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
Date: April 2014
 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.

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 TABLE OF CONTENTS

Abstract i
1. Introduction 1
1.1 Exclusivity vs. accessibility 1
1.2 Problem Statement 3
1.2.1 Sub-questions 3
1.2.2 Delimitations 4
1.3 Contribution 4
1.4 Outline 5
2. Luxury brands 6
2.1 Defining luxury 6
2.2 Tradeoffs in luxury branding 8
2.3 The role of the retail channel in luxury 10
3. The role of the distribution channel in secondary knowledge 11
3.1 Sources of secondary knowledge 11
3.1.1 People 11
3.1.2 Things 12
3.1.3 Places 12
3.1.4 Other brands 13
3.2 The channel as source of secondary knowledge 14
3.3 The retail channel as a brand 16
4. Leveraging secondary knowledge 18
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
7.2 Reliability analysis 35

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 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
Appendix D: H&M, V&D word clouds 77

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 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 for brand 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
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.

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 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?

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 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.

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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.

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 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

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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.

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 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.

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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.

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 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 mono-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.

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 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.

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 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.

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 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.

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 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
14
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.

15
 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.

16
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.

17
 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.

18
 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

19
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

20
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.

21
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.

Figure 2

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 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.

23
 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
significant impact of country image on brand image perception is well supported (Koubaa,

24
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:

25
 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

26
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

in a high fit luxury fast-fashion collaboration (vs. low fit).

27
 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

28
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,
otherwise others will do it. Institutions such as the Council of Fashion Designers of

29
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
Isabel Marant H&M November 14th, 2013

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 6.2.2 FOCUS GROUP

A focus group of two participants and one moderator (researcher) of 1.5 hour was held.
Saunders (2008) describes focus groups as group interviews with a clearly defined topic,
which aims to foster an interactive discussion between participants, which have more than
two participants. In this case, the aim of the focus group was to gain insights on possible
stimuli to test the hypotheses mentioned above. The group, while small, was able to
explicate the current state of the fashion market. A first insight is that people who are
more involved in fashion know that quality matters to these brands, and that at the low
prices of H&M they’re not buying ‘fashion’ in the traditional way; buying a part of a legacy.
Consequently, fashion involvement will be included as a control variable. While not
included in the analyses, the use will be checking for possible differences between
conditions. Fashion involved and quality seeking people take taste more seriously, and
may react differently to collaboration and view them more as assembly-line knockoffs.
Therefore, it’s important to have them fairly distributed among condition.

When it comes to the choice of channels, H&M is an obvious choice. The most notable
collaborations have been with H&M, one of the early adopters of the designer-retailer
trend, as displayed in Table 1 above. H&M takes the responsibility for the production and
the handling (which shops to place it in, where to place it, how to display it, etc.). However,
the design and choice of materials is not controlled or guided too much to ensure that the
luxury brand is able to deal with quality concerns. However, both worlds have to come
together. H&M attaches great importance to the fit between both brands, where the
packaging, marketing, PR, and distribution all have to fit both brands. This has confirmed
the choice of using fit as the variable with which the respondents are divided in groups.
Whereas H&M will as such be regarded to be high-fit, the low-fit groups will be confronted
with V&D. The focus group found V&D to be a less successful retailer which would not fit
with the prestige of a luxury brand. As luxury brand, Gucci was chosen. Gucci is one of the
top 10 luxury brands based on brand value, and has never been involved in a retailer
collaboration. This entails that there are no perceptions of previous collaborative efforts
which may influence the outcome variables.
The second part of the focus group efforts focused on creating a set of adjectives
that could be used to describe image dimensions of the selected brands, both luxury and
retailers. This approach follows the approach by Gwinner and Eaton (1999), who
researched brand image transfer in event sponsorships. Five luxury associations were

31
selected by the focus group out 20 luxury items developed by Vigneron and Johnson (2004)
proposed a scale which could be used both in creating and monitoring of luxury brands,
but also in basic research in consumer behavior. Five key luxury dimensions are
distinguished: perceived conspicuousness, uniqueness, quality, ‘extended self’ and
hedonism. These findings display the existence of ‘latent’ luxury constructs which are
shaped by personal and interpersonal perceptions towards the brands (Vigneron &
Johnson, p. 501). Successful luxury brands have managed to combine the mentioned
dimensions with both an image of product scarcity and widespread brand awareness. Of
each dimension, the focus group selected the most suitable to describe a luxury brand.
Subsequently, five associations fitting the retail channel were chosen.

6.3 OPERATIONALIZATION

6.3.1 INDEPENDENT VARIABLE

An independent or experimental variable causes changes in a dependent variable

(Saunders, 2008). In this experiment, channel collaboration is the independent variable.
With collaboration treatment (yes = 1, no = 0) as the between groups factor, both
multivariate effects and univariate ANOVAs will be used to determine between-subject
effects. In the two groups where there is a collaboration, participants are confronted with
the following story:

“Gucci will work together with H&M (V&D), designing a collection available only in
H&M stores worldwide and in limited quantity online in the H&M (V&D) webshop.
The collection will launch in February and will feature pieces for both men and
women, at an affordable price. Please take a look at the following poster ads, which
are part of the promotion of this collection:”

The posters were custom made using Photoshop and differ only in the brand name/logo of
the involved channel. These posters are displayed in Appendix A.

32
 6.3.2 DEPENDENT VARIABLES

Image transfer measure (H1). Image transfer will be measured accordingly with the
research by Gwinner and Eaton (1999), who have found an ingenious way of measuring it.
Recall that in the experiment each of the 10 adjectives will be rated as to how well they
describe the channel and the luxury brand a participant faces. If an image transfer occurs,
the image of the channel and the image of the brand are expected to be more similar in the
‘designer collaboration’ condition, as the channel image is transferring to the brand. This
measurement of image transfer is easily calculated by summing up the differences
between the corresponding adjectives in the channel and the brand ratings. A practical
example: if a subject rates the adjective “accessible” as a “6” for the channel and a “3 for
the brand”, the absolute difference for those corresponding adjectives is "3." The ten
absolute difference scores will be summed up for each channel-brand pair to create a
congruence index, which is then divided into the luxury congruence index and the channel
index based on the corresponding associations. Smaller numbers in the index display
greater congruence (less difference between channel and brand). Hypothesis 1 predicts
that this measure will be significantly smaller for the subjects in the ‘designer
collaboration’ condition than in the ‘no designer collaboration’ condition.

Perceived quality (H2a) and purchase intention (H2b). For the second hypothesis, the
impact on perceptions is to be calculated. Quality perceptions will be measured by a 7-
point Likert scale on two items in a measure developed by Dodds et al. (1991), which has
been widely used throughout the literature field. Similarly, purchase intention will be
calculated as a score on a 7-point Likert scale, on two items. Likewise, this measure is
based on willingness to buy indicators by Dodds et al. (1991).

33
 7. RESULTS

7.1 RESPONDENTS

A total of 286 respondents started the online questionnaire, of which 243 completed it.
Incomplete questionnaires were discarded and are not included in any form of data
analysis, resulting in a sample set with N=243. Further exclusions were deemed
unnecessary, as there were no restrictions set on age or income. Of greater importance
was a sample with enough fashion-minded individuals, to ensure a dataset with more and
richer sets of associations with the fashion brands used in the experiment. To this extent,
questionnaires were distributed among students of the Amsterdam Fashion Institute,
fashion blogs and relevant social media. This has resulted in a very fashion-minded
sample: 93.0% of respondents agreed in some form with the statement ‘fashion clothing is
important to me’.

