashion designer-retailer collaborations.

(1)

The distribution channel as source of

secondary brand knowledge

The case of luxury fashion designer-retailer collaborations

Salim Abousallam

Student number: 5965446

1st_{supervisor: drs. MBM J. Labadie} 2nd_{supervisor: drs. R.E.W. Pruppers}

(2)

ABSTRACT

The aim of this thesis is to investigate the extent of image transfer from a distribution channel to a luxury brand, determining the effects of a distribution channel collaboration on brand image, perceptions and purchase intentions. Despite a large stream of research on possible sources of secondary brand knowledge, the notion of channel associations has received little attention from researchers (Inman et al., 2004). There is no empirical study on the extent of brand association transfer through the distribution channel and its effects. This thesis aims to fill this gap, by focusing on the effects of channel associations in a particular market segment: luxury brands. In the context of designer-fast fashion retailer collaborations and the image misfit they represent, a channel collaboration was found to constitute a change in the associative network for the luxury brand Gucci, to lower quality perceptions and not to affect purchase intentions. A low fit collaboration did not lead to lower perceptions and purchase intentions, whereas brand familiarity was associated with a negative interaction effect on quality perceptions. The results of this study are

considered in light of a number of constraints, which introduce a number of opportunities for future research.

(3)

4.1 Brand equity 18 4.2 Brand associations 19 4.3 Image transfer 21 5. Hypotheses 23 6. Methodology 28 6.1 Research Design 28 6.2 Stimuli development 29 6.2.1 Qualitative interviews 29 6.2.2 Focus group 31 6.3 Operationalization 32 6.3.1 Independent variable 32 6.3.2 Dependent variables 33 7. Results 34 7.1 Respondents 34

(4)

7.3 Manipulation checks 36 7.4 Hypothesis testing 37 7.4.1 Transfer of associations 37 7.4.2 Outcome variables 47 8. Discussion 54 8.1 Findings 54 8.1.1 Image transfer 54

8.1.2 Quality perceptions and purchase intention 57

8.1.3 Fit and familiarity 58

8.2 Theoretical implications 60 8.3 Managerial implications 61 9. Conclusion 63 9.1 Summary 63 9.2 Limitations 65 9.3 Future research 66 References 67

Appendix A: Manipulated Collaboration Posters 69

Appendix B: Questionnaire 70

Appendix C: Gucci word cloud 76

(5)

1. INTRODUCTION

1.1 EXCLUSIVITY VS. ACCESSIBILITY

Luxury is traditionally associated with quality, status and exclusivity (Atwal & Williams, 2009). Presently, there seems to be a change in these perceptions either by luxury brand owners or its consumers: whereas quality and status remain important, exclusivity is out and accessibility is in. Atwal and Williams (2009) identify a recent development in the luxury market where middle-market consumers have seen a large increase in demand for upscale products that are not ‘out of reach’. The authors refer to this as the ‘luxurification of society’; the trend of consumers trading up for products that meet their aspiration needs.

A striking example of how these needs are being catered to is the collaboration between upscale fashion brands and ‘fast-fashion’ retailer H&M. A variety of haute couture brands hit the shelves in the past years, with Karl Lagerfeld, Stella McCartney and Versace as examples. The designer collaborations boost the retailer’s brand awareness by creating a huge buzz. These positive effects for H&M are undeniable: shoppers spending the night queuing on the pavements and stores selling out the designer’s entire collection in 30 minutes have become a yearly tradition. The effects on the participating luxury brands, on the other hand, remain ambiguous. Obviously, once the collaboration is finished, these luxury brands have to resume business as usual, catering to their usual, upscale clientele. Will the original clientele have changed their opinion about the brand? It’s not

unimaginable that the target consumer’s associations are affected negatively. These consumers are used to buying a brand that gives them a sense of status and prestige, which they feel may no longer be the case as the brand has been made available to such a wide audience.

Unfortunately, this question cannot be conclusively answered with the current literature. There is not much known on how existing associations with the distribution channel may transfer to the luxury brand, both for products targeted to the specific channel’s audience and for homogeneous products. When it comes to the latter, an example that comes to mind could be a luxurious perfume brand: would it matter forbrand perceptions and purchase intentions if the same perfume can be found in upscale, exclusive department stores but as well in your local warehouse store? A real-life example is the perfume ‘The

(6)

One’ by Dolce & Gabbana: the exact same product can be found in exclusive, luxury retailers but is also sold at Walmart.

The question posed above is related to the notion of association transfer, of which a useful and extensively studied framework is presented by Keller (2003). Keller (2003) states that any potential encounter with a brand has the opportunity to change its mental

representation and the type of information that appears in consumer memory.

Consequently, marketers often have to link or associate their brands with other sources to build or leverage knowledge, which are called secondary sources of brand knowledge. Common secondary sources of brand knowledge are other brands (alliances or

extensions), people (celebrity endorsers), things (events or causes) and places (country of origin or distribution channel). The impact and effect of most of these sources have been extensively researched and the research field has identified several moderating factors in the transfer of secondary brand knowledge, where in this context especially brand

extensions and cause-related marketing have received a fair amount of attention. Keller (2003) asserts that there are two basic questions when it comes to leveraging these sources:

- What do consumers know about the source?

- Does any of this knowledge affect what they think about a brand when it becomes linked to or associated with this source?

Inman, Shankar and Ferraro (2004) state that whilst the notion of channel associations offers conceptual appeal, it has received little attention from researchers. The authors have examined the moderating role of channel-category associations in consumer channel patronage by extending the literature on brand associations to the context of channels. However, this was a fairly exploratory study, and the most relevant finding is that for channels with a strong product association, manufacturers and retailers can leverage that association for competitive advantage. Inman et al. (2004) did not study how this

leveraging process would work and did not mention the possible transfer of brand image or knowledge through the distribution channel, which leaves a gap open for future research.

(7)

1.2 PROBLEM STATEMENT

Keller (2003) states that any potential encounter with a brand has the opportunity to change its mental representation. He presents a variety of possible encounters, in the form of sources of secondary knowledge. The impact and effect of most of these sources have been extensively researched, but the notion of channel associations has received little attention from researchers (Inman et al., 2004). There is no empirical study on the extent of brand association transfer through the distribution channel and its effects. This thesis aims to fill this gap, by focusing on the effects of channel associations in a particular market segment: luxury brands. Luxury brands face a trade-off between exclusivity and accessibility, which is often expressed in its choice of distribution channel, as the luxury image is partly derived by the location it is sold. Or, as stated by Kapferer (2012); “luxury is in the distribution”. This makes it the perfect context for researching possible effects of channel associations, especially with an eye to the trend of fast-fashion collaborations as described above. Furthermore, the literature field does not offer conclusive evidence on the possible effects of such a collaboration, as while the notion of channel associations should offer substantial conceptual appeal, has yet to receive adequate attention from researchers, according to Inman et al. (2004). The main research question this thesis aims to answer is the following:

What is the effect of a fast-fashion retail channel collaboration on luxury brand image, perceptions and purchase intentions?

