Luxury for the Masses - DiVA portal [PDF]

Luxury for the Masses A Study of the H&M Luxury Collaborations with Focus on the Images of the Luxury Designer Brands

UPPSALA UNIVERSITY Department of Business Studies Bachelor Thesis Date: March 2010 Authors: Carole Ginman Charlotte Lundell Catherine Turek Supervisor: Nazeem Seyed-Mohamed

L uxury for the M asses

“The media is constantly redefining what luxury is. Luxury can be a dirty sock if dressed up the right way” Zac Posen

1

Luxury for the Masses

Executive Summary A strong brand is important for all companies; however, it is imperative for the success of a luxury fashion house as the image is one of its core assets. As strategic alliances are increasing in popularity the effect they have on how customers look at the partner brands is both interesting for the general person, but also – and more importantly – vital knowledge for companies pondering such a strategic move. The major focus of this study is to answer the question of how luxury designers’ collaborations with high street retailer Hennes & Mauritz affect how consumers perceive the luxury designer brand’s image. Theories on both brand extensions and co-branding have been compared to both qualitative and quantitative research conducted for the purpose of this investigation. This comparison has been made by using a model depicting the relationships between the collaborating brands. Through both acquiring a broad scope using the survey and deeper thoughts through focus group interviews the authors were able to gain a more holistic view of how people regard the luxury designer brands. The factors mainly investigated were those of change in awareness and change in purchase behaviour or intention, as they would be indicative of how people felt toward the luxury designer brands. The result of the investigation showed that the general perception of the luxury designer brands after the collaborations was positive with consumers in all segments. The collaboration did not cause a significant backlash on the regular luxury consumers, as the majority of this consumer segment also stated that they were not bothered by the collaborations. The collaborations could be seen as successful for the luxury designer brands as they managed to garner a lot of attention from new consumer groups, whilst at the same time managing to retain their regular customers. The reason found for not having had a negative impact on the brand was the way in which the collaborations were performed. That the brands had chosen a suitable partner where the perceived fit was great; that the associations with the collaboration and the partner brand did not infringe on the associations with the luxury designer brand; and the time frame of the collaboration, all meant that the consumers generally did not lose confidence in the luxury designer brands. Key Words: Brand Image, Brand Extensions, Co-Branding, Consumer Behaviour, Luxury Designer Brands, H&M

2

L uxury for the M asses

Sammanfattning Ett starkt varumärke är viktigt för alla företag; särskilt viktigt är det för lyxföretag inom mode då varumärke och image är essentiellt för dess framgång. Det faktum att strategiska företagsallianser blir allt mer vanligt förekommande ökar intresset för dess effekter på konsumenters uppfattning av respektive samarbetspartner. Detta är intressant, inte enbart generellt sett, utan också och kanske mer uppenbart, för företag som funderar på en sådan strategi. Det huvudsakliga syftet med följande studie är att undersöka hur samarbeten mellan lyxföretag inom mode och lågpriskedjan Hennes & Mauritz påverkar hur konsumenterna ser på lyxföretagens varumärken. Teorier som behandlar både brand extensions och co-branding har applicerats på både kvalitativ och kvantitativ data genomförd speciellt för denna studies syfte. Den kvantitativa undersökningen har givit denna studie en bred bas medan djupgående kommentarer från fokusgrupperna har försett författarna med en mer övergripande bild av hur konsumenter uppfattar lyxvarumärkena. Förändring i medvetenhet och köpvana, eller avsikt att köpa, är de faktorer som främst undersökts då dessa anses vara indikationer på konsumenters attityder gentemot lyxföretagens varumärken. Den generella uppfattningen av lyxföretagens varumärken efter samarbetet med Hennes & Mauritz var positivt inom alla kundsegment. Att samarbetet skulle kunnat slå negativt mot lyxföretagen – med hänsyn till hur de skulle mottas av lyxkonsumenterna – inträffade aldrig i en större utsträckning då majoriteten av detta segment uttryckte att samarbetet inte förändrade deras uppfattning. Samarbetena kan från företagens sida ses som framgångsrika då de lyckats väcka uppmärksamhet bland nya konsumenter samtidigt som de lyckats behålla sina lojala kunder. Den främsta anledningen till varför samarbetet inte har haft någon större negativ effekt på lyxföretagens varumärken är tack vare dess utformning och utförande. Att lyxföretagen allierat sig med Hennes & Mauritz – som matchar lyxföretagens image bra –har gjort att associationerna till samarbetet, och H&M, inte har stött sig med associationerna gentemot lyxvarumärket i sig. Generellt var alla konsumenter även överens om att samarbetenas korta tidsperiod var ytterligare en orsak till att de inte förlorade förtroende för lyxföretagen.

3

Luxury for the Masses

PREFACE

The authors have a strong interest for brand management and for the creation of strong brands. Further, they are greatly fascinated by luxury and the concept of image. The idea of combining these interests and fascinations led to the project of investigating how luxury brands – usually with strong brand images – can maintain this image when collaborating with a company who has a completely different brand identity. Researching this topic and exploring the phenomenon of brand extension and co-branding – as means of financial growth and strengthening brand image – in relation to luxury brands, allowed the authors to combine and deepen their knowledge of two of their greatest areas of interest.

Carole Ginman, Charlotte Lundell & Catherine Turek Uppsala, March 2010

©We, Carole Ginman, Charlotte Lundell and Catherine Turek, declare that the text and work presented in this Bachelor thesis is original and that no sources other than those mentioned in the text and its references have been used in creating this study. The copyright of the Bachelor thesis rests with the authors. The authors are responsible for all of its contents. University of Uppsala is only responsible for the educational coaching and beyond that cannot be held responsible for the content.

4

L uxury for the M asses

Contents 1. Challenges of the Changing Face of Luxury ......................................................................................................... 7 1.1 Aim and Research Question ............................................................................................................................. 9 1.2 Limitations to the Research Question............................................................................................................. 9 1.3 Outline................................................................................................................................................................10 2. Luxury Defined .......................................................................................................................................................10 3. What’s in a Brand? ..................................................................................................................................................10 3.1 The Value of a Brand.......................................................................................................................................10 3.2 The Importance of Congruence between Brand Identity and Brand Image ..........................................12 3.3 Consumer Behaviour, Brand Image and Luxury Brands ...........................................................................12 4. Growth and Expansion of the Luxury Brand ....................................................................................................14 4.1 Brand extensions ..............................................................................................................................................15 4.1.1 A hot topic but not a new concept ........................................................................................................15 4.1.2 Extension and the diffusion of brands..................................................................................................15 4.1.3 Brand extensions implemented successfully ........................................................................................15 4.1.4 Evaluation of brand extensions ..............................................................................................................16 4.1.5 Masstige ......................................................................................................................................................16 4.2 Co-branding.......................................................................................................................................................16 4.3 The H&M Luxury Collaborations Categorized ...........................................................................................18 5. Method......................................................................................................................................................................20 5.1 Choice of theory ...............................................................................................................................................21 5.2 Choice of method for research ......................................................................................................................22 5.2.1 Qualitative Research Process ..................................................................................................................23 5.2.2 Quantitative Research Process ...............................................................................................................24 5.2.3 Limitations to the primary research .......................................................................................................24 5.3 Using the acquired information .....................................................................................................................25 6. Research ....................................................................................................................................................................27 6.1 Objectives with the Collaborations ...........................................................................................................27 6.2 Focus Group Interviews .............................................................................................................................27 6.3 Survey Results...............................................................................................................................................30 7. Collaborations and the Luxury Brands – An Analysis ......................................................................................33 7.1 Luxury – a way of defining one’s self............................................................................................................33 7.2 A blurry brand image – cause for consumer identity crises? .....................................................................33 7.3 Collaborations – a way to increase awareness of the brand?.....................................................................34 7.4 The more aware one is the better one likes the brand? ..............................................................................36 7.5 Why? ...................................................................................................................................................................37 5

Luxury for the Masses 8. Discussion & Conclusion ......................................................................................................................................39 9. Relevance of thesis ..................................................................................................................................................40 10. Credibility and Suggestions for Future Research .............................................................................................40 11. Bibliography ...........................................................................................................................................................42 12. Appendices.............................................................................................................................................................46 12.1 Appendix I – H&M and luxury strategic alliances ..........................................................................................46 12.2 Appendix II – Maria Gemzell.........................................................................................................................47 12.3 Appendix III – Focus group topics ...................................................................................................................48 12.4 Appendix IV – Survey .....................................................................................................................................49 12.5 Appendix V – Survey Results ..........................................................................................................................53 12.6 Appendix VI – Cross references........................................................................................................................56

6

L uxury for the M asses

1. Challenges of the Changing Face of Luxury Luxury houses – and other companies alike – aim to increase their profits, and part of doing that is through growing. Growth, however, becomes a rather problematic issue when the company caters to a very slim segment such as the luxury market. However, times are a-changing in the luxury industry. The concept of luxury is shifting and is no longer as precise as it used to be. The luxury segment has become broader in recent years – ‘traditional luxury’ houses such as Chanel are now competing with ‘new luxury’ brands such as Jimmy Choo, and the evolution of the luxury segment has resulted in a wider span of what is now considered luxury (Truong, McColl and Kitchen, 2009). With this upsurge of ‘new luxury’ brands it is becoming increasingly important for luxury companies to differentiate themselves. From this, luxury brands are to a higher extent using new strategic moves, such as brand extensions and co-branding, to make sure that they stand out from the crowd to establish their brand in the minds of consumers. Extending their brand into more lines or diversifying into other categories, creating a wider potential customer base, is thus a way of managing this problem of increased competition. Further, it is a necessary evolution for brands through time, as a way for them to adapt to the current market climate (Kapferer, 2004: 171). However, not all luxury brands find creating a separate sub-brand a viable option, but instead embark on other similar projects of adapting to the market. The annual Hennes & Mauritz (H&M) luxury designer collaboration is such a project. Whereas luxury brands sometimes are reluctant to spend a lot of resources on starting a new permanent line or a long-term project with another company, a short-term collaboration with a well known retailer such as H&M is a new and alternative way for luxury brands to generate attention. The H&M luxury collaborations constitute a strategic way for firms to extend into new segments through a partner brand (Uggla, 2005: 10), a way for two brands to create a unique product (Leuthesser, Kohli and Suri, 2003). This kind of co-branding is more complex and has become increasingly popular with ‘new luxury’ brands in recent years, and designers as diverse as well-known Karl Lagerfeld in 2004 to fairly unknown Comme des Garçons in 2008, have created collections in collaboration with H&M (H&M, 2004) (H&M, 2008). The reason for this evolution and these new strategies amongst the luxury brands is that people, despite the current economic climate, are ‘trading up’. They are substituting some of their ordinary goods with luxury items (Darlington, 2004). This democratisation of what has traditionally been described as ‘top-of-the-range’ products constitutes a new market, somewhere in limbo between luxury and high street (the mass retailers competing for the same customers as 7