Starting with the descriptive statistics, the fashion involvement of the respondents has
affected the gender distribution of the sample: 88.1% of the sample was female and 11.9%
was male. While the male participants are slightly lower involved with fashion, this
difference is not significant ( t(241) = -0.89, p = 0.38). The sample as a whole was
relatively young, with an average age of 22.89 (SD = 3.67). This is a consequence of the
distribution strategy of the questionnaire. The discussion section of this thesis will shed a
light on the possible impact this decision may have. For now, a consequence of the young
age of the sample is its average monthly income: 947.38 euros (SD = 859.79). The large
standard deviation of the reported income shows that there is a substantial part of the
sample with low to zero income. Again, this is due to the large amount of students in the
sample: 70.4% describes their occupation as being a student. 18.5% of the sample is full-
time employed, 9.9% part-time employed and 1.2% is unemployed. The possible
implications of this result are addressed in the discussion chapter.

The 243 respondents were randomly distributed among 4 conditions. Three of these
conditions contain 63 respondents, whereas one condition holds 54 respondents. This is a
condition where V&D and Gucci are presented to participants, without collaboration. The
lower number of respondents in this group is due to the discarding of incomplete
questionnaires and should not have a significant impact on the reliability of the study.

34
 7.2 RELIABILITY ANALYSIS

The hypothesis section below will be divided two sections: firstly and predominantly, the
extent of transfer of brand associations. Secondly, the impact of the collaboration on a
number of outcome variables is touched upon. For this latter case, a scale’s internal
consistency is one of the main issues regarding reliability (Pallant, 2010). Internal
consistency refers to the degree to which items within a scale measure the same
underlying construct, and is generally indicated by Cronbach’s alpha coefficient. A
Cronbach alpha coefficient of a scale of between 0.6 and 0.8 is seen as moderately reliable.
In the experimental part of the study, the dependent variables perceived quality and
purchase intention, both moderating variables and the control variable fashion
involvement necessitate this analysis.

In Table 2 below, the results of the reliability analyses are displayed. The purchase
intention scale was the first to be submitted to analysis. With an inter-item correlation of
0.88 the two items in the scale proved to measure the same construct, with a Cronbach’s
alpha of 0.93. Next, quality perceptions were measured for Gucci by a 7-point Likert scale
on two items, in a measure developed by Dodds et al. (1991), which has been widely used
throughout the literature field. A third item measuring quality expectations (“I expect high
quality of a Gucci product”) was not included in the scale for two reasons, the first being an
increase in Cronbach’s alpha from 0.79 to 0.85. The second reason was that early analyses
showed significantly different relations between quality perceptions and expectations
with other variables. This will be explicated further in the thesis.
In the experiment, the distinction between high fit and low fit was made by the
author, using H&M as a high fit brand and V&D as a low fit brand. To assure the
respondents’ agreement with this distinction, a two item perceived fit scale was
constructed. The scores in both groups where these questions were posed were
significantly different (see ‘manipulation checks’ section below), and the Cronbach’s alpha
score are thus displayed separately in Table 2 below.
The last scale up for reliability analysis was the control variable ‘fashion clothing
involvement’. The two items included are the strongest items, based on factor loadings,
from a pre-developed scale by O’Cass (2004). To that extent, the inter-item correlation of
0.64 was well above the 0.3 level proposed by Pallant (2010). This resulted in a Cronbach’s
alpha of 0.76.

35
 Table 2: Reliability Analysis
N of items Cronbach’s Alpha

Purchase Intention 2 0.933

Perceived Quality 2 0.853
Perceived Fit (high fit condition) 2 0.756
Perceived Fit (low fit condition) 2 0.721
Fashion Involvement 2 0.761

7.3 MANIPULATION CHECKS

One manipulation check was in order. Two appropriate pairings of luxury fashion brand
and retailer were sought for the experiment: a pairing which is perceived to have a high fit,
and one which is perceived to have a low fit. These pairings are the result of the one
repeated measures factor (high level of designer/retailer fit vs. low level of
designer/retailer fit), which resulted in the study’s 2x2 design (as the collaboration
treatment differs as well) . For this design to be reliable, a two item perceived fit scale was
constructed as manipulation check. The scale measures the fit between both brands in a
collaborative effort and are taken from Lafferty et al. (2004), who themselves have based
the measure on an influential article by Aaker and Keller (1990). To this extent, a one-
sample t-test was selected to be used, to compare the differences for both groups
separately. The perceived fit, on a 7 point Likert scale score, was found to be 4.34 in the
H&M collaboration condition and 3.20 in the V&D collaboration condition. According to
expectation, the high-fit group has a score above the median point of four and the low-fit
group a score below it. Both in the H&M condition ((t(62) = 2.18, p = 0.03) and the V&D
condition ( (t=62) = -4.89, p < 0.01) this difference was found to be significant. Thus, the
manipulation as such is reliable, and the division of the study conditions was rightfully
done.
Table 3: Manipulation check in collaboration conditions: perceived fit
Group Mean SD Sig. Mean diff. t

H&M – Gucci collaboration 4.34 1.2 0.033* 0.341 2.178

44
V&D – Gucci collaboration 3.20 1.3 0.000* –0.802 –4.894
00 *
* P-value <0.05, ** P-value < 0.01, Test value: 4

36
 7.4 HYPOTHESIS TESTING

The impact of the presented collaboration on Gucci is perhaps best visible through the
impact on the associations held in respondents’ minds. That is why this section is divided
in two sections: firstly and predominantly, the extent of transfer of brand associations.
Secondly, the impact of the collaboration on a number of outcome variables is touched
upon.

7.4.1 TRANSFER OF ASSOCIATIONS

H1a: In a fast-fashion collaboration a luxury brand’s image will become more similar to its
distribution channel image, as reflected by a smaller difference in association scores.

In order to be able to support or reject this hypothesis, two criteria will be consulted.
Firstly, the total image transfer, which was measured in accordance with the research by
Gwinner and Eaton (1999). To this extent, the absolute difference scores on 10 posed
statements were summed up for each channel-brand. This creates two congruence
indexes; one displaying the mean differences of Gucci and its channel on luxury
associations and one displaying the mean differences on channel associations. Smaller
numbers in the index display greater congruence (less difference between channel and
brand). As such, hypothesis 1a predicts that the congruence indexes will be significantly
smaller for the subjects in the ‘designer collaboration’ condition than in the ‘no designer
collaboration’. Hypothesis 1a was analyzed using a one-way MANOVA, between groups
design. With collaboration treatment (yes = 1, no = 0) as the between groups factor, a
significant multivariate effect was found for collaboration treatment (Wilks’ lambda=0.97,
F (2,240) = 12.33, p = 0.04). The sample means are displayed in Table 4 below.

Table 4: Collaboration treatment effects

Luxury associations Channel
associations
No designer collaboration 12.76 (SD=4.00) 13.08 (SD=4.22)
Designer collaboration 11.79 (SD=3.93) 11.83 (SD=4.38)

37
Following up the significant multivariate effect, univariate ANOVAs were run to determine
between-subject effects. Collaboration treatment, while significantly decreasing the
channel congruence index ( F(1,241) = 5.39, p = 0.02), did not decrease the luxury
congruence index ( F(1,241) = 3.67, p = 0.06) at the 5% significance level. By this means,
hypothesis 1a can be partially supported: Gucci’s image has come closer to its paired
channel brand, due to greater congruence in association scores. However, there is a
greater image transfer in channel associations. Therefore, in hypotheses 1b and 1c below,
the separate scores on these associations will be assessed.

