Question

These big names like Isaac Mizrahi, Lagerfeld, McCartney, and Cavalli run the risk of alienating existing customers who purchase their higher-priced products." Please discuss how a specific designer/brand has hurt their reputation with a collaboration with a mass-market retail store.

Answer 1

With the development of the internet in particular, customers now have more information about products and are becoming experts in diverse fields that they had previously never known of. Developing a loyal relationship with a customer demands a real effort from brands and increasingly innovative techniques have to be tested to compete in this new context. In this highly competitive environment, many brands are adopting branding techniques in order to differentiate their identities and emphasize the uniqueness of their product (Dussart, 2010). A brand is a representative combination of product characteristics and added-values (Macrae, Parkinson, & Sheerman, 1995). A well - developed brand image gives a brand an overall image of superiority and offers customers feelings of satisfaction through association with a brand with product benefits. Associating a single product with two or more brands, or co-branding, would therefore appear to be an interesting way of building differentiation and reputation. In the fashion industry, one well-known example of co-branding is the creative collaboration between fashion designers and mass-market retailers. Co-branding aims to enhance a brand’s image and content through target market expansion, as well as to reduce the costs of R&D, marketing and communication. However, the concept of co-branding is not always based on brand synergy; it could also be a way for the strong identity of one brand to be transferred by the consumer to another brand.

The idea that a co-signed product created by a brand and a designer brand will obtain consumer esteem if the product is offered to the mass market can hardly be justified, since uniqueness and rarity are key elements of a luxury brand (Hoffmann & Coste, 2012). That is why co-branding in fashion and luxury is often based on limited series of products, to create an initial buzz and to reinforce the rarity and the short-lived effect of the product.

Co-signed products, despite their more affordable price, create the same feelings in consumers as do unique products (such as a luxury product), and consumers will take as much care of a co-signed product as they will of an upscale or luxury product.

Collange (2008) shows that when a consumer is faced with a co-branded product with a different name, his or her evaluation and purchase intentions depend on several distinct variables: the greater the similarity between the substitution brand and the initial brand, the better; and the closer the fit between the substitution brand and the product, the better.

Moreover, the stronger the awareness and the image, the more favorable the consumer’s attitudes towards the two brands will be (Simonin & Ruth, 1998; Washburn, Till, & Priluck, 2000); thus, the more the brand awareness of the substitution brand is compared to the initial brand, the better. Lastly, a consumer attached emotionally to one brand will transfer the qualities and the emotions felt for this brand to the other. As a consequence,the stronger the consumer’s attachment is to the initial brand, the more the product evaluation and the purchase intention will be transferred to the product by association. Studies show that consumers are sensitive to a co-branding project. However, not all associations have a positive effect on consumers; the association between two brands has to be coherent, clear and logical, with a strong awareness and image, to attract the consumer’s interest. Results show that consumers are not unlikely to be interested in co-branding projects.

When two brands from the fashion industry collaborate, both brands exist independently and do not rely on ‘ingredients’ for developing a new product and, therefore, presenting an opportunity for exploring the drivers and types of relationships that could exist. This study adopts an interpretive method of investigation using in-depth interviews with brand managers. Findings provide empirical support for value creation through different relationship levels (such as brand/awareness co-branding, values endorsement and complementary competence co-branding) while highlighting some challenges and risks for co-branding in practice.

Perceptions of a collaborative product may have other effects on the parent brands, called ‘spill over effects’, although not to the same extent that line or brand extensions would as they are more intricately connected to the brand (Leuthesser, Kohli and Suri, 2003) (Votolato and Unnava, 2006). Thus, there is a risk that the associations toward the collaboration affect how consumers view the parent brands. Also, the associations of the parent brands can inadvertently have implications on their partner’s respective image. Moreover, there is a considerable risk that the associations of a previous partner of one of the brands could affect the new partner.

According to few respondents, luxury is not for everyone and luxury designer brands in collaboration with high street retailers dilute their brand images.Buying into a brand image is a way to obtain status and enhance the self, satisfying ego needs. With this in mind, a necessity for consumers buying luxury is thus that the product’s brand image is concurrent with their own self-image. An important factor of the collaborations thus becomes whether buying the luxury brands still satisfies the ego needs after the collaboration, or if the ego needs no longer are satisfied by that particular brand.

Concluding, we should look at what strategies leads to the desired outcome as it is important for companies to get a greater understanding of how they should communicate in order to manage how their brand is perceived by consumers.