Luxury for the Masses H&M). It is a market with consumers who previously were reluctant to buy expensive products but that now have the opportunity to do so. This ‘limbo-land’, sometimes referred to as masstige, is proof of the increased importance people place on image and luxury. Thus, it offers vast opportunities and is important for marketers to understand (Truong, McColl and Kitchen, 2009) (Darlington, 2004). (Parment, 2006: 16) Luxury evokes feelings of uniqueness and exclusivity, and is characterised by products of high quality, controlled distribution and premium pricing (Okonkwo, 2009). The brand management strategies used by luxury managers are different from the strategies used by managers of more mainstream brands. This as it is important for luxury brands to strictly maintain the consistency between perceived prestige and price premiums and thus preserve their brand’s exclusivity. The desire factor of something – the want – is far more crucial for luxury brands than for high street or commodity brands. (Stegemann, 2006) Consequently, brand management is highly central to luxury companies. With this in mind, the democratisation of luxury begs the question - at what stage does a brand become attainable to so many people that it no longer represents luxury? At what point is the consistency between perceived prestige and price premiums affecting the want negatively? (Nueno and Quelch, 1998) When a luxury good is found everywhere it loses its exclusivity and becomes ordinary. Making a luxury brand attainable to the masses – through brand extension, co-branding or in other ways – may diminish the brand’s attractiveness to the regular customers of luxury (Pitt et al., 2009). Consumers buy brands that they identify with, but if the brand changes it may, crudely put, cause an identity crisis for the customer, and perhaps lead to him or her abandoning it for another more stable brand that they can identify with. Luxury companies thus face a dilemma as they try to deliver growth without compromising their brand’s promise and exclusivity (O'Donnell, 2009). “Tailing couture labels to the high street is tricky. It can open up a lucrative new market – or kill a brand.” (Hoesa, 2008)

Whereas research has been conducted upon the effects on parent brands in growth strategies, the results have varied. Some claim that luxury brands ‘lose their prestigious character when over diffused’ (Dubois and Paternault, 1995), whilst others maintain that the parent brands’ equity is unaffected or even improved when a collaborative brand is introduced (Washburn, Till and Priluck, 2000). Some research has been done focusing on H&M in the co-branding practice, 8

L uxury for the M asses however, there have been fewer articles published as to the impact on the luxury partner brands. The inconclusive results regarding the impact on parent brand image and the effects on the luxury brands is what interested the authors to write this paper. What are the objectives of the collaborations for the luxury designer brands? What trade-offs were made and how has the collaboration impacted how consumers view the brand? Do, for example, regular consumers of luxury goods feel cheated when products that they have bought at a high premium price become available to the masses for chump change under the same brand name? These are questions that will be discussed in this essay.

1.1 Aim and Research Question This study focuses on the brand image of a luxury designer brand, in relation to its collaboration with H&M – in the H&M luxury collaborations. It investigates how the consumers’ perceptions of the luxury designer brands’ respective images changes through a collaboration with high street retailer H&M, and by the associations connected to H&M and the collaboration itself. How do consumers feel about the luxury designer brand – is it still seen as luxurious or has the collaboration altered how consumers view it? This leads the authors to pose the question that is central to this paper. How does a collaboration with high street retailer H&M affect consumer perception of the luxury designer brand’s image?

1.2 Limitations to the Research Question This paper will deal exclusively with the impact that the H&M luxury collaborations have had on the luxury designer brands’ respective images, and thus not focus on how the H&M brand has fared. While the H&M collaboration is a communications device for the luxury designer brands in raising awareness and extending their reach, it is a relatively innovative and unconventional strategy. The authors will not focus on how the H&M luxury collaborations – as communications and marketing strategies – have been implemented, but will solely research the collaborations’ effects on consumer perception of the luxury designer brands. Also, the empirical research will be conducted in Sweden and conclusions will hence not be generalised to incorporate all countries in which the collaboration collections have been sold, but will solely account for the Swedish market. However, as the method used for sampling the data collection was haphazard sampling, the answers from the respondents could prove to be skewed. The authors are thus careful not to draw rash conclusions based on those results.

9

Luxury for the Masses

1.3 Outline The paper will begin with a brief definition of luxury, followed by a review of the concepts of brand equity, brand identity and image, as well as consumer behaviour. Brand equity describes what the value of a brand is, whereas the section on identity and image discusses the difference between the concepts and the importance that there is congruence between them. Consumer behaviour will explain the reasons for why people buy certain things in general and luxury in particular. Following this the growth strategies of brand extension and co-branding are explained, including risks and opportunities with such moves. Thereafter the H&M luxury collaborations are categorised in terms of which aspects of the growth theories are relevant to the collaborations. In the next section the methodology of the study is described, including motivations for choice of theory as well as how the empirical research was conducted. Also explained under this heading is how the empirical data will be used in answering the research question. Subsequently the empirical data will be presented and then analysed, before a conclusion is presented.

2. Luxury Defined Luxury is defined by something expensive and extravagant that is hard to obtain; an indulgence rather than a necessity (Corbellini and Saviolo, 2009: 19), and such items are known to provide consumers with extra pleasure compared to ordinary products, aiming to not only be functional but to flatter all senses at once (Stegemann, 2006). A definition of luxury and its six characteristics has been identified; excellent quality; very high price; scarcity and uniqueness; appealing aesthetics and polysensuality; ancestral heritage and personal history; and lastly the fact that luxury is excessive sometimes bordering on unnecessary. In other words, luxury is, in its traditional meaning something beautiful and appealing that is not available to everyone, either because of financial barriers or because it is made in a limited number. (Laurent, Dubois and Czellar, 2001)

3. What’s in a Brand? 3.1 The Value of a Brand It is difficult to counter arguments as to the importance of brands; without some kind of recognition of a company, what would consumers have to identify their products with? What would differentiate the company from the countless number of competitors? A brand is the intangible values associated with a product that differentiates it from other similar items and 10

L uxury for the M asses makes consumers choose this particular one in favour of the other selection (Ueltschy and Laroche, 2004). What differentiates a product from a similar product produced by another company is the value added by the brand, which is referred to as brand equity (Ueltschy and Laroche, 2004). Aaker defines it as follows: “Brand equity is a set of assets (and liabilities) linked to a brand’s name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm and/or that firm’s customers.” (Aaker, 2002: 8) These assets include the brand name awareness, to what extent customers are loyal to the brand, its perceived quality, and the associations that can be drawn to the brand (Aaker, 2002: 8). These are depicted in the figure below.

Brand Loyaly

Reduced marketing costs Trade leverage Anchor to other associations

Brand Awareness

BRAND EQUITY

Familiarity Reason to buy

Perceived Quality

Brand to be considered

Differentiation Price Extensions Help process/retrieve information

Brand Association s Other Proprietary Brand Assets

Create positive attitude Extensions Competitive Advantage

Figure 1 – Adapted from Aaker (2002)

11

Luxury for the Masses The degree to which each asset, brand loyalty, brand awareness, perceived quality, brand association and other proprietary brand assets, is important to the brand varies, and depends on what values it sees as most integral to their company. The process of branding thus incorporates developing and building the reputation of a brand name through a balancing act with the assets, enhancing the brand’s strong suits whereas trying to improve any eventual shortages in the asset categories. (Aaker, 2002: 8)

3.2 The Importance of Congruence between Brand Identity and Brand Image Brand image is essentially how the consumers perceive the brand identity. Whereas this might sound rather complicated, the simple way of explaining it is through stating that the brand identity is how the company sees itself, how it specifies its purpose, meaning and its self-image. The image is how the consumers receive and interpret this message. Everything from the products that the company produces, the people that are associated with the brand, the places where the brand is seen and the communications it uses are all signals upon which consumers create an image of what the company is. A common misconception when it comes to these two concepts is that they are one and the same. However, as has just been shown, identity should be clearly formed within the company and emanate through all channels the company chooses to utilise, whereas the signals are there for consumers to freely create an image of how they perceive the company. Consequentially, it is imperative for the company that the brand’s assets are managed in such a way that the image that consumers construe is in line with the company’s perception of itself. (Kapferer, 2004: 98-99) The brand image is an important resource as it gauges how consumers feel about a company, and hence also the likelihood of them purchasing its products. The brand itself can contribute to gaining a competitive advantage. Image has a lot to do with brand equity, as it is the combined result of how consumers react to how companies manage their assets. As previously mentioned, the importance of each asset varies between different companies. For this particular investigation, all of the assets of brand equity will be investigated, but each to a varying extent. (Stegemann, 2006)

3.3 Consumer Behaviour, Brand Image and Luxury Brands Consumers purchase luxury goods for their symbolic value (Grubb and Grathwohl, 1967) and to satisfy their hedonic needs (Solomon, 2007: 79). Abraham Maslow has developed a framework for how people categorize their needs, from the most basic needs such as food and water to the need to satisfy their ego and their self (Solomon, 2007: 82-83). As an example, before aiming to 12

L uxury for the M asses satisfy the need for, for instance, a new car, people need to ensure that they have a safe place to stay. In other words, even though consumers may want something self-fulfilling they make sure that they have covered their basic needs first before pursuing the wants. Maslow’s hierarchy of needs ranges from psychological, safety, and belongingness to ego needs and the need for selfactualisation. Central to this study, belongingness needs signifies the sense of seeking love and affection and acceptance by others, whereas ego needs relate to the fact that people want things that are somehow prestigious and can show status and accomplishment (Solomon, 2007: 126127). Consumer behaviour is thus in part related to the consumer’s self-concept, which represents a principal value around which the consumer lives. The self-concept is how the person sees him- or herself and is something that he or she constantly works to maintain and make more valuable, which also makes it something that the consumer wants to protect (Grubb and Grathwohl, 1967). In the current materialistic society, people are placing an increasing amount of value in their possessions and satisfying the ego needs described by Maslow. Hence, consuming luxury goods is a way to increase the value of the self in regards to a person’s surroundings. This kind of status consumption is evident in all parts of society; both the wealthy and people with less means are attracted by status symbols and seek to purchase such brands (O'Cass and McEwen, 2004). As mentioned earlier, the perceived brand image of a company influences a consumer’s decision to purchase a product from a certain brand (Nueno and Quelch, 1998). Image is perhaps more important for luxury brands than for other sorts of brands, as it – with all its intangible components – is an implicit part of the luxury product (Kapferer and Bastien, 2009: 116). These intangibles, connected to the brand name, are key to the luxury brands’ profitability (Kapferer and Bastien, 2009: 120). The luxury brand provides consumers with a self-concept and sets itself apart from other brands, not only through the high price, but also with culturally accepted attributes that make it acceptable as a social stratifier (Kapferer and Bastien, 2009: 117) (Nueno and Quelch, 1998). The brand image conveys information of the owner’s identity; consumers of luxury do not only purchase an item, but also an image – in essence, they purchase a statement (Kapferer and Bastien, 2009: 120). ‘Luxury is access to a dream’. (Kapferer and Bastien, 2009: 128) This dream is based on two factors: awareness and purchase. Speaking of the former, the luxury brand must be known and recognised in order to be desired. For instance, there are numerous young designers who may not be highly desired as consumers are not aware of their existence (Dubois and Paternault, 1995). Regarding the latter, the other factor influencing the dream is the number of wearers of 13

Luxury for the Masses the brand in relation to the number of aware consumers. Too many people purchasing and owning the brand leads to brand diffusion, effectively killing the dream by eliminating the brand’s exclusivity and social status. If the brand seems attainable to the masses it loses in exclusivity, which provides less incentive for customers to purchase it to strengthen the self-concept. (Kapferer and Bastien, 2009: 129) A luxury brand is differentiated from other regular brands through the inspiring and aspirational aspects that characterise luxury (Kapferer and Bastien, 2009: 127). Despite this relatively confining stipulation there is nothing saying that there is no room for change within the luxury dream. The luxury brand must also be allowed to develop along with the market and not be hindered from reinventing and renewing itself. In other words, the luxury brand must ensure that it maintains traditional customers while at the same time focus on attracting new customers and making sure that it does not become obsolete in the current market climate. In fact, brands on the luxury market have most often grown by moving out of their original field (Kapferer and Bastien, 2009: 137). A popular strategy or marketing approach to maintain the brand’s status while still attracting new customers is through the more frequently seen collaborations between luxury brands and a high street fashion brand. While these collaborations create awareness they also incorporate the threat of the brand becoming too widespread. Brand ubiquity must be dealt with in order for the brand not to lose its lustre and attractiveness, or dilute the image upon which the luxury brand is so heavily dependent (Berthon et al., 2009).