In a fast-fashion collaboration a luxury brand’s image will become more similar to its
distribution channel image, as reflected by

H1b) a lower score on typical luxury associations

H1c) a higher score on typical distribution channel associations

For Gucci, a ‘Luxury score’ was computed. This scale was composed by the 5 luxury
association statements presented to each respondent, regardless of condition. Respondent
could rate their agreement with these statements on a 7 point Likert scale; items
developed by Vigneron and Johnson (2004) for the measurement of the dimensions of
brand luxury. An example is the statement “Gucci is Exclusive” (M = 5.81, SD = 1.22). A
reliability analysis was conducted to assess whether the 5 statements could be measured
in one scale: with an Cronbach’s alpha of 0.76 this was indeed the case. Combining these
into one Luxury score (M = 5.45, SD = 0.89) implies that hypothesis 1b can be analyzed by
these means. Independent-samples t tests were run for this analysis; the results are
displayed in Table 3 below. As can be seen, the luxury score is significantly lower in the
collaboration condition ( t(241) = –2.22, p = 0.027). This entails that hypothesis 1b is
supported.
Subsequently, a ‘Channel score’ for Gucci was computed, in a scale composed by the
5 fashion distribution channel association statements. Again, a reliability analysis was
performed to assess the reliability of this scale. This was assured by the Cronbach’s alpha
of 0.71. As such, hypothesis 1c was analyzed using this Channel score (M = 2.79, SD = 0.81).
Hypothesis 1c is supported, as the Channel score is significantly higher in a collaborative
effort ( t(241) = 3.27, p = 0.001). The means of the channel score and all separate
statements are displayed in Table 5 below. The discussion section of this thesis will shed
light on what these individual results imply.

38
 Table 5: Gucci Association statement means
Mean no Mean Mean diff. Sig. t
collaboration collaboration
Luxury score 5.58 5.33 –0.25 0.027* –2.22
Luxurious 6.07 5.67 –0.39 0.008** –2.66
Glamorous 5.21 4.71 –0.51 0.006** –2.79
Leading 4.25 4.32 +0.07 0.706 0.38
Exclusive 5.85 5.77 –0.08 0.626 –0.49
Expensive 6.55 6.20 –0.35 0.003** –3.03
Channel score 2.61 2.95 +0.33 0.001** 3.27
Modest 2.38 2.50 +0.12 0.440 0.77
Down-to-earth 2.39 2.77 +0.38 0.010** 2.59
Casual 2.77 2.72 –0.05 0.771 –0.29
Accessible 2.26 2.88 +0.63 <0.001** 4.11
Fast 3.26 3.86 +0.60 <0.001** 4.08
* P-value <0.05, ** P-value < .01

H1d: A luxury brand will develop new associations in consumer’s minds when it collaborates
with a fast-fashion retail channel

Hypothesis 1d entails a change in the associative network for Gucci in the collaboration
condition. To this extent, a free association method was used to gain insight on possible
effects on the associations respondents have with Gucci. Associations of the partnering
channel have been measured as well, but will not be subject of further analysis, as the
focus is on the luxury brand. The IBRA method – a collection of attributes that most
probably underlie the representation of brands – will be used to distinguish the different
associations respondents had.

Firstly, the impact of a collaboration on the average number of associations (a measure of

strength) was measured. The overall average number of free associations respondents had
for Gucci was 4.55 (SD = 2.47). An independent samples t test revealed that this number
was not significantly different in both groups (t(241) = 0.73, p = 0.47). Subsequently, a
two-way ANOVA was performed to assess the moderating effect the brand experience with
Gucci may have; it’s not unthinkable that experienced Gucci buyers have more associations

39
or are compelled to share their thoughts more. Indeed, in Figure 3 below, brand
experience seems to produce different outcomes.

Figure 3: Average number of free Gucci associations by experience level

6

5.5

4.5

4
No collaboration Experienced participants in Inexperienced participants in
collaboration collaboration

A respondent was classified as experienced when the score on the statement “I’ve had
previous experiences with Gucci” was higher than a 4, on a 7 point Likert scale. As can be
see above, experienced buyers have more associations to share when Gucci enters a
cooperation, whereas those inexperienced with the brand have less to share. However, due
to large standard deviations, the interaction result has to be rejected at the 5% significance
level: F(1,241) = 3.21, p = 0.074. This result pertains to the strength of the associations;
Krishnan (1996) asserts that the number of associations is a useful proxy for association
strength and a substantial indicator of customer-based brand equity.

As the number of associations does not differ significantly, the question remains whether
the content does. If so, H1d can still be supported. A total of 1105 Gucci associations were
collected. A word cloud of these associations is depicted below in Figure 4; the size of the
word in the picture expresses the number of mentions.

40
 Figure 4: Gucci total association word cloud

As can be seen; the most prominent association in consumer minds’ was price. 83.1% of
the respondents had a price association with Gucci, with the word ‘expensive’ being the
most prominent. In fact, all price associations were ‘negative’, and focused on Gucci being
expensive or too expensive. Whether this is really negative is ambiguous, as Gucci
deliberately works on its expensive image. The valence or favorability of the associations
were unfortunately not asked out, so this is unclear. Conversely, a substantial number of
respondents provided a clearly evaluative association. These are displayed in Table 6
below.

Table 6: Evaluative Gucci associations

Positive evaluation Negative evaluation

Beautiful Not my taste
Sexy Raunchy
Top brand Excess
Pretty Tacky
Wanted Fake
Flawless Decadent

41
For further investigation, every association was assigned to one of 12 association
categories. The average percentage of occurrence of each category is displayed in Table 7
below. The categories were based on the IBRA framework by Timmerman (2001), as
explained in section 6.1 of this thesis. After analyzing, minor adjustments were made to
accommodate the specific associations respondents had.

Table 7: Association categories

Type of association Percentage of

occurrence
Category 24.3
Product 30.0
Market availability 8.6
Brand values 60.1
Brand (primary) 20.2
Brand (secondary) 30.5
Brand user image 20.6
Positive evaluation 13.6
Negative evaluation 35.4
Price 83.1
Product quality 15.6
Usage situation 4.1

Independent sample t tests were performed on all the above categories with collaboration
treatment as grouping variable. In Figure 5 the categories which had a difference
significant on the 5% level or below are displayed.

42
 Figure 5: percentage of occurrence of association categories

50%

40%

30%

No collaboration
20%
Collaboration

10%

0%
Product** Brand Negative
(secondary)* evaluation*

*P-value <0.05, ** P-value < 0.01

On the y-axis the percentage of occurrence is displayed. As seen, in a collaboration, Gucci’s

category associations, product associations and secondary brand associations are
significantly lowered. A decline in product associations might convey a dilation of the
brand image. Not only the number of product associations, but as well the type
experienced a difference. The strongest product association in the no collaboration
condition was “bags”. Clearly, Gucci bags appeal to the imagination of the respondents, as
they are mentioned around twice as much as the association “clothing”. Surprisingly, the
collaboration treatment achieves a substantial change in the type of products linked to
Gucci. Other associations aside, perfume is now the most predominant association. This is
even more unexpected as the respondents in the collaboration condition were shown a
piece of Gucci clothing (of the fake collaboration line). This has not led to Gucci being
associated more with clothing; in fact, the opposite. It’s too soon to conclude that this
collaboration, or one in general, dilutes brand image. However, the findings are
interesting, and are displayed in Figure 6 and 7 below.

43
 Figure 6: type of Gucci product associations, no collaboration

Other Bags
33% 35%

Clothing Perfume
17% 15%

Figure 7: type of Gucci product associations, no collaboration

Bags
21%
Other
40%

Perfume
24%

Clothing
15%

Conversely, primary brand associations and negative evaluations seem to be triggered

more, as could be seen in Figure 5 above. Interestingly, price associations seemed to not
have changed, which is not as expected. Possible effects on the first mentioned
associations were investigated as well, to assess whether this produces different results.
This is depicted in Figure 8 below.