1.2.1 SUB-QUESTIONS

In analyzing the abovementioned problem statement, this study will aim to provide an answer to the following sub-questions:

- How can secondary brand associations affect perceptions and purchase intentions? - What is the role of distribution channels in luxury brand performance?

- What is the role of perceived channel fit and familiarity in channel association transfer?

(8)

1.2.2 DELIMITATIONS

Inman et al. (2004) assert that the notion of channel associations offers conceptual appeal, but that it has received little attention from researchers. Now, almost a decade later, no substantial progress has made in this area of research. Despite this, the focus of this thesis will be specifically on luxury brands and not on distribution channel associations in general, which is a promising field of research as well. The reason for focusing on luxury brands is twofold. Firstly, distribution plays a key role in luxury management (Kapferer, 2012). That means luxury brands are a perfect setting for determining distribution

association transfer. Secondly, according to Keller (2009), there currently exists a trade-off in the luxury market between exclusivity and accessibility which needs to be studied in future research. By focusing on luxury brands this thesis will be able to address this trade-off as well, as it is expressed in the choice of distribution channel. Furthermore, an

important delimitation is the focus on collaborations with fast-fashion retail channels. These represent an obvious image misfit with luxury brands and as such, combined with the recent increase of these collaborations, will provide an adequate ground for testing the hypotheses.

1.3 CONTRIBUTION

Theoretically, this thesis will contribute by providing empirical evidence in the untapped field of research that is distribution channel associations. Primarily, the study will build from the notion by Keller (1993, 2001, 2003) that brand knowledge is based on the associations held in memory for the brand and will examine the role of the distribution channel as source of secondary brand knowledge was examined. As such, the thesis will add to the framework of secondary brand knowledge of Keller (2003), whose research has sparked a great of deal research. Associations with regard to alliances, extensions and endorsers have all been studied. This thesis will extend the current research by

establishing a first result for the transfer of channel associations. This will both signify and extend the understanding of the secondary brand knowledge framework, of which each source will have been empirically tested.

(9)

The managerial relevance of this thesis lies in assisting luxury brand managers in their choice of distribution channel. Firstly, this is important for existing luxury brands, which may already have doubts on whether their collaboration with the local supermarket may in fact do more harm than good towards their brand. Secondly, this study will aid new luxury brands, which are still deciding on what type of distribution channel to choose, and the possible effects of that choice. Both types of managers are currently not able to answer these questions with the current literature. Findings from this thesis will aid luxury

fashion in ascertaining if there are any underlying risks in distributing their brands through certain channels and whether these risks are worthwhile.

1.4 OUTLINE

The thesis will start by discussing the context in which the possible effects of channel associations will researched: luxury brands. Luxury brand characteristics will be explicated, the trade-offs these brands face will be described and the role of the retail channel in this industry will be addressed. Subsequently, the role of the distribution channel in the secondary knowledge framework will be elaborated upon. Following this chapter, the existing literature on secondary knowledge and brand image transfer will be summarized. An explication of the effects of brand associations found in the literature will be given as well as which moderating variables are found to have an impact. Channel fit and existing brand knowledge are the two moderating variables that this study will look into, and will thus be described. After the conceptual model of this study is developed, the thesis will continue with the methods of testing the relationships between them. Results will be presented and discussed. In the conclusion, the main research question will be answered and directions for future research will be presented.

(10)

2. LUXURY BRANDS

2.1 DEFINING LUXURY

Luxury brands may be one of the purest examples of branding according to Keller (2009), as the author asserts that the brand itself and its image are often the key competitive advantages. While the research field does not offer a universally accepted definition, it seems widely accepted that the essence of luxury is the customers’ desire to mark their difference (Kapferer, 2012). As such, it is more than merely a premium brand, with a difference in customers’ perceptions. Throughout the literature, luxury is often referred to as being the trading up from ‘premium’ products to ‘super premium’ (Kapferer, 2012). This implies that luxury would be the ultimate version of a product range, described by criteria such as rarity, quality and high price. The problem with this approach is that it does not correspond to the reality according to Kapferer (2012), who explicates the

fundamental differences between ‘luxury’ and ‘premium’ in the everyday management of a brand. The author adds that it is not accomplishable to simply ‘trade up’ from premium to luxury, and that raising the prices of a premium brand is insufficient to turn it into a luxury brand. Yeoman and McMahon-Beattie (2006) agree that luxury has a psychological

association with premium pricing. However, premium value is not solely constituted by price; intangible concepts such as style, occasion and experience play a role as well. The authors assert that services such as holidays and home electronics have a high perception of value and goods such as electricity have no added value. Consequently, consumers are willing to pay more for certain goods and not for others. This has the implication for marketers that they should create value for products which the consumer is willing to pay extra. Yeoman and McMahon-Beattie (2006) add that marketers should extend the price range and positioning of the brand to create a distinct meaning for each product oﬀering at every level in the value chain. Or, as the authors state it, “luxury means driving aspiration and accessibility”.

Kapferer (2012) seems to disagree completely. He states that positioning is the difference that creates a certain preference for a brand over its competitors. The author asserts that whereas brands classically define themselves depending on the market

context, the main competitor and the expectations of target consumers, true luxury brands follow an entirely different approach. In the case of luxury; comparisons with competitors are disregarded in lieu of being unique. Kapferer (2012) presents the example of BMW as a

(11)

brand that focuses on uniqueness rather than positioning itself as more relevant. Its target market accounts of 20% of the population’s premium segment. The brand has not

attempted to attract the remaining 80%, but achieves brand growth by penetrating new countries rather than new customer segments. Whether this focus on exclusivity is

exemplary for the whole luxury market is another question, which will be dealt with in the next section. For now, it is worth noting that the vast majority of the literature field agrees that luxury brands are in need of some form of uniqueness. This is in conjunction with Atwal and Williams (2009), who assert that while there is no universally accepted

definition, luxury is associated with exclusivity, status and quality in the literature. These perceptions have led them to having high brand awareness, a clear and well-known brand identity and consequently customer loyalty. Traditionally, consumers are motivated in their purchase intention by a desire to impress others, in a form of consumption primarily concerned with the display of wealth (Atwal & Williams, 2009). However, the authors also discern a ‘postmodern’ form of luxury, where consumers acquire luxury goods for what they symbolize; the imagery, rather than what the images represent or mean, is consumed. The lack of a clear definition may become problematic when researching luxury brand perceptions, which is one of the outcome variables of this thesis. When including such a brand, it should be clear that consumers regard it as luxurious. Vigneron and Johnson (2004) distinguish five key luxury dimensions: perceived conspicuousness, uniqueness, quality, ‘extended self’ and hedonism. This distinction will prove to be useful to the methodological section of this thesis. For now, it’s important to note that the authors assert that successful luxury brands have managed to combine the mentioned dimensions with both an image of product scarcity and widespread brand awareness. However, Keller (2009) states that in doing this luxury brands face a growth trade-off: how do they attract new customers without alienating existing customers in order to grow? This trade-off is addressed in the section below.