4. Growth and Expansion of the Luxury Brand The focus on brands and their intangible values has increased as consumers have become more interested in the signals that the products they purchase convey – as a means to differentiate themselves and express their identity and lifestyle (Parment, 2006: 16). At the same time and partly due to this, the demand for luxury goods and services has increased. Apart from the dip of the previous years due to the financial crisis, the global luxury industry has grown at a pace of nearly 15 percent since 2003 (Cavender and Rein, 2009) (Cheong and Phau, 2003). Over the past decade luxury has been the fastest growing market in many countries world-wide, the explanation to this growth is based on the changes in consumer behaviour, trends and tastes (Cavender and Rein, 2009). However, luxury brands are not only growing within their original consumer base, they are now internationalizing their brands as well as broadening their appeal to target other segments (Cheong and Phau, 2003). Brand extensions and co-branding are both strategies used for widening a brand’s reach and therefore relevant for this study, and are discussed below. 14

L uxury for the M asses 4.1 Brand extensions 4.1.1 A hot topic but not a new concept

Brand extension is not a new concept; it is at the core of the luxury brand model, and a result of companies striving for growth and profitability on mature markets. They are strategic moves where businesses stretch beyond their original comfort zone and partake in new activities under the same brand name. Most companies, even ones that were reluctant initially, have engaged in brand extensions today (Kapferer, 2008: 295). The research on brand extension has partly focused on the consumers’ perception of brand extensions – would the extension concept be appealing to them? Another area of research is whether or not the brand equity would be diluted by an extension through the extension’s failure to preserve the ‘brand contract’ (Kapferer, 2008: 317). 4.1.2 Extension and the diffusion of brands

Brands can extend vertically in two directions, either upwards (toward higher price and quality) or downwards (toward lower price and quality) (Pitta and Prevel Katsanis, 1995). Downward extension – diffusion brands – aspire to create a connection with the luxurious parent brand, whilst the same time as providing other segments with more economical alternatives to satisfy their desire toward status consumption (Aaker and Keller, 1990) (Cheong and Phau, 2003). Stretching a brand downwards always incorporates the risk of a negative impact on the brand image, weakening it and simultaneously making it less exclusive (Parment, 2006: 177). 4.1.3 Brand extensions implemented successfully

There are several factors impacting whether a brand extension will be successful or not, out of which the most frequently discussed are quality and perceived fit. How consumers view an extension is influenced by the quality of the original brand and the perceived fit of the new extension. (Kapferer, 2004: 258) Whereas Kapferer (2008) states that it is unwise to attempt a brand extension if the parent brand does not have a reputation of quality, perceived fit is perhaps most important (Martinez, Polo and de Chernatony, 2008) (Kapferer, 2008: 320). The fit is a measurement of the psychological gap between the extension and the brand’s typical product (Kim and Roedder John, 2008). This fit can, for instance, be based on whether the product is in the same product category as the parent brand or if it is intended to complement other products under the brand (Cheong and Phau, 2003). Another dimension of fit appropriate for the present research is that of brand image fit; explained as the similarity between the image of the parent brand and its extension (Grime, Diamantopoulos and Smith, 2002). Cheung et. al. (2003) state that ‘consumers respond more favourably if they are able to perceive a fit between the extension and the parent brand’. 15

Luxury for the Masses 4.1.4 Evaluation of brand extensions

When extending a brand, companies face the risk of diluting the brand image. The brand image is, as mentioned previously, one of the luxury brand’s core assets. Thus, an extension leading to a possible change in consumers’ beliefs and associations with the brand makes such an action especially hazardous for luxury brands (Kapferer, 2004: 264-265). To prevent a breach in the brand contract, caution must be paid to the attributes and feelings associated with the extended product (Kapferer, 2008: 317) (Cheong and Phau, 2003) (Martinez, Polo and de Chernatony, 2008). These risks must, however, be weighed against the opportunities that a broader customer base would compose. The decision of stretching the brand or not must be based on a long term vision. This becomes an issue as no study can anticipate the future and because it is dependent on how successful a company is in implementing the extension. (Parment, 2006: 179) Therefore, arguments that brand extensions are either always good or always bad are oversimplifications of a complex concept that is dependent on context. In other words, there are both risks and opportunities associated with brand extension, and these depend on the situation. (Buday, 1989) 4.1.5 Masstige

A new area of research within brand extension is that of masstige, the term that describes downward luxury extensions. It is viewed as an innovative strategy to position a prestige brand with a broad appeal without diluting the brand (Truong, McColl and Kitchen, 2009). Truong et. al. (2009) mean that brands adopting a stance between luxury and high street fashion can be classified as masstige, whereas other authors argue that masstige is a phenomenon by which luxury and designers collaborate with high street stores while still maintaining their usual business (Andal-Ancion, Coyle and French, 2010). One can say that masstige is an attempt to offer prestigious brands at relatively low prices. Masstige has grown out of the trend of trading-up, where consumers switch some of their purchases from normal products to something more exclusive (Darlington, 2004) (Silverstein and Fiske, 2003).

4.2 Co-branding Whereas brand extensions involve developing new products or new lines under the same parent brand, co-branding joins two separate well-known brands together for a unique, collaborative project (Leuthesser, Kohli and Suri, 2003) (Ueltschy and Laroche, 2004). Brand extensions imply a transfer of meaning of a brand from one category to another, while a brand alliance combines and elaborates associations from the collaborating brands with the associations derived from the collaboration (Uggla, 2004). Strategic alliances between brands have become increasingly popular 16

L uxury for the M asses as they offer an innovative way of boosting effectiveness of the marketing spend, as well as enhancing the speed of the cash flows and ultimately creating shareholder value (Uggla, 2004). They are seen as a way to gain a competitive edge over other companies, and recognise that the public’s knowledge of an alliance can be added value (Kapferer, 2004: 92). Uggla (2004) states that the ‘essence of co-branding is that both partners gain access to the other’s customer base’. As previously mentioned there are obviously financial incentives, but it may also be a way for partner brands to extend downstream into new categories, creating depth to its brand personality (Uggla, 2004). There are several ways in which strategic brand alliances may be formed; however, the most prominent are through ingredient co-branding or composite co-branding (Uggla, 2005) (Aaker, 2002: 298-299). Ingredient co-branding refers to collaborations in which one brand is an additive to an already existing brand (Aaker, 2002: 298), such as adding Daim into a McFlurry ice cream at McDonalds. Composite co-branding, however, is a more symmetrical way of merging brands as it divides both the burden of production and the reward more equally between the collaborating brands (Uggla, 2005: 9) (Aaker, 2002: 299). These two constitute the highest levels of shared value creation in co-branding, whereas co-branding for reach and awareness – where a brand increases awareness by gaining access to the partner’s customer base – generates the lowest level of value (Leuthesser, Kohli and Suri, 2003) (Uggla, 2004). However, all the mentioned ways of collaborating involve leveraging a brand to another (Uggla, 2004). When a brand links to a partner, the knowledge a customer has of the brand changes. The brand image that consumers form is now built upon several factors rather than just the original brand, including the collaboration and the partner brand. (Uggla, 2004) Co-branding actually places some important characteristics, such as image, in the hands of the partner brand (Leuthesser, Kohli and Suri, 2003), which makes it a risky move as the original brand is partly relinquishing control over its identity. Therefore it is important to ally with a strong reputable brand, rather than a company with a less than satisfactory one, simply to enter a certain category or market (Uggla, 2004). In general, brands with a low recognisability benefit from co-branding, which makes co-branding an alternative for entry into a particular market in which the brand previously has not been present (Baumgarth, 2004). Furthermore, well respected and powerful brands have relatively little to lose as high equity brands are seemingly unaffected by co-branding with low equity brands (Leuthesser, Kohli and Suri, 2003). As in brand extension research, co-branding also focuses on the importance of the perceived fit of the parent brands in the collaboration (Leuthesser, Kohli and Suri, 2003) (Uggla, 2004) (Aaker and Keller, 1990) (Grime, Diamantopoulos and Smith, 2002) (Czellar, 2003). Uggla 17

Luxury for the Masses (2004) states that ‘fit refers to the psychological congruency between two brands’, and claims that the success of a co-branding endeavour relies on the fit between the two parent companies, as well as the fit between the parent companies and the new product. Thus it is imperative for the success of the co-branding project that the fit between the partnering parties is deemed positive. If two incompatible brands collaborate it can lead to disaster for one or maybe both brands, as the respective brand identities may erode and in turn result in confused positioning (Uggla, 2004). Perceptions of a collaborative product may have secondary effects on the parent brands, called ‘spill over effects’, although not to the same extent that line or brand extensions would as they are more intricately connected to the brand (Leuthesser, Kohli and Suri, 2003) (Votolato and Unnava, 2006). Thus, there is a risk that the associations toward the collaboration affect how consumers view the parent brands. Also, the associations of the parent brands can inadvertently have implications on their partner’s respective image. Moreover, there is a considerable risk that the associations of a previous partner of one of the brands could affect the new partner (Uggla, 2004).

4.3 The H&M Luxury Collaborations Categorized The H&M luxury collaborations between the high street retailer and various luxury designer brands is a peculiar case of strategic brand alliance, as they are not a typical case of brand extension, nor a typical case of co-branding. Although they include elements pertaining to these theories, the collaborations are short term projects whilst both brand extensions and composite branding are long term projects; thus the collaborations are seemingly something other than a simple a mix of these strategies (Leuthesser, Kohli and Suri, 2003).

18

L uxury for the M asses

DOWNWARD BRAND EXTENSION (Masstige)

CO-BRANDING between the Luxury Designer Brand and H&M

of the Luxury Designer Brand

H&M LUXURY COLLABORATION Research on the collaborations’ effects on consumers’ perception of the luxury designer brands in collaboration with H&M

CONSUMER PERCEPTION (Primary research – focus groups and survey) Based on the variables; opinion (awareness and associations towards the H&M Luxury Collaborations), behaviour (consumers’ intentions to purchase from the collaborations) and attribute (information regarding the consumer him- or herself)

BRAND IMAGE of the Luxury Designer Brand

Figure 2 Association Model

This model describes where the H&M luxury collaborations are situated on the map of possible growth opportunities, and works as a point of reference for understanding the nature of the collaborations and how they influence the brands’ respective images.

19

Luxury for the Masses The luxury designer brand can extend upwards (to higher price and quality) or downwards (to lower price and quality), engaging in the market of masstige as Truong et. al. (2009) define it. The model depicts that in the case of the H&M luxury collaborations the luxury designer brands select to aim downwards towards the masses. However, the H&M luxury collaborations do not entirely fit under this heading, as they are short term, and because two brands combine together to create the collection. That is why another area of growth needs to be taken into account – co-branding. In the previous section, the concept of co-branding was used to describe how two brands join together to produce a unique product. Again, this is usually a long term approach and the H&M luxury collaborations are ‘one-offs’, typically a single collection. With this in mind, and as there is no known previous categorisation of the relationship between these variables, the model presented in this paper combines theory from both the extension and co-branding literature. It places the H&M luxury collaborations in their own separate category related to both the previously mentioned theories. Thus, the collaboration is, as depicted in the model, a result of the luxury brand stretching downwards and jointly with another brand – in this particular study H&M – developing a new line. Since this study aims to investigate how these particular strategic alliances influence the consumers’ perception of the luxury designer brands, research on how the collaborations have affected the consumers’ perceptions of the brands is conducted through a survey and six focus groups. This research is based on three variables – opinion, behaviour and attribute – through which consumer perception of the luxury designer brands’ respective images is appreciated.