44
 Figure 8: percentage of occurrence of first associations

70

60

50

40
No collaboration
30
Collaboration
20

10

0
Category Product Brand Positive Negative Price
values evaluation evaluation
Above displayed all significant, P-value < 0.05

When it comes to first associations, again category and product associations are less likely
to enter respondents’ mind in a collaboration. However, now price associations differ
significantly as well: as expected, when Gucci enters a collaboration, the first association is
less likely to be the thought that Gucci is expensive. However, whether this leads to more
favorable attitudes is another story: both positive and negative evaluations are
significantly more triggered as a first association. This is interesting, as there was no
specific question aimed to determine valence; respondents were merely asked to list
associations. Some of the negative associations were already mentioned, earlier in the
section. An interesting insight might be the possible effect of the collaboration treatment
on the type of negative associations, as opposed to the number of negative associations
(which increased, as shown above). As such, in Figure 9 below these association category
has been dissected. It can be seen that originally, respondents are predominantly
concerned with their taste in the product; while 23% of the negative associations is a
variant of ‘not my taste’, 37% is a qualification of Gucci as tacky or raunchy. A substantial
proportion (16%) is targeted at Gucci’s inaccessibility. With an eye to the earlier described
tradeoff between exclusivity and accessibility, it’s not unexpected that this association
declined most gravely. In the collaboration conditions, the association ‘inaccessible’
declined to just 2%. In fact, only 2 respondents described Gucci as inaccessible after being
45
exposed to the collaboration poster. This is an excellent example of how designer/fast-
fashion collaborations are dealing with the tradeoff between exclusivity and accessibility.

Figure 9: type of negative Gucci associations

All in all, considering the extensive evidence above, the collaborative effort has definitely
constituted a change in associative network for Gucci: hypothesis 1d can be supported.

46
 7.4.2 OUTCOME VARIABLES

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 two outcome variables refer to two of the scales mentioned above in this chapter:
quality perceptions (M = 5.24, SD = 0.96) and purchase intention (M = 3.06, SD = 1.44). As
can be seen, purchase intention is already moderately low, as it is significantly lower than
the median value of four ( t(242)= –10.14, p < 0.01). A dummy variable is created,
measuring whether a respondent has a purchase intention higher than 4 (on a 7 point
Likert scale). Using this dummy variable, it was investigated whether the respondents with
a high purchase intention were evenly spread over the conditions. This was indeed the
case, as their number was not significantly different across conditions ( t(115) = 0.07, p =
0.94). As such, there are no impediments for carrying out the following analyses.

The impact of a collaboration on the two outcome variables was measured using a one-
way MANOVA, between groups design. With collaboration treatment (yes = 1, no = 0) as
the between groups factor, a significant multivariate effect was found for collaboration
treatment (Wilks’ lambda=0.96, F (2,240) = 4.76, p = 0.01). The sample means are
displayed in Table 8 below.

Table 8: Collaboration treatment effects

Perceived quality Purchase intention

No designer collaboration 5.42 3.24
Designer collaboration 5.08 2.90

Within the analysis, univariate ANOVAs were run to determine between-subject effects.
Collaboration treatment significantly decreased perceived quality ( F(1,241) = 7.59, p <
0.01). However, the decrease in purchase intention was not significant ( F(1,241) = 3.29, p
= 0.07) at the 5% significance level. Therefore, hypothesis 2a is supported and hypothesis 2b
is rejected.

47
H3 In a fast-fashion collaboration, a high image-based channel fit (vs. a low fit) lessens the
negative effect on

(a) luxury association scores

(b) luxury brand quality perceptions

(c) luxury brand purchase intention

As stated before, the participants in the experiments were divided into 4 groups, a 2x2
design, based on image-based fit on the one hand and the collaboration condition on the
other hand. The three outcome variables (luxury score, quality perception, purchase
intention) were all tested in univariate ANOVAs in H2 above. Now, Fit will be added as a
fixed factor in Two-way ANOVAs. The first outcome tested is the luxury score. It seems
that the interaction of fit and collaboration, which is the variable of interest in hypothesis
3, does not have a significant impact ( F(1,239) = 1.92; p = 0.17) on the luxury score. The
relationships do follow the hypothesized directions: in the low fit condition the luxury
score decreases from 5.59 to 5.18 and in the high fit condition the decrease is minified;
from 5.58 to 5.49. Figure 10 depicts this relation, where as expected, the collaboration
with V&D has more (negative) impact on Gucci’s luxury score than the collaboration with
H&M. However, at the 5% significance level, hypothesis 3a has to be rejected.

Figure 10: impact of fit on Gucci luxury score

5.7

5.6

5.5

5.4

5.3

5.2

5.1
No collaboration Low fit collaboration High fit collaboration

48
Subsequently, the interaction effect of fit and collaboration on Gucci’s quality perceptions
was investigated. Both the separate effect of fit ( F(1,239) = 1.73; p = 0.19) and the
interaction effect ( F(1,239) = 1.92; p = 0.17) were found not to be significant. While there
is a substantial decrease in the V&D collaboration, the size of the standard error didn’t
permit a significant result. Interestingly, the H&M collaboration also resulted in lower
quality perceptions. Its years of experience in designer collaborations seem not to matter.
Another interesting connation might be the effect fit had on quality expectations. Fit and
collaboration had a significant interaction effect on quality expectations ( F(1,239) = 5.44;
p = 0.02). This entails that while there is no moderating effect of channel fit on quality
perceptions, it does change people’s expectations. For now, as expectations were not a part
of the hypothesis: hypothesis 3b has to be rejected. Figure 11 below shows the result of this
analysis.

Figure 11a: impact of fit on Gucci quality perceptions

5.7

5.5

5.3

5.1

4.9

4.7

4.5
No collaboration Low fit collaboration High fit collaboration

Figure 11b: impact of fit on Gucci quality expectations

6.4
6.2
6
5.8
5.6
5.4
5.2
No collaboration Low fit collaboration High fit collaboration

49
Lastly, the impact of fit on the purchase intention variable was assessed, again in a two-
way ANOVA. Again, the separate effect of fit ( F(1,239) = 0.59; p = 0.81) and the interaction
effect ( F(1,239) = 0.553; p = 0.46) proved not to be significant. The latter effect is the
effect of interest. It seems that the fact whether Gucci works with H&M or V&D does not
have a significant impact on whether people buy Gucci products.

However, this is not entirely true. Note that respondents were told that a line of Gucci
products, specifically designed for the retailer, was about to hit the shelves. Next to the
Gucci purchase intention, the purchase intention for the collaborative products was
measured. This was measured by a score on a 7 point Likert scale on the statement “I
would buy a product of the H&M/V&D and Gucci collaboration”. This score for the H&M
product line (M = 3.70, SD = 1.74) was compared to the V&D Gucci product line (M = 3.05,
SD = 1.76) in an independent samples t test. The results were indeed significantly different
( t(124) = 2.09, p = 0.04). This entails that the fit of collaboration does not matter for the
purchase of the original product (‘regular’ Gucci), but does so for the sales of the
collaborative effort. Hypothesis 3c has to be rejected. Figure 12 depicts this relationship.

Figure 12: impact of fit on purchase intention

3.5

3.3

3.1 Low fit

High fit

2.9

2.7
No collaboration Collaboration

50
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

A respondent is classified as having a high Gucci brand familiarity when his score on the 7
point Likert brand familiarity scale is higher than 4. Subsequently, two-way ANOVAs were
performed using the high familiarity dummy as fixed factor. Firstly, the luxury score was
taken as dependent variable. The separate effect of familiarity proved to have a significant
positive effect ( F(1,239) = 4.81; p = 0.03) on the luxury score. That means that people who
are more familiar and experienced with Gucci are more likely to have a luxurious image of
the brand. This is depicted by the red line being above the blue one and makes perfect
sense; if an individual has a low image of Gucci, he would probably not be an avid buyer.
However, there is no interaction effect with familiarity and collaboration; even in a
collaboration, the luxury score of familiar respondents remains well above the unfamiliar
participants’ score. This can be seen in figure 13. The interaction effect does intensify the
decline in luxury score, but is insignificant ( F(1,239) = 0.08; p = 0.77). Therefore,
hypothesis 4a has to be rejected.