(12)

2.2 TRADEOFFS IN LUXURY BRANDING

A challenge of brand management for brands in general is how to address the many

tradeoffs that come about in making marketing decisions. Keller (2009, p. 293) asserts that marketers of luxury brands particularly face three notable tradeoffs:

(1) Exclusivity vs. accessibility. As described by Vigneron and Johnson (2004), luxury brands have to possess qualities such as uniqueness and hedonism. The issue is that at the same time, these brands have to be seen as relevant to an expanded customer base to maintain sufficient sales growth.

(2) Classic vs. contemporary images. Keller (2009) describes how luxury brands traditionally have an image based on history and heritage, and that this may not be relevant to prospective younger customers. This is confirmed by an empirical study by Truong, McColl and Kitchen (2009), where new luxury fashion brands were perceived to have a lower level of prestige in comparison with traditional brands.

(3) Acquisition vs. retention. Luxury brands should determine the optimal

allocation of efforts towards proﬁtable existing customers in the short run as compared to prospective customers in the long run.

This thesis will focus on the first mentioned tradeoff for a number of reasons. Firstly, Keller (2009) asserts that the first tradeoff, between exclusivity and accessibility, is a notable trend which needs to be studied further in future research. Unlike the latter two, this tradeoff has seen quite some debate in the research field. Secondly, the tradeoff between acquisition and retention should be measured using actual purchase behavior. Conversely, this thesis will focus on purchase intention, consistent with research on secondary brand knowledge (Simonin & Ruth, 1998; Park et al., 1996; Rao et al., 1999). As such, this thesis will concentrate on the choice between exclusivity and accessibility. To start, Kapferer (2012) seems to disagree with the existence of the tradeoff as he states that when it comes to luxury, trying to make a brand more accessible or relevant leads to value dilution. This would be the case because the wider availability diminishes the dream potential among the elite, who are among the opinion leaders.

(13)

Truong et al. (2009) differ from opinion and assert that the focus on perceived prestige and price premiums to preserve exclusivity is mainly the case with traditional luxury brand owners. The authors state that new luxury brand positioning strategies often

involve a combination of reasonable price premiums and high perceived prestige to attract middle-class consumers. This perceived prestige differentiates them from middle-range products while the prices are below traditional luxury brands, to reach a broader consumer market. This strategy is described as a masstige strategy. Truong et al. (2009) have provided empirical evidence of masstige positioning of two of the most popular ‘new’ luxury fashion brands, namely Calvin Klein and Ralph Lauren. The ﬁndings conﬁrmed that these brands were perceived by consumers to be much closer to prestige level of

traditional brands than to that of middle-range brands, while the prices were much closer to those of the middle-range brands. The authors express a lack of empirical studies on the masstige phenomenon and suggest for future research to focus on the effects of masstige strategies on consumer behavior. Intuitively, certain brands would not be as suitable for masstige strategies as others because their customers are might be highly sensitive to the exclusive character of their brands. For example, Randy Kabat, Executive Vice President of Marketing and Advertising for Prada USA, revealed that just 5% of its customers are responsible for roughly 50% of the firm’s sales. Increasing accessibility could lead to agitating the enormously influential 5% of its customers, which could have a huge impact on earnings.

In fact, the fashion market is a prime example of the masstige concept in action. Andal-Ancion et al. (2010) assert that masstige entails a combination of prestige and aspiration. Over the last years, luxury fashion brands have catered to the aspiration factor by

collaborating with mass retail partners, engaging another consumer base (Andal-Ancion et al., 2010, p. 2). The most notable collaborations have been with H&M, the leading fast fashion retailer with over 2000 stores in 43 countries. Not only was the company one of the early adopters of this masstige trend, but they also took it internationally. A string of high-profile collaborations, including the likes from Stella McCartney to Viktor & Rolf, Roberto Cavalli, and Jimmy Choo have fueled H&M’s growth in recessionary times (Andal-Ancion et al., 2010). Before attempting to determine the effects on the other party, namely the luxury brands, the role of the retail channel in luxury (fashion) should be addressed.

(14)

2.3 THE ROLE OF THE RETAIL CHANNEL IN LUXURY

As described above, the literature field describes an interest in balancing exclusivity and accessibility. For many luxury goods, this trade-off is expressed in the choice of

distribution channel. Because of the traditional highly targeted market segments involved and their need for exclusivity, retail distribution is normally highly selective and

controlled (Keller, 2009). This is the case to ensure the distribution is closely aligned. Consequently, many luxury brands have their own retail outlets for maximum control. Brun and Castelli (2008) have focused on supply chain strategy in the luxury fashion industry, in an aim to develop a model based on product, brand and retail channel. When it comes to the retail channel, many different retail formats are currently used with different experiential contexts. This ranges from brand direct-operated stores, to mono-brand franchising stores, to department stores, to traditional specialist stores (Brun & Castelli, 2008, p. 171). All these different formats tend to target different consumer segments and as such require differences in points of sale image and operations. Subsequently, the success of a retail channel depends on the company’s ability to align store image with the brands and their speciﬁc target customer’s requirements.

Kapferer (2012) asserts that “luxury is in the distribution” and the distribution must manage rarity. The author states this rarity should be perceptible at all levels by having few sales points, precise locations, quality sales personnel and the shop as a showcase. This is particularly focused on luxury brands that own direct-operated stores. By stating this, the author seems to assume a significant impact of retail channel

associations on luxury brands. Keller (2009, p. 295) briefly touches on this subject, and asserts that brand associations in four categories may serve as important sources of equity for luxury brands: user profiles, personality & values, history & heritage, purchase & usage situations. The latter would apply to the retail channel; associations of a purchase situation may be based on a number of different considerations. Examples are the type of channel (department stores vs. specialty stores), ease of purchase and associated rewards (Keller, 2009). In order to fully understand the role of the channel in luxury, its role in Keller (2003)’s secondary brand knowledge framework.