5. Method Three types of data variables were taken into account in order to operationalise the research question – opinion, behaviour and attribute (Saunders, Lewis and Thornhill, 2009: 368). Opinion refers to how people feel about something, their opinions and attitudes towards the luxury designer brands, H&M and the collaboration itself; behavioural variables describe how people act in relation to the posed question and these are based on consumers’ awareness, associations and intentions to purchase from the H&M luxury collaborations and the luxury designer brand – before and after the collaborations; and attribute refer to the respondents’ characteristics, such as if they regularly buy mass-market or luxury clothing items, or a mixture of both (Saunders, Lewis and Thornhill, 2009: 368). Perception is a rather complex concept to measure; rather, it must be appreciated in reference to a solid base of information. Together, the above presented variables enable such an appreciation of the perception the consumers have of the luxury designer brands.

20

L uxury for the M asses 5.1 Choice of theory At this stage it might be worth repeating the purpose of the investigation, which is to see how collaborations with high street retailers affect consumer perception of the luxury designer brand. The authors have continuously reflected over their ideas and the literature researched throughout the study to make the topic more precise. This has meant that the different stages in the literature research were revised spirally, thus offering insight in what information was indeed relevant for the topic (Saunders, Lewis and Thornhill, 2009: 60). As previously explained, in the search for appropriate literature to approach the topic investigated in this study, the authors found that there were no theories explicitly applicable to the question. The theories found only partly defined the luxury designer collaborations with H&M – the theories could be applied to the case but there was no single concept that singlehandedly explained the phenomenon. Thus, parts of different theories providing a good base for analysis were combined to construct a new framework, from which the authors could examine the collaborations and put them in a context. A broad range of literature and academic articles regarding luxury in general, brand image, consumer behaviour et cetera, have been examined in order to gain an understanding of the nature of the collaborations and their purpose, an understanding of how luxury on the one hand and high street fashion on the other is perceived, and how these collaborations could possibly affect the luxury designer brands’ respective images. While all the acquired information has not been cited in the study, it has constituted a sound base for the authors, and thus both read and referenced articles are included in the bibliography. Several articles in this area of research reference each other which in turn lead the authors’ to use some more extensively than others. Further, case specific information was secured through contact with Maria Gemzell who is in charge of the collaborations at H&M through an email interview (see appendix II for acquired information). This information gave the authors a deeper understanding of the nature of the collaborations and will be presented below to illustrate the case. The abundance of information enabled the authors to evaluate what was most relevant and valuable for the topic, and these were chosen to approach the study efficiently. (Saunders, Lewis and Thornhill, 2009: 349-351) While numerous articles have been useful during the research process, one of the authors whose work has been greatly influential for the purpose of this investigation is Jean-Nöel Kapferer, who has both written books and published several articles regarding the concept of luxury brand management. He has investigated the nature of luxury brands and the factors that distinguish them from other brands, as well as discussed the topic of extending the luxury brand. The importance of brand image is something that he underlines in his work and is something that the authors find important for the current research question. Kapferer’s seemingly extensive 21

Luxury for the Masses knowledge within the area of luxury brand management makes his work a reliable point of reference. However, whereas this has been an excellent base upon which to begin, the topic studied in this paper is more complex than simply ‘luxury brand extensions’ and ‘luxury brand management’ which is why also, in particular Henrik Uggla’s, research on co-branding has affected the course of the investigation. He delved into the realm of brand associations and the spill-over effect of partner brands upon each other, although not explicitly for luxury brands. His model for a brand association base has been greatly influential in the authors constructing the model applied to the particular circumstances of the H&M luxury collaborations. Also of critical importance to the investigation is the research on consumer behaviour, as the research question asks how consumer perception is affected by the collaboration. Obviously there are two parts to the question, one – how do consumers react when a brand stretches downwards, and two – how do they feel when the brand allies with another brand? These topics are greatly embedded in psychology research, which is why the authors have chosen to look deeper into the area of the self and construction of a self-image, as well as considering the consumer needs as described by Maslow. Using these concepts enables the authors to investigate the research question, whether collaborations with high street retailers affect consumers’ perception of the original luxury designer brand. The complexity of luxury brands is described by the theory on luxury designer brand management, and is, combined with the theories on brand growth, a cornerstone of the collaborations between high and low. To analyse the perception of the luxury designer brand image is another concept that is important for the study and how it is valued by consumers, which leads to the significant role of consumer behaviour. How will consumers react to the collaborations? Will the luxury designer brand still constitute a consumer need on Maslow’s ego level or has it become sullied by its association with H&M?

5.2 Choice of method for research To get an accurate appreciation of how consumers perceive brand image the authors have decided to conduct both qualitative and quantitative primary research, through focus groups and a survey respectively, so to get a wide grasp of the consumers’ thoughts on the luxury brands. As the subject of this study is relatively innovative there are no known previous investigations, and hence not anything to compare it to, which is why the authors have had to rely solely on their own research. Therefore it has been imperative to do as much and as wide research as possible under this limited period of time, for which reason the authors chose to not only to use focus 22

L uxury for the M asses groups but to complement their qualitative research with a survey. The qualitative research will in the analysis provide depth to the answers, whereas the quantitative data offers valuable information that will be relied upon for the broader scope. An account of the process of both the quantitative and the qualitative follows below. 5.2.1 Qualitative Research Process

The primary method for data collection was through focus groups. Focus group research is in essence group based interviews in which the researcher is intended to moderate a group discussion rather than participate actively him- or herself (Omni Institute, 2010). This method was chosen due to the ability to get deeper and more developed answers from participants as to their views on luxury brands and the implication its association with H&M has on brand image. The number of focus groups used for the qualitative study, and the constitution of these, was planned in order to obtain a higher degree of more complete answers from different individuals. In all, there were five focus groups assembled with regard to age, as the authors believed that it would be easier for the participants to have a deeper and more interactive discussion if they were not intimidated by others in the group. As there were financial and also manpower constraints, it was decided that the focus groups should be relatively small, consisting of five to six participants in each, and that each session would last only an hour. (Saunders, Lewis and Thornhill, 2009: 342) Within these groups there was a mix of gender and income level. Divided according to age, the five focus groups covered: Group

Age Group (years old)

Number of Participants

1

50

6

For each focus groups one of the authors acted as moderator whilst the other two were assigned the task of taking notes. The moderator was in charge of leading the discussion without actively interfering, equipped with a number of pre-prepared questions, acting in accordance with guidelines of conducting focus groups. However, not interfering in the discussion has been an ethical dilemma when conversation stalled. This was solved through introducing new topics or, albeit not ideal, conjuring examples with which participants could relate. (Saunders, Lewis and Thornhill, 2009: 343-347) 23

Luxury for the Masses The topics intended for discussion were initially made to match the questions in the quantitative research; however, with the focus groups there is the possibility to inquire more about associations to both luxury and the collaborations, as well as to H&M. Also, topics that the moderator introduced included ‘who buys, and why do people buy luxury’, with a focus on consumer behaviour. Without asking leading questions (so as to not bias the result) the participants were in the end of each focus group led to answer whether or not they believed that the luxury designer brands’ association to H&M had impacted their image. (The general topics for the discussion can be found in appendix III). 5.2.2 Quantitative Research Process

The quantitative research consisted of a questionnaire, and the purpose for this was to collect and cover a wide range of consumers’ perception and attitudes towards luxury, brand image and the luxury designer collections for H&M. In constructing the survey the three types of data variables that were mentioned above were taken into account – opinion, behaviour and attribute (Saunders, Lewis and Thornhill, 2009: 368). Both open questions, in which respondents could write their own answers, and closed questions were used. The closed questions were designed such that the respondents could answer by choosing from mutually exclusive categories covering all possible responses (Saunders, Lewis and Thornhill, 2009: 378). An important issue when creating the questionnaire was to make it approachable, with an easy flow and a logical order to the questions to make it easy for respondents to complete. Filtering questions are questions that eliminates part of the responding population through asking, for example, ‘have you bought luxury items’ followed by ‘if yes, please state why.’ These were used in order to only obtain answers from respondents that could actually provide insightful information. The layout of the survey was created with respect to the topic of the study and the respondents alike, making it attractive, encouraging and not too long (Saunders, Lewis and Thornhill, 2009: 307). The first section of the survey treats the general questions of age, gender and income, followed by questions regarding the respondent’s relationship to fashion to give the authors a general idea of how high on the hierarchy of needs consumers placed fashion. Part three included questions about H&M and the H&M luxury collaborations in order to see whether the general goal of the companies’ project had succeeded and whether it had affected consumers’ relationship to the luxury designer brands. (See appendix IV for complete survey) The method used to obtain respondents was haphazard (or convenience) sampling and the final survey was distributed through a social networking website. The collection of replies continued until the required sample size had been reached (Saunders, Lewis and Thornhill, 2009:

24

L uxury for the M asses 241); in this case 379 respondents, which is considered both representative and accurate in regard to the total population (Saunders, Lewis and Thornhill, 2009: 219). 5.2.3 Limitations to the primary research

Regarding the focus groups, the authors are aware that there is a slightly larger number of young participants compared to the other age groups, which could skew the results. However, this may prove to be beneficial for the study as these consumers constitute the luxury designer brands’ future client base and is why their opinions would be valuable knowledge for luxury designer brands contemplating a collaboration. In the survey, while filtering questions were used in order to obtain replies from the right respondents to the right questions, the results showed that these were not fully successful. Some respondents proved to answer questions that they, through their response to the filter questions, should not have. This has been taken into account in the analysis of the information. Further, in retrospect the exclusion of an indecisive alternative may have caused some respondents to submit unrepresentative answers. (Saunders, Lewis and Thornhill, 2009: 219) Also, the authors are aware that convenience sampling is prone to provide results that are sometimes biased and that generalisations made upon such results are likely to be flawed (Saunders, Lewis and Thornhill, 2009: 241). However, the technique and sample size chosen were deemed acceptable due to the time constraints of the investigation as well as the financial resources available at the authors’ disposal (Saunders, Lewis and Thornhill, 2009: 243).

5.3 Using the acquired information For the analysis, the survey questions were used as a basis for getting an overview of the consumers; the general age, income and gender, as well as how much value they place in fashion. Also, answers to chosen survey questions were cross-referenced in order to gain a deeper understanding of which consumers behaved in which way. A key variable upon which a large part of the analysis is based is what kind of fashion people purchase, thus dividing consumers into segments based on their purchase behaviour (mass-market consumers, luxury consumers as well as a group who buys both). This provides the authors with insightful information on the behaviour of each segment in connection to the collaborations, which in turn enables a more thorough discussion on the effects that the strategic alliances have had on how consumers view the luxury designer brands. More importantly, it shows which consumers view the brands in what way; providing information to the authors as well as prospective allies of H&M on how different consumer groups react to such projects.

25

Luxury for the Masses Looking at how different consumer segments – luxury and mass customers respectively, as well as the customers of both – perceive the collaborations, gives the analysis more depth and allows for a deeper understanding. It is essential to learn both what traditional consumers of the luxury designer brand think – in preventing alienation of this segment – as well as how other consumers see the brands, as they are the future potential customers. Analysing the consumers both as a general mass prevents information of how the respective segments feel about the issue, which makes it more difficult to make an accurate judgement. Other key issues approached by the quantitative research are those of whether the collaborations have affected awareness of the luxury designer brands, and if this has impacted their purchase behaviour. Knowing about people’s purchase behaviour is telling of their opinion and perception of a brand as people assumedly buy things that appeal to them and not the other way around. Which consumers segments were aware or unaware of the luxury designer brands prior to the collaboration? Of these, for which segments was the level of awareness changed? And, which consumers developed an intention to purchase from the collaborations or the original lines of the luxury designer brands? Posing these questions presents an idea of the consumers’ relationships and feelings toward the collaboration, and through that also the luxury designer brands. This leads in to how their perceptions of the collaborations (and also the perception of the partner brand) impact the image of the luxury designer brands. The results from the focus groups generated another type of answers compared to the response from the quantitative research. Whereas the survey respondents were asked to answer closed questions easy to cross reference, the focus groups gave more reasoned answers where they could elaborate more on their thoughts. Thus, while the results of the survey describes the situation and can be analysed using the relevant theory, the ideas uttered in the qualitative research also enabled a discussion as to why things were the way they were. Using both quantitative and qualitative data thus gave the research a more comprehensive approach, which could be utilised to answer both if perception had been change, but also why the result turned out the way it had.