Figure 13: impact of familiarity with Gucci on its luxury score

5.8

5.7

5.6

5.5 Low familiarity

High familiarity
5.4

5.3

5.2
No collaboration Collaboration

51
Following, the effect of familiarity on Gucci’s quality perceptions was investigated. Unlike
in the figure above, the separate effect of familiarity is insignificant; F(1,239) = 1.87; p =
0.17). This entails that (regardless of collaborative efforts) being more experienced with
Gucci does not lead to believing the brand offers more qualitative products. This is not part
of the hypothesis however; the interest is in the interaction effect of familiarity and
collaboration treatment. This effect, unlike above, is significant: F(1,239) = 4.42; p = 0.04).
In the no collaboration condition, the familiar respondents had a quality perception score
well above their counterparts. In the collaboration condition, it declined so gravely that it
became lower than the unfamiliar score. This means that experienced Gucci buyers are a
lot more receptive to quality, as they are inclined to believe a collaboration leads to lower
quality of the brand as a whole. Clearly, hypothesis 4b is supported.

Figure 14: impact of familiarity with Gucci on its quality perceptions

5.9

5.7

5.5
Low familiarity
5.3 High familiarity

5.1

4.9
No collaboration Collaboration

Lastly, the impact of familiarity on the purchase intention variable was assessed and the
separate effect showed to be very significant: F(1,239) = 101.9; p < 0.001). This should be
no surprise, familiarity and previous buying experiences are undoubtedly resulting in a
higher purchase intention. More interesting is the interaction effect: hypothesized was that
familiar respondents would see a larger decline in purchase intention, as they would be
disappointed with the collaboration. Surprisingly, the opposite was the case: whereas
unfamiliar respondents were less inclined to buy Gucci after the collaboration was
presented, familiar respondents saw an increase in purchase intention (!). While
astonishing, this interaction effect proved not to be significant ( F(1,239) = 0.553; p =
0.46). Hypothesis 4c has to be rejected. Figure 15 depicts this relationship.

52
 Figure 15: impact of familiarity with Gucci on its purchase intention

4.6

4.2

3.8
Low familiarity
3.4
High familiarity
3

2.6

2.2
No collaboration Collaboration

H5: A structural collaboration is perceived as

(a) more logical

(b) more preferred

in a high fit luxury fast-fashion collaboration (vs. low fit).

To assess this hypothesis, two statements were posed in both collaboration conditions: “It
is logical if this collaboration launches next year as well” & “I would prefer a one-time
collaboration over a structural one”(reverse-coded). The means for both groups are
displayed in the table below.

Table 9: Collaboration opinions

V&D collaboration H&M collaboration On average

Logical 3.24 (SD=1.24) 3.32 (SD=1.48) 3.28 (SD = 1.36)

Preferred 3.43 (SD=1.48) 2.84 (SD=1.33) 3.13 (SD = 1.43)

High fit seems to make a structural collaboration a little more logical. However, in an
independent samples t test, this result is found not to have a significant effect ((t(124) =
0.33, p = 0.75). Subsequently, a rather unexpected result in the case of whether a
structural collaboration is preferred. Not the high-fit collaboration, but the low-fit
collaboration is more preferred to go structural. The discussion section sheds light on this
remarkable outcome. For now, hypothesis H5c has to be rejected.

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 8. DISCUSSION

The hypotheses of this thesis were established based on the assumption that designer-
retailer collaborations provide a solid basis for testing the impact of the distribution
channel as source of secondary knowledge. A framework of relationships was presented
which was tested by a series of analyses. A substantial number of sub-hypotheses had to
be rejected. Therefore, the results of these analyses outlined in the previous chapter will
be discussed, interpreted and linked to existing literature in this chapter. Further, both the
theoretical and managerial implications of these results are discussed.

8.1 FINDINGS

8.1.1 IMAGE TRANSFER

The extent of image transfer from a distribution channel to a luxury brand was researched
utilizing different methods, in an attempt to provide a clearer picture of this
underdeveloped field of research. In hypothesis 1, image transfer was conceptualized as a
change in differences between brands, a change in luxury and retail scores and a change in
associative network. The hypothesis as a whole could be confirmed; in collaboration, a
luxury brand’s image will become more similar to its distribution channel image.
In consumers’ minds, Gucci’s collaboration has led it to having fewer differences
with fast-fashion retailers. In the case of H&M, this could be due to its lifted luxury image
because of the repeated collaborations with a variety of designer. However, after being
informed about the collaboration, respondents still saw Gucci as faster, more down-to-
earth and more accessible (p<0.001). Correspondingly, Gucci was seen as less luxurious,
glamorous and expensive(p<0.01). Interestingly, the trade-off between accessibility and
exclusivity mentioned throughout the literature was not entirely supported in the results;
while the collaboration led to higher perceived accessibility, the exclusivity of the brand
was not significantly lowered. This is empirical support for the existence of masstige, a
concept described by Truong et al. (2009). The authors state that the success factor of a
masstige strategy lies in adequate price premiums, which ideally ensure that middle-class
consumers have access to the brand only on an occasional basis (p.380). Truong et al.
(2009) assert that brand dilution occurs when purchases from middle-class consumer
become habitual, lessening exclusivity. This might explain why Gucci is not regarded as
less exclusive: the collaboration was described a one-off. This implies that consumers of

54
these collaborative products are not always in the opportunity to become habitual Gucci
buyers.

Interestingly, the collaboration brought about larger differences in Gucci’s retail score than
in Gucci’s luxury score. This pattern was also visible in the testing of hypothesis 1a, where
the collaboration led to greater congruence in channel-related scores but not significantly
so in luxury-related scores. How can this result be explained? The research field offers two
potential explanations. Firstly, generally information consistent with existing brand
associations should be learned and remembered more easily than unrelated information.
However, Keller (1993) asserts that inconsistent information, through its unexpectedness,
may lead to more elaborate processing and stronger associations (p. 7). Gucci has not ever
been near a fast-fashion collaboration, which classifies the collaborative effort described in
the experiment as inconsistent information. Following Keller’s (1993) reasoning this
would affects consumers’ ability to learn new brand information. A second explanation for
the larger effect of channel-related associations may lie in the nature of the involved
brands. Aaker and Keller (1992) found that in the case of a single brand extension,
favorable extension evaluations were evident for a high quality core brand, but not for an
average quality core brand. As seen in the results, Gucci is regarded to be a high quality
brand, with a quality perception score higher than 5. Aaker and Keller (1992) suggest that
a high quality brand is able to be stretched further than an average quality brand. The
‘stretch’ of Gucci into a new sales field thus leads to lower changes in existing brand
associations, and a higher change in new associations. This is congruent with the literature:
following the associative network memory model proposed by Keller (1993, p. 2), new
associations are easier to learn than existing ones are to ‘unlearn’.

A final interesting finding of this thesis with regards to image transfer is the confirmation
of hypothesis 1d: a significant change in Gucci’s associative network. A study by Krishnan
(1996) displayed that high equity brands, compared to brands with low equity, have a
larger number of associations and more net positive associations. The author views the
number of associations to be an indicator of association strength, as it eases the activation
of memory nodes. Unfortunately, while as such the strength of the associations was
measured in this thesis, the valence was not. Therefore, no results on favorability can be
inferred. Negative evaluations were triggered more, and were mentioned more often in the
collaboration condition. These seemed to replace other association categories, because
when returning to strength; there was no significant change in the number of associations

55
comparing the collaboration and no-collaboration group ( t(241) = 0.73, p = 0.47). This is
nonetheless an interesting result from Gucci’s standpoint: collaborating with a retailer
does not lower its brand equity, as Krishnan (1996) asserts that the number of
associations is a substantial indicator of customer-based brand equity. A remarkable result
of this thesis is the moderating effect of brand experience on the number of associations.
In a collaboration, experienced respondents saw an increase of average number of
associations of 4.59 to 5.67, where inexperienced respondents saw a decrease. The
interaction result was only significant at the 10% level and had to be rejected at the 5%
significance level (F(1,241) = 3.21, p = 0.074), yet it may indicate a counterproductive
effect of the collaboration. Building brand awareness and consequently brand equity with
new consumers is one of the main reasons to enter a retailer collaboration. Conversely, it
is now suggested that equity is built in current consumers and slightly diminished in ‘new’
consumers.