(15)

3. THE ROLE OF THE DISTRIBUTION CHANNEL IN SECONDARY

KNOWLEDGE

3.1 SOURCES OF SECONDARY KNOWLEDGE Marketers link and associate their brands to other entities to create the most

advantageous brand-knowledge structures. Keller (2003, p. 595) assigns these entities to four categories: (1) people, (2) things, (3) places and (4) other brands. In this subsection the sources and their effects are briefly explicated, ending with the distribution channel. However, before understanding channel effects, which is one of the most underexposed categories in the literature, a check for common themes in the other categories may be convenient.

3.1.1 PEOPLE

For the general consumer, one of the most visible forms of secondary knowledge transfer is the use of celebrity endorsers. Celebrity endorsement is considered an effective

promotional tool by marketers, as one-in-four advertisements utilize some form of it (Spry et al., 2011). According to Spry et al. (2011), the literature on the subject points towards celebrity endorsement “influencing advertising effectiveness, brand recognition, brand recall, purchase intentions and even purchase behavior” (p. 883). An extensive and widely quoted literature review on celebrity endorsement is by Erdogan (1999), who is less affirmative on the positive effects and describes a number of potential advantages and hazards to the strategy. Advantages include increased attention and possibilities for image polishing, brand introduction and brand repositioning. Potential hazards may be

celebrities overshadowing the brand and public controversy of the endorser resulting in unwanted image change. This is the case because endorsers bring their own symbolic meanings to the endorsement process. This process is not that much different as the associative network memory model which will be described in Chapter 4 of this thesis; the associations one has with a certain celebrity may transfer to the brand, increasing its equity.

(16)

3.1.2 THINGS

Linking a brand to a thing seems a bit ambiguous, as the other subcategories are obviously ‘things’ as well. What Keller (2003, p. 595) implies is linking a brand to either events, causes or third party endorsements. The bulk of the research devoted to this category refers to linking and associating a certain brand with a cause; cause-related marketing or CRM. A CRM is a form of corporate social responsibility which is defined by Nan and Heo (2007) as “a company’s promise to donate a certain amount of money to a nonproﬁt organization or a social cause when customers purchase its products”. The results of studies in this field indicate that both attitudes towards companies involved in CRM and purchase intentions are positively influenced (Webb & Mohr, 1998). Another finding is a positive effect of the fit between brand and cause on consumer attitudes. Interestingly, Nan and Heo (2007) this significantly positive effect only existed for consumers who were high in brand consciousness; the degree to which a consumer tends toward buying well-known branded products. In case of low brand consciousness, fit had no impact on brand evaluations. It is not unimaginable that this result may play a role in this thesis as well.

3.1.3 PLACES

Associating brands with places can be done in two ways according to Keller (2003): consumers may either have associations with the country of origin of the brand or the distribution channel. In the research field, a significant impact of country image on brand image perception is well supported (Koubaa, 2008; Hsieh et al., 2004). Furthermore, a significant direct effect of COO information on brand image (taken as an overall concept) was found by Koubaa (2008). Both brand and country reputations were found to be moderating this relationship. Informally put, consumers prefer to buy cars from Germany and Japan, and leather shoes from Italy. Obviously, similar to the categories above, the fit between a country image and the brand or product plays a role in this case. Roth and Rome (1992) have suggested a framework of perceptual distance which they referred to as “match”, similar to the concept of fit discussed in this thesis. The authors assert that in case of a favorable match, such as Japanese car, the brand should deliberately be linked to the country of origin. However, in case of unfavorable matches, such as a Hungarian car, the brand should try to emphasize benefits other than country of origin. One of the other categories explicated above would be more fitting.

(17)

3.1.4 OTHER BRANDS

A great deal of research has been done on the linkage with other brands. The common denominator in the literature is the idea that brands are affected by the ones it’s

surrounded with. Or, as Simonin and Ruth (1998) have put it, “a company is known by the company it keeps”. The research on the subject can be split up into four subcategories (Keller, 2003): alliances, ingredient branding, corporate branding and brand extensions. The first three subcategories are usually all regarded as different types of brand alliances (Simonin & Ruth, 1998). The literature field regarding these separate subjects is far too vast to describe the research done on each of these subcategories: more relevant are the common themes in the field. Most of the research focuses on brands introducing a new product (Simonin & Ruth, 1998). As the vast majority of new products continue to fail, companies are looking for strategies to cope with this issue. Leveraging existing

knowledge may be such a strategy, and two branding techniques are typically employed; brand alliances and brand extensions.

When it comes to brand alliances, empirical results seem to point towards positive effects on brand image and consumer attitudes. This is confirmed by Park, Jun and Shocker (1996) who found evidence on improved image of both brands in alliances, next to a greater

perceived product quality. This latter finding is important to this thesis, as perceived quality will be an important variable in the empirical framework. Park et al. (1996) suggest that two brand names combined may provide greater assurance about product quality than just one alone as this signals that another company is willing to place its reputation on the line. A further finding of Simonin and Ruth (1998) is that brand alliances seem to affect less familiar brands to a greater extent than more familiar brands. Simonin and Ruth (1998) developed a model for brand attitudes in co-branding settings, a special case of brand alliances. The authors discern two types of ‘fit’: product-fit and brand-fit. Product-fit implies that the product categories of both brands are compatible with each other, whereas brand-fit implies similarities in brand images according to the consumer. In both types of fit the authors found that in case of an overall perception of fit, this results in an elevated attitude towards the brand alliance. Park et al. (1996) have, in a way,

extended the concept of fit to asymmetrical relationships. The authors experimented with combinations of two existing brand names in different positions as header and modifier in the brand name of a new product. Fit was found to be more important to the header brand than for the modifier.

(18)

3.2 THE CHANNEL AS SOURCE OF SECONDARY KNOWLEDGE While Keller (2003) has assigned the channel to ‘places’ in his framework, it’s not too challenging to argue that a (retail) channel is a brand as well. This would place it under the ‘other brands’ section above, entailing that the brand alliance literature can be consulted to explain channel effects. However, it is important to first establish the context and environment of which channels operate in nowadays. One of the most significant trends in the shopping environment has been the rapid increase of channels through which

customers are able to interact with firms (Neslin et al., 2006). This has created a challenge for firms to manage this environment effectively, which resulted in the field of

“multichannel customer management”. Before defining this research field, the concept of a channel should be explicated. Keller (2010) distinguishes two forms of channels: direct and indirect channels. In this context, direct or interactive channels entail selling through personal contacts from the company to customers by phone, Internet or in-person visits. On the other hand, indirect channels involve selling through third-party intermediaries such as agents, wholesalers and retailers. Neslin et al. (2006) refer to the channel in general as a customer contact point; a medium through which the consumer and the product or brand of interest interact. As such, multichannel customer management may be defined as the design and coordination of channels to enhance customer value. A variety of factors is bound to play role for a company choosing their channels of interest; it’s argued that a channel’s associative network should be included.