26

L uxury for the M asses

6. Research This section displays the results of the primary research from the focus groups and the survey. 6.1 Objectives with the Collaborations According to Maria Gemzell the objective with the H&M luxury collaborations, for H&M and the luxury designer brands respectively, is to offer exclusive fashion at a good price and to reach new consumer groups. The collaboration creates a new marketing channel for the luxury designer brands and thus increases awareness of the brand with H&M’s customer base. Criteria for choosing a guest designer includes looking at designers who could emphasize the trend that H&M wants to highlight for the season in question, but also not to pick a designer that is too similar to one of the previous collaborators. 6.2 Focus Group Interviews 6.2.1 Associations with H&M

When asked about their feelings toward H&M, the interviewees were quite unanimous in their response that the retailer connotes something that is popular, that they have a wide selection of clothes and styles ranging from basic clothing to more fashionable trends. One participant noted that ‘H&M is succeeding in attracting all kinds of customers without putting others off’ . H&M clothes are perceived as inexpensive and attainable for everyone, enabling consumers to renew their wardrobe regularly. Some participants had doubts regarding the quality of H&M clothes, ‘Divided (H&Ms youth line) has bad quality products’ and ‘you don’t buy your fancy clothes at H&M’, however, most participants were in consensus that the quality has vastly improved in later years. 6.2.2 Luxury – What is it and who buys it?

The participants identified several characteristics of luxury; out of which high price was rather indicative of the level of exclusivity. One interviewee responded by saying that ‘Chanel, Stella McCartney, they are luxury whereas (Swedish brands) Acne and Dagmar are not. Luxury are the really big brands’, thus separating some rather expensive – for the regular person – stores from her perception of luxury designer brands. The participants agreed that luxury comes in limited editions, ensuring that it is not available for everyone. One person also said that ‘luxury is not the actual product, but the things around the product – for example, the service and the store’. Most participants also expect nicer materials and a high level of quality, however, one interviewee noted that ‘you buy luxury for your self-image – you don’t consider quality’, and another person added that ‘you like the brand more than the product, you like what the brand 27

Luxury for the Masses symbolises’. According to the participants, reasons for buying luxury revolve around ‘making a statement’, or ‘fitting in with a typical crowd’. Another point made by one interviewee was that ‘if you have a lot of money you would buy more expensive things’. 6.2.3 Views on Collaborations between H&M and Luxury Brands

Several people pointed to the fact that the collaborations ‘generate a lot of publicity’, and ‘increases awareness and strengthens the luxury partner, for example, Stella McCartney’, while another reiterates that ‘the probability of going out to look at the luxury designer’s original line is higher after the collaboration’. The collaborations were in general received positively by the participants in the focus groups, who considered it a ‘fun project’ and thought it was positive for the general public. However, some also questioned whether it was equally positive for the regular purchasers of the luxury brand, because ‘the brand itself matters a lot to them’. While some interviewees stated that ‘you lose confidence in the luxury brand if it pursues a collaborative line with H&M’ others were of the opinion that ‘the image of the brand has not changed after the collaboration since it is not representative of the luxury brand’s main line’. This was agreed upon by most of the participants, that there is a distinguishable difference between the collection designed specifically for H&M and the brands’ respective original collections: ‘there’s a difference between buying Viktor & Rolf and buying Viktor & Rolf for H&M’. They state that the collaborative lines are ‘not luxury, but still a bit of the designer’, and that they are more the ‘designer’s interpretation of H&M’, thus not giving them the ‘same feeling wearing collaborative clothes rather than the real luxury line’. An important factor for the majority of the participants seemed to be that the collaborations were solitary collections. Many stated that the fact that it was a ‘limited edition collection over a short period of time’ gave the collaboration more of a promotional value, creating the hype that surrounds the collections every year. A lengthier collaboration would diminish these effects and subsequently harm the brand image. Also, the choice of partner was a factor brought up by several of the interviewees. They claimed that if a luxury brand collaborated with another high street store than H&M (mentioned examples were Swedish retailers Lindex or KappAhl) the luxury designer brand’s image might be affected in a more negative way. The choice of partner is important for the luxury designer brands if they choose to ally with another brand. In the words of one participant, ‘H&M is definitely not luxury, but the retailer’s fashionable and increasingly trendy image makes it a good match to the luxury designer brands. It is interesting to see these collaborations – where two strong, successful brands and creators of fashion from two different ‘levels’ are combined into one collection’. The topic of whether the

28

L uxury for the M asses luxury designer brands could affect each other through their association to H&M also arose, and some stated that the mutual association could work in a levelling way. One topic that generated a lot of discussion was that of whether the luxury designer brand had sold itself for profit. The participants had differing opinions on the subject, which led to a classification of different levels of luxury. They said that it would be strange if a house such as Louis Vuitton or Chanel worked with H&M, however, that newer luxury designer brands fit the concept of collaboration better. One participant said that ‘collaborations don’t fit all brands simply because a few may get away with it. Comme des Garçons, for example, attracts playful and creative customers who may shop at H&M in other instances and would not be averse to a collaboration, however, if a brand such as Hermès chose to collaborate with H&M one would definitely ask oneself why’. Another issue that was brought up was that of whether the participants had bought items from the collaborations, which relatively few participants in the focus groups had done. The reason given for many in the young adult segment not purchasing collaborations was that they would rather spend a little more money and get a designer’s original line of a less luxurious brand, rather than the collaborative product of a luxurious brand and H&M – ‘I would rather buy a suit at Tiger (of Sweden) for 5000 SEK than a Roberto Cavalli suit from H&M for 3000 SEK’. They also stated that if they were to buy an item from the collaboration it was because of the fit or the cut, not because it bore a luxurious brand name. This was not mirrored in the younger segment, where the a participants had lined up outside H&M on the day of the release to stock up on as many items as possible ‘because it was Jimmy Choo’. Finally, the participants gathered that consumers, who previously held a negative attitude towards luxury, might have come to hold more positive connotations to such brands. Furthermore, they believed that the collaboration may reinforce the feeling with consumers who already felt positively about the luxury designer brand, thus also increasing the chances for these consumers to purchase items from the luxury designer brand’s original collection in the future. Wearing an item from the collaboration, knowing that a fashionable designer has been in charge of its creation, makes some consumers feel as they have a relation to the luxury brand, a sense of belonging to the brand, even though the item was produced by and designed for H&M. In summary, the focus group participants were generally positive towards the collaborations, and stated that their view of the luxury brands remained unchanged due to the specific circumstances of the collaborations, including the time frame and the fact that it was a limited edition – in terms of mass producing high street H&M – line of clothing. It was pointed 29

Luxury for the Masses out, however, that if the circumstances were different most of the interviewees would re-evaluate their opinion of the luxury brand. 6.3 Survey Results 6.3.1 Consumers and the collaboration – To Buy or Not to Buy...

The collected data shows that the H&M luxury collaborations in general have been received positively by the respondents. Most agree that fashion should be attainable to everyone and that the luxury collaborations are successful in providing regular people with inspiration and fashion on a ‘higher level’ and wish to see more of these collaborations. 36 percent of respondents state that they purchased items from the H&M luxury collaborations. One reason given for this was because of the attractive and fashionable design, and also because of the quality. A majority of the respondents liked the fact that the collection gave them access to luxury at affordable prices. Comments of consumers who bought items from the collaborations include: ‘I liked the ‘price/quality ratio’, ‘Luxury at affordable prices’, ‘A way to dress luxuriously when you can’t afford the real thing’, ‘High fashion and design at low prices’. The hype around the H&M luxury collaborations and the media attention were also mentioned as reasons for purchase. The buzz they created left the many of the consumers excited and curious, wanting to get a piece of a designer they would normally not afford. They enjoyed the fact that they for once could feel special wearing H&M clothes. They state that the collaborations gave them access to a ‘bit of luxury’, however, that they still perceive the collaborations as H&M clothing rather than conventional luxury – ‘Karl Lagerfeld in collaboration with H&M does not mean you buy a piece of Karl Lagerfeld’. The consumers who did not purchase from the collaborations stated reasons that were often related to price. The items were either too expensive in general or too expensive with regard to the fact that they still thought of the collection as H&M – mass-market oriented and that its higher prices were thus not justified. 6.3.2 Consumers and Luxury

14 percent of the respondents state that they purchase luxury fashion, and a further 53 percent say that they like to mix luxury with mass market. Luxury consumers stated that they buy luxury because they like the design and style, as well as the quality and fit of the item. Luxury fascinates them and makes them feel exclusive. Items which are limited and not accessible to all enable consumers of luxury to differentiate themselves and feel more unique. The respondents who did not purchase luxury explain that they are not interested in spending money on it, and that they do not have a need to ‘show off’ or state that they ‘can 30

L uxury for the M asses afford luxury’. The high price meant that luxury remains a dream for respondents; especially younger respondents express that they simply do not have enough money to purchase luxury. However, these young consumers state that they have desire buying more luxurious brands in the future when they have the financial means to do so. 6.3.3 Impact of the collaborations on consumer attitude toward luxury

Consumer response to the collaborations varies; some state that the collaborations are good initiatives and that they affect the image of the luxury designer brand positively. They like the fact that these luxury brands contribute to making luxury more democratic and attainable to the general mass, feeling that this strengthens the luxury designer brands’ respective images. In general, the respondents assert that the collaborations introduced them to luxury brands previously unknown to them and that they raised awareness of the luxury designer brands that they did know of from before. They stated that they now have a better idea of the luxury brands’ style, design and image, and so also felt more compelled to have a look at their original collections. However, several respondents believe that many of the non-luxury consumers’ feelings and reasons for not purchasing luxury would remain unchanged. These non-luxury consumers are generally either not interested in ‘brands’ or find luxury too expensive – irrespective of the collaboration. 6.3.4 All in favour say I?

According to the respondents, H&M is perceived as a being a more trendy and fashionable massmarket retailer than other retailers in the same industry, and frequented by consumers from almost all social classes. The majority of the respondents do not think that the collaborations affect the luxury designer brands in a diluting way. ‘The collaborations are made for the masses and do not compete with or affect the luxury designer respective brands’ images or the consumers’ feelings about their original collections’ – the collaboration is one ‘thing’, the original luxury collections a completely different ‘thing’ – they must not be compared or evaluated against each other. The collaborations are temporary, offering only limited collections. Luxury consumers are not explicitly targeted, and the respondents feel that the collaborations are not attempts at representing luxury per se, hence, luxury consumers’ perception of the luxury designer brands must be unaffected. On the other hand, some of the respondents think that the collaboration has affected the luxury designer brands in a negative way, leaving respondents thinking less favourably of the brands. A quarter of the luxury consumer segment would not purchase items from the luxury designer brand after the collaboration with H&M. H&M and luxury represent a peculiar mix and 31

Luxury for the Masses thus makes the luxury brands seem less exclusive. These consumers feel disappointed over the luxury designer brands’ decision to reach toward and provide the masses with their design. According to these respondents, luxury is not for everyone and luxury designer brands in collaboration with high street retailers dilute their brand images. 6.3.5 In Summary...