Whereas the number of associations did not differ significantly, the content did. The
collaboration decreased category and product associations significantly and increased
both primary and secondary brand identifiers. Interpreting these results is difficult: does
this imply that Gucci’s brand equity is weakened as the associations ‘designer’ and ‘fashion
brand’ are mentioned less? Or, conversely, is its equity strengthened as displayed by an
increase in brand-related associations? Within the earlier presented context of associative
networks, brand identifiers are considered to be nodes. In this case, the collaboration
seems to have activated these nodes. This is especially the case with the first-mentioned
associations, which are deemed to be the strongest (Krishnan, 1996). Again, category and
product associations were decreased. Interestingly, the strongest associations in both
conditions were the price associations, with the word ‘expensive’ as absolute number one.
Looking at first mentioned associations, the percentage of price associations decreased
from 59% to 44%. Not unexpectedly, the collaboration has led Gucci to be regarded as less
expensive. Whether this is problematic depends on the brands’ strategy: is it crucial for
your brand to be seen as expensive? Or is a decrease in perceived expensiveness
acceptable in exchange for an increase in brand awareness? This undoubtedly differs per
luxury brand.

56
 8.1.2 QUALITY PERCEPTIONS AND PURCHASE INTENTION

Expected was that in a collaborative effort with a distribution channel, the linked luxury
brand would have to deal with lower perceptions of quality and less willingness to buy.
The results revealed that Gucci was indeed perceived to be of lower quality, but that this
had not lead to a lower purchase intention. Rao et al. (1996) 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. The latter explanation may be at hand in this particular case; the quality of
Gucci’s collaborative product line is totally unobservable. There has not been such a
product before, and consumers don’t know whether the quality is closer to that of Gucci’s
regular products or H&M/V&D’s regular products. As such, the consumer evaluates the
credibility the brand ally signals and takes a more moderate standpoint towards Gucci’s
products. The perceived quality score decreased from 5.42 to 5.08 (on a 7 point Likert
scale). Note that this concerns the regular product line by Gucci, and not the quality of the
collaboration. This thesis thus seems to confirm one of the largest fears many traditional
luxury labels have with participating in fast-fashion collaborations: the idea of a ‘bad copy’.
Obviously, the quality of such collaborations cannot be of a very high level as they’re
generally affordably priced. In this context, a quote by Domenico Dolce (of Dolce &
Gabbana) displays the brands’ concern:

“Recently, it’s all trusciume [in Sicilian, cheap, trashy] — there’s no quality, these fast-fashion
companies churning out looks. People thought it was cool, but it’s cheap. You can’t expect
quality at 20 euros. It’s like good codfish at 5 euros — how can it be? But it's not a matter of
price. Elegance is intellectual; it's about good taste, the cut, proportions, quality, how you
carry yours”

However, the lack of impact on purchase intention found in this thesis should be able to
reassure most designers. The average purchase intention decreased from 3.2 to 2.9 on a 7
point Likert scale. It can be argued that the purchase intention was already low, and that
more familiar consumers might have different reactions. Therefore, both fit and
experience were considered as moderating variables.

57
 8.1.3 FIT AND FAMILIARITY

A remarkable finding was the lack of moderating effect the level of image-based channel fit
had on the outcome variables. Hypothesis 3 as a whole, through the rejection of its sub-
hypotheses, could not be accepted: a low fit collaboration does not necessarily lead to
lower perceptions and purchase intentions. This is rather unexpected, as fit is a well-
established variable in the literature on secondary brand knowledge (Simonin & Ruth,
1998; Erdogan, 1999; Keller, 2003). However, there are some nuances to be made.

Firstly, Simonin and Ruth (1998) found that neither product fit nor brand fit moderated
the spillover effects of brand alliances on consumer brand attitudes. Brand alliances
involve “the simultaneous association of two or more brands in joint marketing activity”,
according to the authors (p. 31). Consequently, regarding the Gucci collaborations as
brand alliances, this might explain why the luxury score not differ significantly by fit. This
would have made sense however; it was not unimaginable that working together with
V&D, which was perceived by the respondents to be substantially low-fit (fit score of 3.20),
would lead Gucci to be perceived as less luxurious. However, perhaps the most noteworthy
consequence of the rejection of hypothesis 3 is that consumers are able to distinguish the
collaborative product from the luxury brand. For example, while fit did not moderate the
purchase intention for Gucci, it did moderate the purchase intention for the collaborative
products. The score for the H&M product line was found to be significantly higher than the
V&D product line ( t(124) = 2.09, p = 0.02). This entails that the fit of collaboration does
not matter for the purchase of the original product (‘regular’ Gucci), but does so for the
sales of the collaborative effort. Even in the high fit condition, the purchase intention for
the collaboration seemed low (M = 3.70, SD = 1.74). However, taking another look at the
data reveals that this still entails that in the sample 30.2% of H&M shoppers would buy the
collaborative product, compared to 22.2% of V&D shoppers. All in all, this is a positive
result for designers; they are able to put out collaborations without being afraid of it
leading to lower sales of their original products, even when working together with a
channel that seems farther away from the designer’s core business. The sales of the
collaborative products will vary, yet this is not problematic as the success is not measured
in sales volume, but in overall media impressions.

58
Compared to fit, familiarity was more significantly related to the outcome variables.
However, the results of hypothesis 4 display a dilemma for designers doubting to
collaborate with a retailer that serves a substantial amount of designer-familiar shoppers
or not. Whereas familiarity had a negative interaction effect on quality perceptions, there
was an unexpected positive effect on purchase intention. This remarkable result is
described below.
However, starting with quality perceptions; in the no collaboration condition, the
familiar respondents had a quality perception score well above their counterparts. In the
collaboration condition, it declined so gravely that it became lower than the unfamiliar
score. This means that experienced Gucci buyers are a lot more receptive to quality. This is
consistent with the research by Kirmani et al. (1999), who found that there is an
‘ownership effect’ at play in prestige brands. A so-called downward stretch, comparable to
the Gucci collaboration, led to more negative perceptions with owners. Kirmani et al.
(1999) have found that such a dilution only occurred when it stretched using a direct
extension. In the case of a sub-brand extension, the parent brand image was not diluted (p.
99). This might be something to consider for future research.
A surprising result was that whereas unfamiliar respondents were less inclined to
buy Gucci after the collaboration was presented, familiar respondents saw a slight increase
in purchase intention (!). While astonishing, this interaction effect proved not to be
significant ( F(1,239) = 0.553; p = 0.46). As such not too much importance should be
attached to its implications, as the result is insignificant. Nonetheless, an explanation for
the effect can be given by Laroche et al. (1996). The authors researched the role of
confidence in the brand in this context and found not only that it is one of the
determinants of purchase intention, but as well that brand confidence results from brand
familiarity or experience. Laroche et al. (1996) also assert that the more important the
product category is, the stronger the effects of confidence on intention will be. These
findings might be at play in this thesis. It could be that respondents experienced with Gucci
felt more confident about the brand when hearing about the collaboration, leading to a
higher purchase intention. An apparent entailment is that measuring brand confidence as
well will prove to be interesting in future research. It should be noted that this effect is
unexpected: if anything, a collaboration was believed to lead to less confidence.