Certain types of product categories have ‘signature’ associations with specific channels, according to Ailawadi and Keller (2004). Examples would be mass merchandisers with household items and supermarkets with food. The authors assert that a brand that consumers regard as prototypical of a product category may have difficulties extending to other channels. Clearly, the notion of associations plays a role when consumers shop for a certain product at their channel of choice. When a consumer is considering a product, the likelihood of a particular channel appearing in one’s memory should be a function of the sum of its associations with the product category and the specific features of each channel (Inman et al., 2004). For example, if a consumer has time constraints, quick in and out or convenience may be the activated nodes in his mind; a channel offering this will come to mind. According to Inman et al. (2004 ), the associations between the channel and entire product categories are important, rather than just the associations with the product/brand alone. In fact, whereas normally the product category is the activated node in a consumer’s mind and brands follow, the reverse seems to be the case here; channel choice follows

(19)

from the activation. To explain this further, the next chapter will explain the associative network model by Keller (1993).

Given this remarkable difference with other sources of secondary knowledge, the notion of channel associations should offer substantial conceptual appeal. However, it has received little attention from researchers, according to Inman et al. (2004). A literature search reveals that the research field indeed is lacking of extensive empirical studies on the subject. Even Inman et al. (2004) themselves do not focus purely on channel associations, but mainly on channel-category associations. These can be viewed as consumer

perceptions of both channel and category. The most relevant finding of the authors is that channel-category associations were found to explain 72% of variation in channel share of volume. This is a very strong effect and implies that for channels with a strong product association, manufacturers and retailers can leverage that association for competitive advantage. Inman et al. (2004) did not study how this leveraging process would work and did not mention the possible transfer of brand image or knowledge through the

distribution channel, which leaves a gap open for future research. Inman et al. (2004) propose that certain brands in a category may fare better in some channels than in others, and that this perhaps may occur as a function of the match between the target consumer and the channel's shopper base. The authors present the example of warehouse Target, which may be associated with more-upscale brands than Wal-Mart. Following an extensive literature analysis, this hypothesis remains unexplored. This thesis might be able to

confirm the authors’ proposition, as this research in a way attempts to discover the same thing; whether brands ‘belong’ to certain channels.

Keller (2010) asserts that the literature on retail channel image transfer offers mixed results. As such, the author proposes the need for a comprehensive set of guidelines outlining how and when retailer images impact the images of the product brands they sell. Lee and Shavitt (2006) point out that a reason for the lack of consistent results on retailer image transfer may have been the utilitarian nature of the products studied. Opposing to utilitarian products are hedonic products: not coincidentally the subject of this thesis. To fully understand this concept, an explication of retail channel branding in general is useful.

(20)

3.3 THE RETAIL CHANNEL AS A BRAND

The growth of warehouse clubs and discounters has increased retail competition and put huge pressure on traditional retailers, according to Ailawadi and Keller (2004). The pressure originates primarily from retailers having to build their own brand equity, to distinguish them in the increasingly competing field. Even though many of the branding principles described further in this thesis apply, Ailawadi and Keller (2004) assert that retailer brands are substantially different from product brands and that the application of those branding principles may vary. The authors assert that brand equity and image of retailers usually depends on the manufacturer brands they carry and the equity of those brands; this symbiotic relationship implies that retailers brands are in a way always involved in a variety of alliances. Retailers use the manufacturer brands to generate consumer interest and subsequently loyalty in a store. Another striking difference with product brands, is that in this context manufacturer brands operate almost as “ingredient brands”: they help to establish a positioning and an image for the store. In both cases, the retail channel is regarded to be a brand on its own.

Building brand equity is an essential strategic issue for retailers, as it generates various benefits from the ability to leverage a retailer’s name by launching private label brands to increasing revenue by standing out. Burt and Davies (2010) have summarized the themes in existing retailer branding research. In their study, appropriately titled from

the retail brand to the retailer as brand, the authors have noted the evolution of thought in

the field. This shift in paradigm is thought to have followed from the success of so-called private label brands (also known as own brands or house brands); own lines of product which compete with traditional manufacturer products. Several motives for the

widespread introduction of these private brands are higher margins, lower financial risk, differentiation and improved retailer image (Burt & Davies, 2010). Subsequently,

consumers have increasingly treated private brand ranges as an alternative brand to the manufacturer brand on offer, rather than as an alternative product. This has over time led to the retail brand name enabling identification and recognition, and a level of trust which encourages repeat purchase. In this manner, the transformation from retail brand to the retailer as brand is complete. Ailawadi and Keller (2004) consequently make the case for integration of mainstream branding concepts into retail brand research.

(21)

However, this developing interest in retail branding also presents a number of issues around conceptualization and terminology. For example, store image is generally taken as a proxy for retailer brand image. Problematic is that store image is usually composed of elements such as store atmosphere, location and sales incentive programs; components typically not included in the brand image concept (Martenson, 2007). Kapferer (2012) states that this is due to retail advertising being ‘mechanical’ in the past; a focus on functional aspects such as range and availability to persuade consumers to buy from one store over another. The author asserts that this focus has shifted to engagement with customers with a focus on the entire store as the retailer’s product. Martenson (2007) postulates that this brings us in the area of corporate branding, comparing a retail brand to a corporate brand which should have a coherent look and feel. This reflects the values of the corporate brand and is assumed to have a positive effect on the carried store brands. However, a difference with corporate brands is the interplay with manufacturer brands in retail, which help establish a positioning and an image for the store.

The fact that manufacturer brands contribute in constituting a positioning for the retailer may also be a pitfall. Inman et al. (2004) have demonstrated that certain types of product categories have signature associations with speciﬁc channels. As such, a brand

prototypical of a product category can be difﬁcult to extend outside it. The example the authors present are cigarettes and alcohol being associated with drug stores and cleaning supply items with mass merchandisers. As such, the concept of fit has its role in the retail market as well. A remarkable difference however is that if a retailer attempts to sell a new line of products that doesn’t connect with consumers, there may be not much long-term harm done if the fit is low (Ailawadi & Keller, 2004). The effects on such a failed

collaboration on the manufacturer’s brand are not mentioned by the authors. Before investigating collaboration effects and the role of fit further in this thesis, it’s important to explain the context of secondary knowledge in more detail. The following chapter will discuss its basic components to present a clear image of this framework, before presenting the research methodology of this thesis.