The impact of the collaboration has for some resulted in deeper knowledge in the luxury designer brands and so also increased the likelihood for purchase of the original line, whilst leaving others indifferent and unaffected. Some consumers, however, express uncertainty about the level of impact of the collaborations on their view of the luxury designer brand, at the same time as they assume that they have been influenced in some kind of positive way with regards to their awareness and opinion of the luxury designer brands’ respective images and design.

32

L uxury for the M asses

7. Collaborations and the Luxury Brands – An Analysis The reasons for why luxury designer brands pursue collaborations with high street retailers is essentially to reach out to a new target group, to widen their customer base, as well as to increase their visibility and raise awareness. Apart from these opportunities for growth, profit and positive associations to the luxury designer brand, a collaboration also entails risks of negative effects on the consumers’ perception of the image of the luxury designer brand. Are the effects of a collaboration mainly positive or has it caused a backlash with regards to how the consumers view the luxury designer brands? Have their perception of the luxury designer brands changed, and if yes, then in what way? Throughout this study the concept of luxury and brand image has been central to examine the research question – how do collaborations with high-street retailers affect consumer perception of brand image? The following section will present a deeper analysis and application of the theories to the empirical research conducted in this study.

7.1 Luxury – a way of defining one’s self A luxury product is, according to the literature and the primary research, not only confined to the quality and product itself but also to the surrounding environment and the associations to the brand. Concurrently, the primary research shows – especially statements made in the focus groups – that the consumers’ main objective for buying luxury is not to own the actual product, but to own the brand. Whereas a majority of the consumers purchase mass market fashion or a mixture of mass and luxury, they all – irrespective of segment – say that they use their clothes as a way to express their personality. Fashion is thus a way for people to define their self-image, and they choose to assemble things around them to project that image. However, according to the survey results, it seems as though the more luxury a person buys, the more important they find fashion as a means of expressing who they are (see Appendix VI - Tables 1 and 2). Keeping up a prestigious appearance thus seems to be more important for luxury consumers than for others. Buying into a brand image is a way to obtain status and enhance the self, satisfying ego needs. With this in mind, a necessity for consumers buying luxury is thus that the product’s brand image is concurrent with their own self-image. An important factor of the collaborations thus becomes whether buying the luxury brands still satisfies the ego needs after the collaboration, or if the ego needs no longer are satisfied by that particular brand.

7.2 A blurry brand image – cause for consumer identity crises? A concern for the luxury designer brands regarding the collaborations is that they may lose their existing clientele in trying to tap into an untapped consumer group (i.e. non-luxury consumers). 33

Luxury for the Masses Through looking at the collected focus group data, one can see that if a brand chooses to divert from the core into something else, there is always the possibility that the customer will get confused regarding the brand image – an image that he or she has identified with – and come to the conclusion that this new version of the brand is not compatible with the image that he or she has of the self. This would in turn lead to a loss of confidence in the brand. In other words, when the luxury designer brands, with the collaborations, reach out to the masses – and amongst them people who have not previously purchased luxury – they could be seen as breaking the ‘brand contract’ by making the brand more attainable and thus also less exclusive. Further confusion may be caused by the previous alliances of the partner brand, as they also indirectly impact each other, as described by the spill-over effects in co-branding theory. Through H&M, Roberto Cavalli could for example be associated with Marimekko – brands that participants in the focus groups state they would typically not categorise on the same level of luxury. Hence, different luxury designer brands come to be perceived and categorised as being at the same ‘level of luxury’ when that is indeed not how they have created their brand identity. Using the same example; Roberto Cavalli is more luxurious in terms of being more exclusive than Marimekko in how they have built their identity, which was also affirmed by the focus groups. Since the brand image, as stated by Kapferer and Bastien (2009), is an essential part of the success of a luxury designer brand, it is therefore important that the brand does not lose its image in the eyes of its consumers. If so, consumers might in response lose their trust for that brand to provide them with a certain self image and an assurance of belongingness. This is not only a conclusion made by the authors of this study, but also a fact stated by participants in the focus groups as well as respondents of the survey.

7.3 Collaborations – a way to increase awareness of the brand? The consumer segments that purchased items from the collaboration were largely regular massmarket consumers and consumers usually purchasing a mixture of luxury and mass-market (see Appendix VI – Table 3). This could be explained by the fact that these strategic alliances provide these segments with ‘famous’ design they otherwise would not afford or would find very expensive. Owning a jacket or a top from for example ‘Viktor & Rolf for H&M’ or ‘Karl Lagerfeld for H&M’ was expressed by several participants in the focus groups as a way for them to feel a bit more unique and exclusive; an exclusiveness that the luxury consumer segment already has access to, which is why only very few of them have ever purchased an item from the collaborations. Through wearing clothes from the collaborations the mass-market consumers create a bond and a sense of belongingness to the luxury designer brands. Purchasing items from these collaborations indirectly shows evidence that one is not averse to the luxury designer 34

L uxury for the M asses brand’s original line, but that one most probably is appreciative of it (and this would also be valid for all consumer segments). Research among the younger consumer groups shows that these consumers see the luxury designer collaborations as a first step into the ‘world of luxury’. In the future, this might lead to the luxury designer brands having a favourable position in the minds of these consumers. A positive perception together with an increased awareness and understanding of what these brands are, might later lead to a desire to shop from the original luxury designer brands. As stated by Dubois and Paternault (1995) the dream of luxury is dependent on two factors, awareness and purchase. The primary research revealed that, prior to the collaboration, the mass-market consumers were the least aware of the luxury designer brands (66 percent) Consumers purchasing both luxury and mass-market were a little more aware (80 percent) and finally, the consumers purchasing mainly luxury showed the greatest awareness (83 percent) of these brands (see Appendix VI - Table 8). These numbers also reflect the consumer segments’ respective experience in purchasing items from these specific luxury designer brands. This is rather self-explanatory, the more luxury one buys the more one knows about it, and the more opinions one can have about it. Therefore, knowledge is connected to perception. If perception is connected and relates to knowledge, then not knowing the level of luxury of a brand prior to the collaboration could perhaps impact how consumers view it. They may appreciate it as something more mainstream than how the brand intends to be perceived. Thus, instead of gaining attention as a luxury brand, the luxury partner may be perceived at a lower level of luxury than that of its brand identity? Out of the people that stated that they were unaware of the luxury designer brands prior to the collaboration, 40 percent said that the alliance had increased their awareness of these brands (see Appendix VI - Table 5). Also, 37 percent of the consumers that were aware of the luxury designer brands prior to the collaboration also stated that the collaboration had made them more aware, that it had reinforced the luxury brands’ presence in their minds (see Appendix VI - Table 5). Reaching this vast number of luxury consumers must be said to be a successful result, but only as long as the generated awareness has influenced the perception of the luxury designer brands’ respective images in a positive way. (Of course, to reach out to consumers currently with less purchasing power is also highly valuable for the future, as they might later acquire the means to buy the kind of exclusive fashion that the luxury designer brands represent.) Generally, in reaching a wider audience the strategic alliance can be said to be successful from the company’s point of view, as it has indeed increased the awareness of the previously unaware consumers and

35

Luxury for the Masses reinforced the knowledge with those who already were aware. Since the awareness has increased, the perception has also been influenced – but how?

7.4 The more aware one is the better one likes the brand? Has this increase in awareness affected the perception of the luxury designer brands’ respective images? 53 percent of the people who stated that the collaborations have made them more aware also stated that their perception of the luxury designer brands has changed (see Appendix VI Table 7). In what way could be indicated by the fact that 50 percent of these same people want to purchase items from the luxury designer brands’ original lines (see Appendix VI - Table 11). In other words, these consumers, after becoming more aware, have developed an intention to purchase indicates a more favourable perception of the luxury designer brands. On the other hand, can perception change even if there has been no increase in awareness? Of the consumers that stated that the collaborations had not made them more aware of the luxury designer brands, the majority (87 percent) also stated that their perception had not changed (see Appendix VI Table 7), and therefore the answer to the previous question is no. Without new inputs, what grounds are there for changing ones’ perception? Again, awareness – and to some extent purchase intention – and change in perception, are linked to one another. Further, have the collaborations affected the consumers’ perception of the luxury designer brands’ respective images? That the collaborations were received positively was affirmed by the majority of the consumers in both the survey and the focus groups (See Appendix V – Question 19).With only a few exceptions, the collaborations made consumers that previously viewed the brands negatively to develop a more positive view of these brands, and also reinforced regular luxury consumers’ positive attitude towards them – all consumer segments appreciated the fact that the collaborations made ‘luxury’ available to the masses. The positive perception and associations of the collaborations affect the luxury designer brands in a favourable way – and the perception of the luxury designer brands’ respective images can be said to have improved. It has already been asserted that all consumer segments have become more aware of the luxury designer brands, and that the image to some extent has been improved. However, the question remains what happens with the luxury designer brands’ existing and loyal customer base? Through the research it was found that the luxury designer brands’ existing customers were unaffected by the collaboration in regard to their will to continue purchasing from the brands. Barely any of the consumers of the luxury design partners expressed a reluctance to keep shopping from these brands. Also, at least two thirds of all consumers said that the luxury designer brands’ association with H&M did not matter. This leans towards a conclusion that the

36

L uxury for the M asses luxury brands have not been diluted through their alliances with H&M and the perception of the luxury designer brands have not been affected in a negative way by their collaboration with H&M.

7.5 Why? Why is this, why has the stretch down generally not had a negative impact on how consumers view the brand? Luxury is something exclusive and expensive that is not confined to the product itself but also incorporates the surrounding environment and the image of the brand. High street H&M evokes typical feelings of being available to everyone due to low pricing and a broad assortment of clothes and styles. For all purposes, luxury and high street are two completely different and separate concepts. However, the merger over the collaboration has brought them together in such a way that the association of one has the potential of spilling over on the other What one associates with H&M as well as the associations one has to the collaboration should influence how one perceives the luxury designer brands. Research conducted in this study has shown, however, that the influence on the perception on the brand, by the H&M and the collaboration respectively, is lower than expected. The reason cited for this is that while H&M is considered widely attainable and mass produced, the other, closer and thus more relevant factor influencing the luxury designer brand – the collaborations – are a completely different matter. A view of one of the interviewees was that the collections were the results of the luxury designer’s applying their own touch to H&M. Hence, while still designing under the designer name it was not a replica of the items previously sold under the luxury designer brand but a separate subentity that is not representative of the luxury designer brand’s regular design and quality. Therefore, the associations held toward the collaboration would not interfere with the luxury designer brand’s existing operations nor compete with its own lines, as the collaborations are something entirely different, something not luxury yet still something more special than regular H&M clothes – ‘the collaborations are what they are.’ The effect – or non-effect – of the associations towards the luxury designer brand strongly relates to how compatible the luxury designer brands and H&M are, as well as to the way that the collaboration is conducted. Firstly, the perceived fit between the luxury designer brand and H&M is, according to both brand extension and co-branding literature, deemed highly central to the success of the growth endeavour. The research done has proved this fact to be accurate, as participants of the study say that it is because of the nature of the luxury brands and that they have collaborated with H&M and not another high street retailer that the collaboration has not affected the brand negatively. The luxury designer brands collaborating with H&M have not been the traditional houses such as Louis Vuitton, Chanel or Hermès, but in general younger 37

Luxury for the Masses luxury designer brands with a trendy and fresh profile with less history to leverage (hence also less to lose). H&M is seen as a hip and trendy store, and carries positive connotations to its brand. Thus, as the luxury designer brands are somehow always seen to be in style, they both have a high trend factor while still differing greatly in price level. The common ground in being stylish and fashion conscious means that the brand image fit between the luxury designer and H&M is good. At the same time interviewees state that the result might have been entirely different if another Swedish high street retailer such as Lindex or KappAhl attempted the same strategic alliance, as they do not hold the same fashionable, well-liked connotations and international recognition that H&M does. Secondly, an important factor to the consumers is how the collaborations were conducted. Even if the brands had proven to be compatible, the alliance and associations to high street H&M would have been detrimental to how the consumers viewed the brand if it had been a long term project. The short time frame prevents erosion of the brand, ensuring that there is no lasting impression of longevity of the alliance between the brands. Had the luxury designer brands been allied with H&M for longer than a collection, however, the risk of the associations of the collaboration and also H&M spilling over would be considerably greater, as would also the risk of diluting the brand. In the current framing, the dominating impression is that of the collaboration as an event with a surrounding hype. This is furthered by the composition of the collection and the fact that the items are sold in limited editions – limited in terms of the mass producing retailer that hosts the collection, that is. The short time frame and the fact that there only are a certain number of items on sale creates an image of scarcity, therefore also making them rather exclusive. Exclusivity can be shown in different ways, and while luxury traditionally uses both a high price and limited edition goods, the collaborations consist of items that are simply limited edition. Thus, as has been discussed earlier, while not being accepted as luxury, the collaborations are still somewhat exclusive. This, again, makes them fit with the images of the designers; and works as stopper in terms of dilution of the luxury brands, leading to an – in most cases – unchanged, if not improved, perception of the brand image.