59
 8.2 THEORETICAL IMPLICATIONS

Building from the notion by Keller (1993, 2001, 2003) that brand knowledge is based on
the associations held in memory for the brand, the role of the distribution channel as
source of secondary brand knowledge was examined. Specifically, this role in the context
of the luxury fashion market was considered. A luxury brand’s image was found to become
more similar to its distribution channel image. Theoretically, this establishes a first result
for the transfer of channel associations, a field which has received so little attention from
researchers (Inman et al., 2004). This signifies and extends the understanding of the
secondary brand knowledge framework, of which each source is now empirically tested.
The results pose a challenge for the literature field in testing the transferability of the
channel association transfer results to markets outside of the luxury field. In addition, this
study has for a large part rejected a moderating variables widespread throughout the
literature; fit. A channel collaboration by itself does have significant impact on association
transfer, perceptions and intentions; varying fit does not. As there is lack of empirical
research on channel associations, it is unclear whether this only holds in the luxury
fashion context. In any event, the theoretical implication is the notion that consumers are
able to distinguish a channel collaborative product from an original product: fit had a
significant impact on the assessment of the former, but not the latter.

In this context, the effect of fit on quality expectations versus quality perceptions is also
noteworthy: fit had a significant impact on expectations, yet not on perceptions. This is
somewhat surprising. The statement “I expect high quality of a Gucci product” was asked
out to measure expectations. The theoretical impact of this finding might be able to extend
to other sources in the secondary knowledge framework, where quality perceptions rather
than expectations are conventional. The interpretation of this finding will also depend on
future research. For now, it is unclear why consumers do expect lower quality in a low-fit
collaboration, but do not alter their actual perceptions. Open-ended questions targeted to
explain this may offer some answers. One explanation might be their familiarity with
designer-retailer collaborations, and their knowledge of the quality of these products. This
lowers the expectations, and consumers take this into consideration in their quality
perceptions.

60
Finally, the study has established a significant effect of channel collaboration on a luxury
brand’s associative network, using a free association methodology. The number of
associations did not differ between groups, yet the content did. The presence of product
and category associations decreased in consumers’ minds, whereas both primary and
secondary brand identifiers were mentioned more. Using the free association framework
is uncommon in the literature on secondary brand knowledge, excluding research on
brand alliances (James, 2005). Established was the importance of the price category in
luxury brand associations and different effects on first associations vs. total associations,
which may indicate a surprise effect of a channel collaboration. This had not been
empirically investigated before, and may motivate the research field in finding similar
effects in pairings with other secondary brand knowledge sources.

8.3 MANAGERIAL IMPLICATIONS

From a managerial perspective, this study is able to offer a number of implications.

Findings from this study will aid luxury fashion in ascertaining if there are any underlying
risks in distributing their brands through channels with poor fit, which channels to seek
and which to avoid. Understanding the effect of channel associations on their brand is
crucial for luxury fashion managers in deciding whether the risk of pursuing a retailer
collaboration is worthwhile. This study provides evidence that managers, when
contemplating such a collaboration, should not only take traditional research on secondary
brand knowledge into consideration. This study has shown that consumers distinguish the
collaborative product from the original product, lessening the effect of fit. Practically: the
amount of fit does not matter for the sales or image of the luxury brand. It does matter for
the sales of the collaborative product, which is usually not a motive for collaborating. As
such, the decision luxury fashion managers have to make is reduced to: do we, as a
company, mind being regarded as more accessible, less expensive and less qualitative,
even though our sales are unaffected? If the answer is confirmative, the brand should not
engage in the collaboration. As this will differ per brand, this study cannot give a definite
answer.

Interesting to know is that Gucci was not found to be less exclusive because of the
collaboration. In general, the ‘luxury status’ of the brand is affected less than its ‘channel
status’. Managers should factor this into their decision, by creating a one-off collaboration
instead of a structural one. A structural collaboration is seen as less logical and less
preferred, and might also enforce the channel associations in consumers’ minds, by
61
strengthening them. The literature review found that dilution of the brand only occurred
when it stretched using a direct extension. In the case of a sub-brand extension, the parent
brand image was not diluted. This might be a worthwhile consideration for luxury fashion
managers; creating a sub-brand which is able to collaborate with a variety of retailers.
Finally, the study has found that experienced buyers are a lot more receptive to quality.
Pairing up with a channel where less familiar consumers tend to shop will thus lead to less
damage regarding the quality perceptions.

Managers of traditional luxury brands will particularly be able to draw lessons from the
lack of effects on purchase intention. This is the main fear with the large, traditional
brands; an Executive Vice President of Prada USA revealed that around 50% of the firm’s
sales come from just 5% of its customers. Similar brands fear disengaging this hugely
impactful 5% of its customers. It’s unclear whether these are the ‘brand lovers’ or the
affluent customers. In the former case, this thesis indicates that the brands’ fear cannot be
empirically supported. In fact, familiar respondents saw a slight increase in purchase
intention, rather than a decline. This entails that luxury brand managers are able to
partake in a retailer collaboration without fearing a loss in brand enthusiasts. On the
contrary, following the results of this study, managers would be advised to activate these
enthusiasts as well in their marketing efforts. In this manner, the brand will be able to
maintain or even improve sales, while introducing their brand to a whole new set of
customers. Of the top 10 luxury brands based on brand value (which Gucci is a part of), not
one has ever been near a retailer collaboration. Especially for these brands, the
abovementioned implications will be interesting. For example: not one of the brands
owned by LVMH, a French multinational luxury goods conglomerate with operating
income in the billions, has participate in a fast-fashion collaboration. This can be expected
from some of its brands: Louis Vuitton never goes on sale, for example. More interesting
would be one of LVMH’s designer brands like Marc Jacobs, which would follow H&M’s
interest in collaborating with designers rather than brands.

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 9. CONCLUSION

9.1 SUMMARY

This study has researched the extent of image transfer from a distribution channel to a
luxury brand. The goal was answering the main research question:

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

A channel collaboration was found to constitute a change in the associative network for
Gucci, to lower quality perceptions and not to affect purchase intentions. The context in
which this was investigated is the context of designer-retailer collaborations, a trend in the
fashion industry which is born from the tradeoff between exclusivity and accessibility and
needs to be studied further in future research according to Keller (2009). Truong et al.
(2009) assert that this focus on prestige 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 strategy is described as a ‘masstige’
strategy. The fashion market is an excellent example of the masstige concept in action:
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). The most notable collaborations have been with H&M, the leading fast fashion
retailer with over 2000 stores in 43 countries.
The literature field does not offer conclusive evidence on the possible effects of
such a collaboration. The notion of channel associations should offer substantial
conceptual appeal, yet has received little attention from researchers, according to Inman et
al. (2004). A literature search revealed that the research field indeed is lacking of extensive
empirical studies on the subject. The most relevant finding was that channel-category
associations were found to explain 72% of variation in channel share of volume in a study
by Inman et al. (2004). This entails that for channels with a strong product association,
manufacturers and retailers can leverage that association for competitive advantage.

63
This thesis indicates that these associations indeed are able to produce some leverage.
Whether this leads to a competitive advantage is unclear, and depends on the brand’s
objectives. The results revealed that the studied brand Gucci was perceived to be of lower
quality when it engaged in a collaboration. This is both a consequence of channel
association transfer and the lack of observability of Gucci’s collaborative product line. Rao
et al. (1996) state that overall perceptions of quality for a product in a brand alliance vary
depending on the credibility of the signal by the brand ally and whether the product’s
quality is easily observable. However, the lack of impact of channel associations on
purchase intention should be able to reassure most designers; a collaboration was not
found to have a significant impact on willingness to buy.

Two moderating variables were considered: channel fit and brand familiarity. A low fit
collaboration did not lead to lower perceptions and purchase intentions. This is rather
unexpected, as fit is a well-established variable in the literature on secondary brand
knowledge. An interesting conclusion was that consumers were able to distinguish the
collaborative product from the luxury brand. While fit did not moderate the purchase
intention for Gucci, it did moderate the purchase intention for the collaborative products.
Familiarity was more significantly related to the outcome variables, with a negative
interaction effect on quality perceptions and an unexpected (insignificant) positive effect
on purchase intention.