(22)

4. LEVERAGING SECONDARY KNOWLEDGE

4.1 BRAND EQUITY

The most important assets of a firm are intangible; they are not capitalized and as such do not appear on the balance sheet (Aaker, 1991). One such asset is the equity the firm’s brand represents. Over the last two decades brand equity has become an important key to understanding the mechanisms, objectives and especially the net impact of marketing efforts (Reynolds & Phillips, 2005). The concept has been examined from both financial and customer based perspectives. The former perspective of brand equity is not discussed extensively in this thesis, as the focus will be on consumer responses to brand marketing. An extensive conceptual model of brand equity from the perspective of the individual consumer was presented by Keller (1993). His proposed concept, Customer-Based Brand Equity, is defined as “the differential effect of brand knowledge on consumer response to the marketing of the brand” (p. 2). A brand has positive customer-based brand equity when consumers react more favorably to a marketing mix element for the brand than they would if the element is assigned to an unnamed version of the product (Keller, 1993, p.2). This property of consumer responding is why for many businesses the brand name represents the basis of competitive advantage and future earnings streams (Aaker, 1991). This portrays the importance of managing brand equity in a coordinated and coherent manner. The process can be thought of as a series of steps, which consist of establishing the proper brand identity, creating appropriate brand meaning, eliciting the right brand responses, and forging brand relationships with consumers (Keller, 2001). In turn, achieving these four steps entails establishing six brand-building blocks: brand salience, brand performance, brand imagery, brand judgments, brand feelings, and brand resonance. The author has accordingly conceptualized this process as a pyramid; the customer-based brand equity pyramid. The most valuable block, brand resonance, occurs only when all the other blocks have been established. This pyramid is displayed in Figure 1 below.

(23)

FIGURE 1

In the very first level of the pyramid, identification of the brand with customers should be ensured. Keller (2001) asserts that this implies an association of the brand in customers' minds with a specific need or product class. The concept of brand association returns in the second level of the pyramid as well; when it comes to giving meaning to a brand, a variety of tangible and intangible associations should be strategically linked to the brand. If a certain customer doesn’t have any association with the brand, he will not be able to develop feelings and subsequently become attached to the brand. Clearly, brand

associations are of great importance in managing brand equity. 4.2 BRAND ASSOCIATIONS

A brand association is anything linked in consumer memory to a brand (Aaker, 1991). Keller (1993) asserts that most conceptualizations of memory structure involve

associative models. The ‘associative network memory model’ proposed by Keller (1993, p. 2) considers knowledge as a set of nodes and links. Nodes are stored information that is connected by links varying in strength. Nodes may activate each other when a person retrieves information from memory. When a certain threshold level is exceeded, the information in that node is recalled. The strength of the association between the activated node and all linked nodes determine the extent of activation. A practical example would be when a consumer considers purchasing a smartphone; he may instantly think of Apple because of the strong association with the product category. Other consumer knowledge

(24)

most linked to Apple should also appear in the consumer’s thoughts, such as perceptions of the iPhone or past product experiences.

Given the conceptualization above, the key question is what properties do these

associations have? And perhaps more importantly, as companies ought to manage them strategically; which properties should associations have? Clearly, strength matters, as it helps determine the activation of the memory node. In fact, Keller (1993) distinguishes three key dimensions, where successful results on these dimensions produce the most positive brand responses: strength, favorability and uniqueness of brand associations. In this context, favorability pertains to the whether the association is seen as a positive or negative feature for a brand (Till et al., 2011). As such, marketers should strive to create more favorable associations. Keller (1993) asserts that perceptions of the favorability of an attribute are related to attribute importance. This means that consumers are unlikely to consider an attribute to be very good if they do not find it to be very important; it’s hard to realize a favorable association for an unimportant attribute. However, it should be noted that all three dimensions separately are necessary but not sufficient conditions. The final dimension, uniqueness, refers to “the degree to which the association is perceived as a distinct and different brand feature within the product category” (Till et al., 2011).This implies that some associations may be typical for the category and are shared with many competing brands while others are unique to just brand. Keller (1993) asserts that the essence of brand positioning is that the brand has a sustainable competitive advantage or a "unique selling proposition". This persuades consumers to buy that particular brand. When all three dimensions are combined, strongly held, favorably evaluated associations that are unique to the brand express superiority over other brands, which is critical to a brand's success according to Keller (1993).

Understanding the dynamics behind these associations is important, as strong brands can be built by creating and subsequently linking them to the brand. This implies that a company is influencing consumers’ brand knowledge. Returning to the associative network memory model described above, brand knowledge can be conceptualized as a brand node in memory to which a variety of associations are linked (Keller, 1993). Brand knowledge can be slit up into two components: brand awareness and brand image. Brand awareness relates to brand recall and recognition performance by consumers: can

consumers identify the brand under different conditions? Brand image, on the other side, refers to the set of associations that consumers have linked to the brand. Why are these concepts important to marketers? Marketers traditionally have a variety of options to

(25)

influence brand knowledge, by using brand elements (logos, character, slogans) and marketing programs for instance. However, Keller (2003) asserts that any potential encounter with a brand has the opportunity to change its mental representation and the kinds of information that appear in consumer memory. Accordingly, marketers often have to link or associate their brands with other sources to build or leverage knowledge, which are called secondary sources of brand knowledge. This process, which is called brand

leveraging, may create new knowledge as well as altering existing knowledge.

4.3 IMAGE TRANSFER

Marketers try to design their offerings in a way that creates the most advantageous brand-knowledge structures. Keller (2003) asserts that increasingly competitive marketplaces have led marketers to their brands with other people, places, things, or brands; using external knowledge. The author defines this secondary brand knowledge as the effects the abovementioned linkages have on consumers. Typically, these effects are intended to be increased brand awareness or a more positive brand image. Common secondary sources of brand knowledge are other brands (alliances or extensions), people (celebrity endorsers), things (events or causes) and places (country of origin or distribution channel). These sources are depicted in Figure 2 below. Keller (2003) asserts that there are two basic questions when it comes to leveraging these sources:

- What do consumers know about the source?

- Does any of this knowledge affect what they think about a brand when it becomes linked to or associated with this source?

So, firstly it comes down to awareness of the source. This is consistent with the associative network memory model described earlier, where an association has to have a certain strength in order to activate a memory node. The other two dimensions of brand

associations, favorability and uniqueness, play an important role as well. For example: if a marketer links his brand to an outside event with which consumers have strong,

unfavorable and unique associations, this will surely affect the brand negatively. How bad the damage would be depends on the transferability of the knowledge of the linked entity.

(26)

Keller (2003) states that understanding the concept of transferability is critical in the leveraging model. The author asserts that regardless of which theoretical approach is pursued, a variety of different moderating factors should be explored, such as the perceived similarity or ‘fit’ between the brand and other entity or the uniqueness of the linkage. In fact, many moderating factors have been identified and research in the literature field, in many different contexts. Most of the sources depicted in Figure 2 have been a context for these studies. Chapter 3 of this thesis will further explicate some important results in these studies, with later on a focus on a specific source of secondary knowledge: the channel.