38

L uxury for the M asses

8. Discussion & Conclusion This investigation has aimed to provide a basis explaining the effects of collaborations between high street retailers and luxury brands, using the H&M luxury collaborations as a basis. The research conducted in this study shows that the luxury brand image has been marginally affected at best by the association to H&M. The luxury houses have managed to obtain their objectives in generating a lot of attention and differentiating themselves from their regular competitors while simultaneously managed to retain their brand image. Reasons for the success have been that the customers do not think of the collaborations as luxury per se, but something in between luxury and mass. This has meant that the collaboration does not bite off its regular clientele. Another reason has been that H&M is a strong and fashionable brand with which the luxury brands are perceived to fit according to consumers. Also, an important factor was the time frame of the collaborations. As it was a limited period of time the danger of associating the luxury brand too closely with H&M was prevented in advance, leading to a hype around the collaboration instead of yet another line of H&M clothes. Whilst this study has been focused on the particular case of the collaborations between the luxury designer brands and H&M, the general conclusions presented above highlights important issues for brands to consider when contemplating a similar strategic alliance. Collaborations such as these can be successful – if done under the right conditions.

39

Luxury for the Masses

9. Relevance of thesis The topic of this study was chosen as research on this relatively new phenomenon is limited. The luxury market is becoming increasingly populated which makes it important for companies to differentiate themselves from the crowd and make themselves seen. Collaborations with high street retailers accomplish this; but the effect it has on the luxury brand image has not, to the authors’ knowledge, been investigated academically at length prior to this study. Therefore, the objective with this research has been to provide an indication on the effects of these particular collaborations on the luxury brand image. It would be of interest both to the general consumer but, more importantly, significant knowledge for luxury designer brands seeking such a collaboration.

10. Credibility and Suggestions for Future Research The way in which this investigation was conducted was largely limited due to time and financial restrictions, which reduced the opportunity to do more extensive research. To counter this, the authors decided to use both quantitative and qualitative research in weighing up for eventual shortcomings with the data collected, such as a too homogenous group of respondents. Therefore, whilst the authors are confident in their findings based on the participants of the study, it is possible that the result is not thoroughly applicable to the entire population. For future research, with a longer duration and extensive financial needs, this is something that could be improved to ensure that the result is statistically reliable to the whole population. Whilst this study has been performed in Sweden and the conclusion thus only can be related to the Swedish market, the H&M luxury collaborations stretch across countries. Therefore, an interesting aspect to study further would be to see how successful the collaborations are internationally. Also, this study has treated the luxury designer brands in general. A development of this worthy of further research would be to see how each brand’s image has been affected individually. Moreover, several other retailers have collaborated with more upscale brands. Therefore it would be interesting to delve deeper into the issue of perceived fit and compare, for instance, the H&M luxury collaborations with the TopShop or Target collaborations. This would evaluate the H&M brand as a partner to the luxury designer brand in comparison to other high street stores. Further, as Stella McCartney has collaborated both with H&M and Target one could investigate which collaboration had had the greatest impact on Stella McCartney.

40

L uxury for the M asses Finally, as this investigation focused on the effects of the collaborations and not the actual communication strategies, this would be an area that could be investigated in the future. In other words, look at what strategies leads to the desired outcome as it is important for companies to get a greater understanding of how they should communicate in order to manage how their brand is perceived by consumers.

41

Luxury for the Masses

11. Bibliography Aaker, D.A. (2002) Building Strong Brands, London: Simon & Schuster UK Ltd. Aaker, D.A. and Keller, K.L. (1990) 'Consumer Evaluations of Brand Extensions', Journal of Marketing, vol. 54, January, pp. 27-41. Andal-Ancion, A., Coyle, C. and French, L. (2010) 'Reacting to Consumer Trends, Reaching New Markets, and Mitigating Risks in a Tough Economic Environment', The Licensing Journal, January, pp. 1-7. Baumgarth, C. (2004) 'Evaluations of co-brands and spill-over effects: further empirical results', Journal of Marketing Communications, vol. 10, no. 2, June, pp. 115-131. Berthon, P., Pitt, L., Parent, M. and Berthon, J.-P. (2009) 'Brand, Aesthetics and Ephemerality: Observing and Preserving the Luxury', California Management Review, vol. 52, no. 1, Fall, pp. 45-66. Buday, T. (1989) 'Capitalizing on Brand Extensions', Journal of Consumer Marketing, vol. 6, no. 4, pp. 27-30. Cavender, B. and Rein, S. (2009) 'Luxury goods: still strong sellers', China Business Review, vol. 36, no. 2, March-April, pp. 36-39. Cheong, E. and Phau, I. (2003) Young Status Consumers’ Evaluation of Diffusion Brands: The Effects of Consumer Innovation, Adelaide: ANZMAC 2003 Conference Proceedings. Corbellini, E. and Saviolo, S. (2009) Managing fashion and luxury companies, 2nd edition, Milan: Etas. Czellar, S. (2003) 'Consumer attitude toward brand extensions: an integrative model and research propositions', International Journal of Research in Marketing, vol. 20, no. 1, March, pp. 97-115. Darlington, H. (2004) 'Luxury Products For The Masses ', Supply House Times, vol. 47, no. 7, September, pp. 58-60. Dubois, B. and Paternault, C. (1995) 'Observations: Understanding the World of International Luxury Brands: The "Dream Formula"', Journal of Advertising Research, vol. 35, no. 4, pp. 69-76. Foreman, K. and Groves, E. (2009) 'Designer Unions: A Win-Win Situation', Women's Wear Daily, 3 March, p. pp10. Ghauri, P. and Cateora, P. (2006) International Marketing, 2nd edition, Maidenhead: McGraw-Hill Education. Giorgio Armani (2008) Annual Report 2008, Milan: Armani Group. Grime, I., Diamantopoulos, A. and Smith, G. (2002) 'Consumer Evaluations of Extensions and Their Effects on the Core Brand', European Journal of Marketing, vol. 36, no. 11/12, pp. 1415 - 1438. Grubb, E.L. and Grathwohl, H.L. (1967) 'Consumer Self-Concept, Symbolism and Market Behavior: A Theoretical Approach', The Journal of Marketing, vol. 31, no. 4, October, pp. 22-27. H&M (2004) H&M: Press: Press releases: Fashion: Karl Lagerfeld and H&M, 26June, [Online], Available: http://www.hm.com/us/press/pressreleases/__prfashion.nhtml?pressreleaseid=334 [15 March 2010]. H&M (2006) H&M: Press: Press Releases: Corporate: Viktor & Rolf for H&M Fall's Fashion Must-Have, 14September, [Online], Available: http://www.hm.com/us/__prfinance.nhtml?pressreleaseid=230663 [20 February 2010].

42

L uxury for the M asses H&M (2007) H&M: Press: Press Releases: Fashion: Roberto Cavalli at H&M - The Fashion Party has Started, 26October, [Online], Available: http://www.hm.com/us/__prfashion.nhtml?pressreleaseid=523 [20 February 2010]. H&M (2008) H&M: Press: Press Releases: Fashion: COMME DES GARÇONS exclusive collection for H&M, 10October, [Online], Available: http://www.hm.com/us/__prfashion.nhtml?pressreleaseid=681 [20 February 2010]. H&M (2008) H&M: Press: Press Releases: Fashion: H&M's tribute to Marimekko, 13March, [Online], Available: http://www.hm.com/us/press/pressreleases/__prfashion.nhtml?pressreleaseid=561 [20 February 2010]. H&M (2009) H&M: Press: Press releases: Fashion: A whole summer of Matthew Williamson Exclusives, only at H&M, 29April, [Online], Available: http://www.hm.com/us/__prfashion.nhtml?pressreleaseid=781 [20 February 2010]. H&M (2009) H&M: Press: Press Releases: Fashion: The ultimate party wardrobe from Jimmy Choo at H&M, 22October, [Online], Available: http://www.hm.com/us/__prfashion.nhtml?pressreleaseid=881 [20 February 2010]. H&M (2010) H&M: Press: Press Releases: Fashion: Brilliant colour and classic knits this spring from Sonia Rykiel Pour H&M, 9February, [Online], Available: http://www.hm.com/us/press/pressreleases/fashion__prfashion.nhtml [20 February 2010]. Hoesa, M. (2008) 'Hitting the Street', Brand Strategy, April. Jackson, T. and Shaw, D. (2006) The Fashion Handbook, New York: Routledge. Jenkins, B. (2007) 'Italian Distinction', License! Global, vol. 10, no. 3, April, p. 22. Kapferer, J.-N. (2004) Strategic Brand Management: Creating and Sustaining Brand Equity Long Term, 3rd edition, Derby, UK: Kogan Page Limited. Kapferer, J.-N. (2008) The New Strategic Brand Management, 4th edition, London: Kogan Page. Kapferer, J.-N. and Bastien, V. (2009) The Luxury Strategy, London: Kogan Page. Kapferer, J.-N. and Bastien, V. (2009) 'The specificity of luxury management: Turning marketing upside down', The Journal of Brand Management, vol. 16, no. 5-9, March, pp. 311-322. Kim, H. and Roedder John, D. (2008) 'Consumer response to brand extensions: Construal level as a moderator of the importance of perceived fit', Journal of Consumer Psychology, no. 18, p. 116–126. Laurent, G., Dubois, B. and Czellar, S. (2001) 'Consumer Rapport to Luxury: Analyzing Complex and Ambivalent Attitudes', Les Cahiers de Recherche Groupe HEC, no. 736. Leuthesser, L., Kohli, C. and Suri, R. (2003) '2 + 2 = 5? A framework for using co-branding to leverage a brand', Brand Management, vol. 11, no. 1, September, pp. 35-47. Martinez, E., Polo, Y. and de Chernatony, L. (2008) 'Effect of brand extension strategies on brand image: A comparative study of the UK and Spanish markets', International Marketing Review, vol. 25, no. 1, pp. 107 - 137. Murphy, R. (2005) 'Lagerfeld Praises McCartney, H&M Venture', Women's Wear Daily, vol. 189, no. 101, December. 43