64
 9.2 LIMITATIONS

The results of this study should be considered in light of a number of constraints. Firstly,
the sample of participants was relatively young (average age of 22.89) and consequently
not particularly affluent (average monthly income of € 947.38). This was a consequence of
distribution strategy of the questionnaire, using fashion students and their networks. This
decision was made to find enough fashion-minded individuals in a short amount of time.
This ensured a dataset with more and richer sets of associations with the brands used in
the experiment, as the average of 4.55 associations with Gucci has displayed. However, it is
not unimaginable that this affected some outcomes in the study and as such poses a
limitation. Mainly because the typical luxury target is the upscale buyer with disposable
income (Atwal & Williams, 2009), this might produce skewed results. Perhaps, younger
audiences are less receptive to quality and care more about the brand name. This might
explain why the purchase intention was largely unaffected by a channel collaboration.
Whether older or more affluent consumers react differently is a question unanswered in
this thesis, as these variables were not controlled for in the (M)ANOVAs. This research is
primarily concerned with establishing a first empirical result on channel impact. Future
research will undoubtedly include control variables.

Furthermore, in both the free-association question and the 10 association statements

respondents were not asked whether they perceive the respective association as favorable
or unique. This would’ve aided the categorization of the associations. For example: is
‘unattainable’ as association for Gucci positive or negative? And how did the collaboration
affect those associations? As such, from the three key dimensions of brand associations by
Keller (1993) only strength could be measured, in the form of the number of associations.
This result was also insignificant. Lastly, in the current research only one luxury brand is
chosen: Gucci. Again, favorability towards the brand, which was not measured, might have
affected the outcome variables. In the questionnaire, a separate space was reserved for
comments and remarks by respondents. One of the comments (literal quote): “Gucci is not
really my thing; if you would replace it for another brand my answers would be very
different”. The limitation this poses could be a lack of transferability of the results to other
brands. This can neither be refuted nor proved as of now, and provides a direction for
future research.

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 9.3 FUTURE RESEARCH

The limitations inherent in this study introduce a number of opportunities for future
research. While the results off empirical support for a number of effects for a distribution
channel collaboration, there are limitations to the transferability of the findings. Future
studies should test the impact on other luxury brands and other product categories to
determine whether the results found here are externally valid and replicable. This would
also determine whether the lack of effect of fit was inherent to the brands used or a
common phenomenon in channel association transfer. An additional moderating variable
future studies may consider is brand confidence. Laroche et al. (1996) found that brand
confidence is one of the determinants of purchase intention, and results from brand
familiarity or experience. The authors assert that the more important the product category
is, the stronger the effects of confidence on intention will be. As such, it could be that
respondents experienced with Gucci felt more confident about the brand when hearing
about the collaboration, leading to a higher purchase intention.

Future research might consider testing different types of collaborative efforts. Experienced
Gucci buyers were found to be more receptive to quality. This is consistent with the
research by Kirmani et al. (1999), who found that there is an ‘ownership effect’ at play in
prestige brands. A so-called downward stretch, comparable to the Gucci collaboration, led
to more negative perceptions with owners. Kirmani et al. (1999) have found that such a
dilution only occurred when it stretched using a direct extension. In the case of a sub-
brand extension, the parent brand image was not diluted (p. 99). Future studies may
introduce a sub-brand channel collaboration to respondents, and test whether the results
of this study are replicated in terms of luxury brand outcomes.

A last direction for future research on luxury brands is the type of sample the study
utilizes. Even though using students is not uncommon in academic research, this limits the
generalizability of the results. Luxury brands target upscale buyers with disposable
income, which does not entirely overlap with the student samples regularly used. Future
research is advised to investigate the target group of luxury brands, in terms of age and
income. These should also be included as control variables in the studies’ analyses.

66
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APPENDIX A: MANIPULATED COLLABORATION POSTERS

69
 APPENDIX B: QUESTIONNAIRE

English version, high-fit collaboration condition

Dear participant,

This survey is constructed to better understand how people feel about brand
collaborations, specifically in the fashion industry. Both people who have an affinity
with fashion and those who do not are needed; your answers are valued!

The survey will take around 5-10 minutes to complete. To reward you for your input,
two €50 gift cards (retailer of your choice) will be raffled among the participants.

Thanks for your time!!

Wil je de Nederlandse versie van dit onderzoek? Klik dan rechtsboven op 'Nederlands'.

Q1 The first questions are about the brand H&M, and your experiences with it. I’ve had
previous experiences with H&M:
 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q2 I’m familiar with the brand H&M

 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q3 What are the thoughts and associations that come to mind when you think about
H&M? There are no right or wrong answers.

70
Q4 Below are 10 statements about H&M. Please indicate your agreement with them.
H&M is:
Strongly Disagree Somewhat Neither Somewhat Agree Strongly
Disagree (2) Disagree Agree nor Agree (5) (6) Agree (7)
(1) (3) Disagree
(4)
Luxurious
      
(1)
Modest (2)       
Glamorous
      
(3)
Leading (4)       
Exclusive
      
(5)
Down-to-
      
earth (6)
Casual (7)       
Accessible
      
(8)
Fast (9)       
Expensive
      
(10)

Q6 The following questions are about the brand Gucci, and your experiences with it.
I’ve had previous experiences with Gucci:
 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q7 I’m familiar with the brand Gucci

 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

---PAGE BREAK ---

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Gucci will work together with H&M, designing a collection available only in H&M stores
worldwide and in limited quantity online in the H&M webshop. The collection will
launch in February and will feature pieces for both men and women, at an affordable
price. Please take a look at the following poster ads, which are part of the promotion of
this collection:

---POSTERS ---

Q8 What are the thoughts and associations that come to mind when you think about
Gucci? There are no right or wrong answers.

Q9 Below are 10 statements about Gucci. Please indicate your agreement with them.
Gucci is:
Strongly Disagree Somewhat Neither Somewhat Agree Strongly
Disagree (2) Disagree Agree nor Agree (5) (6) Agree (7)
(1) (3) Disagree
(4)
Luxurious
      
(1)
Modest (2)       
Glamorous
      
(3)
Leading
      
(4)
Exclusive
      
(5)
Down-to-
      
earth (6)
Casual (7)       
Accessible
      
(8)
Fast (9)       
Expensive
      
(10)

Q10 Please answer the following statements. I feel the partnership between H&M and
Gucci is logical
 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)
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Q11 I feel the partnership between H&M and Gucci is complementary
 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q12 I would buy a product of the H&M and Gucci collaboration

 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q13 It is logical if this collaboration launches next year as well

 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q14 I would prefer a one-time collaboration over a structural one

 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q15 In conclusion, the following questions will ask about your perceptions about the
brand Gucci. Gucci's products are likely to be reliable
 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
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 Strongly Agree (7)

Q16 The quality of Gucci's products is high

 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q17 I expect high quality of a Gucci product

 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q18 It is likely that I would consider buying a Gucci product

 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q19 I would buy a Gucci product

 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q20 Fashion clothing is important to me

 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)

74
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q21 I feel I know a lot about fashion clothing

 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q22 I admire people who own expensive possessions (such as homes, cars and clothes)
 Strongly Disagree (1)
 Disagree (2)
 Somewhat Disagree (3)
 Neither Agree nor Disagree (4)
 Somewhat Agree (5)
 Agree (6)
 Strongly Agree (7)

Q23What is your gender?

 Male (1)
 Female (2)

Q24 What is your age?

Q25 What is your occupation?

 Student (1)
 Part-time employed (2)
 Full-time employed (3)
 Unemployed (4)

Q26 What is your monthly income? Please give an indication if you're unsure.

Q27 What is your e-mail address? (optional, if you want to enter for the prize)

Q28 If you have anything to add/comments/remarks, you can leave them below.
Thank you so much for filling in the survey!

75
 APPENDIX C: GUCCI WORD CLOUD

Before collaboration:

After collaboration:

76
 APPENDIX D: H&M, V&D WORD CLOUDS

H&M:

V&D:

77