(27)

5. HYPOTHESES

This thesis attempts to determine the extent of the effect of the distribution channel as a source of secondary knowledge: does it influence luxury brand perceptions? Is the willingness to purchase a luxury product influenced by channel associations? More specifically, in the context of this thesis: What is the effect of a distribution channel

collaboration on luxury brand image, perceptions and purchase intentions? A number of

variables are relevant to the main research question and will be discussed below. Buried in the questions lies the notion of brand image transfer: clearly, the channel image held in consumers’ minds should jump over to the luxury brand’s image if a significant influence is to be induced. Keller (1993, p. 3) defines brand image as “perceptions about a brand reflected by the brand associations held in memory”. As discussed earlier, this takes an associate memory network view such that the brand image is based upon linkages held in consumer memory. Keller (1993) asserts that a brand association itself is linked to other information in memory which is not directly related to the product. When a brand becomes identified with this other entity, consumers may believe that the brand shares associations with this entity: a transfer of associations follows.

While he does not support this empirically, Keller (1993) hypothesizes that one of the sources of image transfer may lie in the distribution channel. The other sources suggested by the author have been confirmed in the literature. Gwinner and Eaton (1999) find a transfer of image from events to brands in event sponsorship; Park et al. (1996) report on image transfer between brands in alliances. In the fashion market, both for designers (the brand of interest) and the retailers (the distribution channel) a strong brand image is of paramount importance because of the psychological value of the products (Fionda & Moore, 2009). Combining this notion and the work on other sources of secondary knowledge, this thesis asserts that there will be a significant amount of image transfer from channel to luxury brand. This leads to the first hypothesis, which while its sub-hypotheses utilize different methods of measuring is collectively focused on image transfer.

(28)

H1: In a fast-fashion collaboration a luxury brand’s image will become more similar

to its distribution channel image, as reflected by

(a) a smaller difference in association scores (b) a lower score on typical luxury associations

(c) a higher score on typical distribution channel associations

H1d: A luxury brand will develop new associations in consumer’s minds when it

collaborates with a fast-fashion retail channel

The next chapter will shed light on how these hypotheses will be tested, for both the explicit and implicit analyses. The transfer of channel image is expected to be displayed by a change of perceptions held towards the brand, especially in the case of a strongly

branded distribution channel; in this situation, hypotheses found in the brand alliance literature may be supported in this thesis as well. It is commonly supported that both quality and value perceptions are influenced by the cooperating brand in a brand alliance (Simonin & Ruth, 1998; Park et al., 1996; Rao et al., 1999). Park et al. (1996) found

evidence on a greater perceived product quality of both brands in alliances. The authors assert that two brand names combined may provide greater assurance about product quality than just one alone. This is the case because the presence of the second brand name may signal to buyers that another company is willing to place its reputation on the line. Rao et al. (1996) disagree about the predominantly positive influence on perceived quality. The authors assert that overall perceptions of quality for a product featuring a brand alliance vary depending on the credibility of the signal by the brand ally and whether the product’s quality is easily observable.

Rodrigue and Biswas (2004) have furthermore found a significant positive impact of attitude towards the brand alliance on the willingness to pay a premium price and

purchase intention. The role of perceived quality in other sources of secondary knowledge has been documented as well. When it comes to places as sources, associating can be done in two ways according to Keller (2003); consumers may either have associations with the country of origin of the brand or the distribution channel. In the research field, a

(29)

2008; Hsieh et al., 2004). Significant positive effects have been found on perceptions of quality and perceptions of value. Therefore, it is hypothesized that:

H2: In a collaborative effort with a fast-fashion distribution channel, ceteris paribus,

the linked luxury brand will have (a) lower perceptions of quality (b) less willingness to buy

The concept of ‘fit’ in image transfer is a recurring moderating variable throughout the literature field (Simonin & Ruth, 1998; Erdogan, 1999; Keller, 2003). Simonin and Ruth (1998) developed a model for brand attitudes in co-branding settings, a special case of brand alliances. The authors discern two types of ‘fit’: product-fit and brand-fit. Product-fit implies that the product categories of both brands are compatible with each other, whereas brand-fit implies similarities in brand images according to the consumer. In both types the authors found that in case of an overall perception of fit, this results in an elevated attitude towards the brand alliance.

While it has not yet been named in this section, one of the most visible forms of secondary knowledge transfer for the general consumer is the use of celebrity endorsers. because endorsers bring their own symbolic meanings to the endorsement process. Erdogan (1999) refers to this as a special example of the so-called process of meaning transfer. In this process, a path for the movement of cultural meaning in consumer societies exists. This process involves three stages; the formation of celebrity image, transfer of this meaning to the product and finally from product to consumers. This process is not that much different as the associative network memory model described in Chapter 2 of this thesis; the

associations one has with a certain celebrity may transfer to the brand, increasing its equity. Erdogan (1999) asserts that the degree of transfer between brand and celebrity depends on the degree of perceived fit between the image of both (Erdogan, 1999). Using the insights on other sources of secondary knowledge in this thesis’ context of channels leads to the following hypothesis:

(30)

H3a In a fast-fashion collaboration, a high image-based channel fit (vs. a low fit)

lessens the negative effect on luxury association scores.

In both ‘places’ and ‘things’ as sources of secondary knowledge, perceived fit has found to have a positive impact on perceptions and intentions. Nan and Heo (2007) found that an ad with a CRM component elicits significantly more positive consumer reactions, with a positive effect of the fit between brand and cause on consumer attitudes. When it comes to country-of-origin effects, the fit between a country image and the brand is found to have a positive impact on perceptions and intentions (Roth & Rome, 1992; Koubaa, 2008). As such, the following may be hypothesized:

H3 In a fast-fashion collaboration, a high image-based channel fit (vs. a low fit) (b) lessens the negative effect on luxury brand quality perceptions

(c) lessens the negative effect on luxury brand purchase intention

Next to the concept of fit, the concept of brand familiarity is a recurring moderating variable in the image transfer literature. Simonin and Ruth (1998) assert that brand familiarity moderates the strength of attitude transfer; brand alliances seem to affect less familiar brands to a greater extent than more familiar brands. Research shows that increased familiarity with brands results in differential effects in information processing and brand evaluation. This is the case because familiar brands have a variety of brand-related experiences in consumer’s mind. As such, it is hypothesized that both image transfer and transfer perceptions/intentions will be easier when there is a higher level of brand familiarity. This is conceptualized as follows:

H4 In a fast-fashion collaboration, high luxury brand familiarity (vs. low familiarity)

this leads to

(a) a stronger decrease in luxury association score

(b) a stronger decrease in luxury brand quality perceptions (c) a stronger decrease in luxury brand purchase intention

(31)

When it comes to the duration of the collaboration between luxury brand and channel, two perspectives arise. In the case of sporting events, the duration of the sponsorship

positively influences the strength of brand associations in memory. Seeing a sponsor's name associated with the same sporting event, year after year, creates stronger

associations and contributes to adding financial value to the brand (Cornwell et al., 2001). It could be asserted that in case described in this thesis, the opposite is at hand. When luxury brand cooperates with a retailer, it is used as a promotional alliance, and not a co-branding effort. This is because of the notion of uniqueness, one of the key luxury

dimensions according to Vigneron and Johnson (2004). Through a decrease in perceived uniqueness, or exclusivity, a structural collaboration would not be preferred. It’s chosen not to follow this line of thought. The reason is that it is hypothesized that people will see the collaborative product line as a separate product, and that (like with any other product line) a structural sale would be seen as more logical. As such, the following is

hypothesized:

H5: A structural collaboration is perceived as (a) more logical

(b) more preferred

(32)

6. METHODOLOGY

6.1 RESEARCH DESIGN

The purpose of this study is examining the effects of a distribution channel collaboration on luxury brand image, perceptions and purchase intention. The context which is chosen is the context of designer-retailer collaborations, a trend in the fashion industry. The most appropriate manner to test the hypotheses described above is using an experiment. Saunders (2008) describes how a classic experiment establishes a number of conditions which members are randomly assigned to. These conditions are to be similar in all aspects, except for the planned intervention or manipulation. Participants are randomly assigned to the conditions to assert reliability. In this particular research, the planned intervention is whether or not a channel collaboration takes a place. Through online self-administered questionnaires, data was collected. The selection of this research method is consistent with the literature on secondary brand associations.

The hypotheses were all tailored to the luxury market, and the testing will

specifically focus on designer/retailer collaborations in the luxury fashion market. To test the hypotheses an experiment will be conducted using one between groups factor

(designer collaboration vs. no collaboration) and one repeated measures factor (high level of designer/retailer fit vs. low level of designer/retailer fit), resulting in a 2x2 design. Three brands will be used in the study: one luxury fashion brand and two channel brands. For the ‘collaboration’ condition, a participant is confronted with pictures, a story on a collaboration (which randomly varies in fit), and a product price (which will be used for value perceptions). The participant is asked to rate both brands he sees on ten adjectives which describe image dimensions. The participant is then asked a series of questions which will determine his perceptions and purchase intentions. In the ‘no collaboration’ condition, no mention of any cooperation is included; the survey is described as “a way to understand the images consumers have regarding different fashion brands”.

This manner of measuring associations is referred to as a direct method by Aaker (1991). The author asserts that where direct measures scale a number of predetermined brand associations, indirect measures infer meaning from consumer responses. This study, because of its explorative character, will make use of both methods, with free association as an indirect approach. A large number of methods for this end are available from market research agencies, according to Timmerman (2001). In order to obtain a complete view of the richness of consumer memory, Timmerman (2001) combined general brand image

(33)

models with attribute-related research findings into an Inventory of Brand

Representations Attributes (IBRA). IBRA is a collection of attributes that most probably underlie the representation of brands, according the author. It’s composed of 10 main types of attributes: product characteristics, product usage, price & quality, brand identifiers, brand personification, market, origin, advertisement, attitudes & purchase behavior and personal reference. The 10 main groups cover a total of 57 specific attributes. This thesis will use the IBRA method to distinguish the different associations respondents have. After analyzing, minor adjustments were made to accommodate the specific

associations respondents had. These are visible in the results section below. 6.2 STIMULI DEVELOPMENT

6.2.1 QUALITATIVE INTERVIEWS

In order to support the research three interviews were held, of which two were

unstructured interviews. Unstructured interviews are advised when one wants to explore in depth a general idea in which one is interested; the interviewee can talk freely in relation to the topic area (Saunders, 2008). In this case, the topic area was the state of the luxury fashion market. The main objective of the interviews was learning the motives of luxury brands to get involved in collaborations; a subject on which no literature is

available for. The three participants were all involved in the fashion industry, both through education and employment. The most important question in the interviews was ‘Why do luxury brands get involved in retailer/designer collaborations?’. Three different and complementary answers are presented.

1) The collaboration introduces the designer brand to new consumers

For luxury fashion brands, it’s interesting to sell their brands in places it’s never been sold before, to people who might not have heard of it. Designer collaborations are a meaningful way to raise awareness in audience and geographical segments that they have either little presence or where the local economy is not yet ready for the more expensive and

luxurious mainline. As such, it’s a balance between creation and business. 2) The collaboration may help reduce the amount of (semi-)illegal copies.

A large reason for the luxury/retailer collaborations is the problem of illegal fakes. Simply put; designers might as well knock themselves off and make some money out of it,

(34)

America (CFDA) have been lobbying to receive copyright protection for fashion design since 2006. Several members of the CFDA have participated in fast-fashion collaborations, such as designer Philip Lim who paired up with mass retailer Target – a collection sold out in ten minutes for small and medium sizes. While obviously well-known retailers do not partake in illegal copying, the problem is the interpretational copies by retailers like H&M and Zara. While an interpretational copy is an original design, it is mainly inspired by and based on recent runway looks that follow the current trends. Zara needs just two weeks to develop a new product and get it to stores, compared to the six-month industry average. This explains a significant part of the designers’ excitement for cooperation.

3) An increase of media impressions, which is the industry measure for collaboration success

Typically, high-end designer collaboration deals are worth a six to seven-digit figure. However, for the brands involved, the success is rather measured in overall media

impressions, a measure used to determine how many times consumers saw or read a

mention of the collaboration in the news media. An example is The Missoni for Target collection, which was covered in over 40 magazines resulting in media impressions in the billions.

Table 1: notable designer-retailer collaborations in the past years

Designer Retailer Year

Karl Lagerfeld H&M 2004

Stella McCartney H&M 2005 Viktor & Rolf H&M 2006

Pierre Hardy Gap 2007-2011

Stella McCartney Target Australia 2007, 2010 Comme des Garcons H&M 2008

Jimmy Choo H&M 2009

Stella McCartney Gap Kids 2009-2011

Lanvin H&M 2010

Karl Lagerfeld Macy’s 2011

Versace H&M 2011

Maison Martin Margiela H&M 2012

Phillip Lim Target 2013

The distribution channel as source of secondary brand knowledge : The case of luxury fashion designer-retailer collaborations.