Luxury for the Masses Nueno, J.L. and Quelch, J.A. (1998) 'The mass marketing of luxury', Business Horizons, vol. 41, no. 6, pp. 61-68. O'Cass, A. and McEwen, H. (2004) 'Exploring consumer status and conspicuous consumption', Journal of Consumer Behaviour, vol. 4, no. 1, September, pp. 25-39. O'Donnell, K. (2009) 'Lux brands face tough balancing act', Marketing News, 15 February, p. 18. Okonkwo, U. (2009) 'The luxury brand strategy challenge', Journal of Brand Management, vol. 16, pp. 287289. Omni Institute (2010) Toolkit For Conducting Focus Groups, 20February, [Online], Available: http://www.omni.org/docs/FocusGroupToolkit.pdf [20 February 2010]. Parment, A. (2006) Premium- volym- eller budgetmärke? - lär känna ditt varumärkes potential, Kristianstad: Liber. Pitta, D.A. and Prevel Katsanis, L. (1995) 'Understanding brand equity for successful brand extension', Journal of Consumer Marketing, vol. 12, no. 4, pp. 51-64. Pitt, L., Berthon, P.R., Parent, M. and Berthon, J.-P. (2009) Aesthetics and Ephemerality: Observing and Preserving the Luxury Brand, Boston: Harvard Business School Publishing. Poggi, J. (2008) Forbes.com: Forbes Life: Style: Eight New Affordable Luxury Alternatives, 25August, [Online], Available: http://www.forbes.com/2008/08/25/style-luxury-affordable-forbeslife-cx_jp_0825style.html [4 February 2010]. Saunders, M., Lewis, P. and Thornhill, A. (2009) Research Methods for Business Students, Harlow: Pearson Education Ltd. Silverstein, M.J. and Fiske, N. (2003) 'Luxury for the masses', Harvard Business Review, vol. 81, no. 4, April, pp. 48-57. Sjödin, H. (2008) Tensions of Extensions, Vällingby: Stockholm School of Economics. Solomon, M. (2007) 'Consumer Behavior: Buying, Having and Being', in Hohenthal, J. (ed.) Marketing B, Harlow: Pearson Custom Publications. Stegemann, N. (2006) 'Unique Brand Extension Challenges For Luxury Brands', Journal of Business and Economics Research, vol. 4, no. 10, October, pp. 57-68. Thomas, D. (2007) Deluxe - How Luxury Lost its Luster, New York: The Penguin Press. Truong, Y., McColl, R. and Kitchen, P. (2009) 'New Luxury Brand Positioning', Brand Management, vol. 16, no. 5/6, pp. 375-382. Tungate, M. (2008) Fashion Brands: Branding Style from Armani to Zara, London: Kogan Page. Tuominen, P. (1995) Understanding Brand Equity, Turku: Åbo Akademis Tryckeri. Ueltschy, L.C. and Laroche, M. (2004) 'Co-Branding Internationally: Everyone Wins?', Journal of Applied Business Research, vol. 20, no. 3, pp. 91-102. Uggla, H. (2004) 'The Brand Association Base: A conceptual model for strategically leveraging partner brand equity', Brand Management, vol. 12, no. 2, November, pp. 105-123. 44

L uxury for the M asses Uggla, H. (2005) 'Introduction', in Uggla, H. (ed.) Creating Strategic Brand Alliances, Stockholm: Ph. D Brand Management Publishing Group. Vickers, J.S. and Renand, F. (2003) 'The Marketing of Luxury Goods: An exploratory study – three conceptual dimensions', The Marketing Review, no. 3, pp. 459-478. Votolato, N.L. and Unnava, H.R. (2006) 'Spillover of Negative Information on Brand Alliances', Journal of Consumer Psychology, vol. 16, no. 2, pp. 196-202. Washburn, J.H., Till, B.D. and Priluck, R. (2000) 'Co-branding: brand equity and trial effects', Journal of Consumer Marketing, vol. 17, no. 7, pp. 591-604. Women's Wear Daily (2008) WWD Retail: News History: A History of H&M's Designer Collaborations, 10November, [Online], Available: http://www.wwd.com/retail-news/a-history-of-hm-designercollaborations-1854558// [3 March 2010].

45

Luxury for the Masses

12. Appendices 12.1 Appendix I – H&M and luxury strategic alliances A list of the luxury designer brands that have collaborated with H&M. Year

Designer

Country of Origin

2004

Karl Lagerfeld

Germany

2005

Stella McCartney

United Kingdom

2006

Viktor & Rolf

The Netherlands

2007

Roberto Cavalli

Italy

2008

Comme des Garcons

Japan

Marimekko

Finland

Matthew Williamson Spring

United Kingdom

Matthew Williamson Summer

United Kingdom

Jimmy Choo

United Kingdom

Sonia Rykiel Lingerie

France

Sonia Rykiel Collection

France

2009

2010

Sources: (Murphy, 2005) (H&M, 2006) (H&M, 2007) (H&M, 2008) (H&M, 2008) (H&M, 2009) (H&M, 2009) (H&M, 2010)

46

L uxury for the M asses 12.2 Appendix II – Maria Gemzell February 17th 2010. Email response to questions regarding the H&M luxury collaborations. 1.

What criteria do you use when selecting a partner brand for your luxury collections?

- We think about the trend that we want to highlight during that season, as well as looking to internationally well known designers. We want to make exclusive fashion more attainable for everyone and show that fashion and design is not about price. The designers we select should also be different from our previous collaborators as we always want to surprise our customers. 2.

What can H&M offer the chosen designer and what demands does the designer have towards you?

- We make their customer base wider in existing countries; H&M is often present in more markets than where the luxury brand offers their own design which naturally is appealing for them. We also give them new marketing channels. 3. What is H&M’s purpose with the collaborations? - To offer our customers exclusive fashion to good prices. A designer collaboration strengthens our brand as a fashion house and enhances our business concept. 4. What is the designer’s aim with the collaboration? - To reach more customers, new marketing channels. 5. What are the risks and opportunities with the collaboration from H&M’s and the designer’s point of view? - H&M: Our brand is strengthened through working with these collections. The risk may constitute the fact that the campaign would not appeal to our customers, designers may be perceived differently on various markets which could also be a challenge. - Guest designer: Opportunities have already been mentioned, reaching more customers and adding more marketing channels. Risks for them may be that their traditional customers might dislike that more people now have access to their design.

47

Luxury for the Masses

12.3 Appendix III – Focus group topics The following is a list of the topics introduced in the focus group interviews. Part I – Definitions and associations Luxury - clarification of the term luxury: is it all the same or can one differentiate luxury Luxury brands and important features of luxury products H&M and important features of H&M products H&M luxury collaborations Part II - Awareness Knowledge of luxury brands and awareness of the brands that have collaborated with H&M Opinions of the collaborations Possible impacts on perception the luxury designer brand Part III – Purchasing behaviour Luxury habits and purchase of luxury products – who buys luxury Shopping habits of high street retailer Regular collaboration purchase habits Personality of buyer and reason for purchase

48

L uxury for the M asses 12.4 Appendix IV – Survey “H&M and luxury brands in collaboration” Introduction H&M has since November 2004 launched several collections in collaboration with famous luxury brands – first with Karl Lagerfeld and most recently with Sonia Rykiel. This survey intends to investigate how these collaborations have affected the customers of the luxury brands, and examine the consumers’ reflections on the brand and the brand identity.

The survey The following questionnaire was designed exclusively for academic purposes and the collected data will be handled in confidence. Completing the following questions will only take about five to ten minutes. We want to thank you in advance for your participation! Please answer the following questions: Part I 1. o o o o o

What is your age? 45

2. What is your gender? o Female

o Male 3. o o o o o

What is your monthly income? 60 000 SEK 49

Luxury for the Masses

Part II 4. o o o

Is fashion and style important to you? Yes No Maybe

5. o o o

What would best describe the brands of fashion that you buy? Luxury fashion Mass-market fashion A mix of both

6. Do the clothes you wear help you define yourself as a person (express your personality)? o Yes o No 7. Do the clothes you wear make you feel that you belong to a certain social class? o Yes o No

50

L uxury for the M asses Part III 8. Were you aware of the luxury designer brands that have collaborated with H&M prior to the collaboration? o Yes o No 9. Have the collaborations made you more aware of the luxury designer brands? o Yes o No 10. Have you ever purchased items from the luxury collaborations with H&M? o Yes o No 11. Why did/did you not purchase items from these collections? 12. Had you ever purchased an item from either of the luxury designer brands premium lines prior to the collaboration? o Yes o No 13. For what reason? 14. If yes (on question 12), would you continue to purchase items from the luxury brand after the collaboration? o Yes o No 15. If no (on question 12), have the collaborations made you more aware of the luxury brands and want to purchase an item from any of them? o Yes o No 16. For what reason? 17. Has your perception of the luxury brands changed after the collaborations with H&M? o Yes o No 18. Explain? (For example; in terms of luxury, quality etc.) 19. Do you think that these collaborations were good initiatives? o Yes o No 20. Why? 21. How do you think that regular luxury consumers consider the collaborations with H&M? o Positively o Negatively o Indifferent

51

Luxury for the Masses 22. How do you think that non-luxury consumers feel about the collaborations with H&M? o Positively o Negatively o Indifferent

Thank you for your participation!

52

L uxury for the M asses 12.5 Appendix V – Survey Results 1. Age 45

1% Male 34%

22% Female 66%

71%

3. Income (SEK) 6000

6%

30001-45000

4. Is fashion and style important to you?

6% 3% Partly 34% 24%

Yes 61%

61% No 5%

5. What would best describe the fashion that you buy? Luxury

Mass market

A mixture

6. Do the clothes you wear help you define yourself as a person? No 11%

14% 53%

33%

Yes 89%

53

Luxury for the Masses 7. Do the clothes you wear make you feel that you belong to a certain social class?

8. Were you aware of the luxury designer brands that have collaborated with H&M prior to the collaboration?

No 39%

No 24% Yes 61%

9. Have the collaborations made you more aware of the luxury designer brands?

Yes 76%

10. Have you purchased items from the luxury collaborations with H&M?

Yes 37%

Yes 42%

No 63%

No 58%

12. Had you ever purchased an item from either of the luxury designer brands premium lines prior to the collaboration?

14. If you had purchased items from the luxury designer brand prior to the collaboration, would you continue to do so afterwards?

Yes 36%

Maybe 37%

No 64% No 13%

54

Yes 50%

L uxury for the M asses 15. Have the collaborations made you more aware of the luxury designer brands and want to purchase an item from any of them?

17. Has your perception of the luxury designer brands changed after the collaborations with H&M? Yes 28%

Yes 34% No 72%

No 66%

19. Do you think that these collaborations were good initiatives? No 8%

22. How do you think that nonluxury consumers feel about the collaborations with H&M? Positively 2%

Yes 92%

Negatively

Indifferent

17%

81%

21. How do you think that regular luxury consumers regard the collaborations with H&M? Positively

Negatively

41%

Indifferent

30%

29%

55

Luxury for the Masses

12.6 Appendix VI – Cross references Table 1 Do the clothes you wear help you define yourself as a person and express your personality?

Percentage of the category

Percentage of the total

No

9%

4,76 %

Yes

91%

48,81 %

No

7%

1,19 %

Yes

93%

13,1 %

No

15%

4,76 %

Yes 379 out of 379 (100 %) respondents answered both questions.

85%

27,38 %

Is fashion and style important to you?

Percentage of the category

Percentage of the total

No

0%

0%

Partly

29%

15,48 %

Yes No

72% 0%

38,1 % 0%

Partly Yes

7% 93%

1,19 % 13,1 %

No

15%

4,76 %

52% 33%

16,67 % 10,71 %

Percentage of the Category

Percentage of the total

43% 21% 36% 71% 3% 26%

27,38 % 13,1 % 22,62 % 26,19 % 1,19 % 9,52 %

What would best describe the fashion brands that you buy?

Percentage of the category

A mixture

53%

Luxury

Mass-market

14%

33%

Table 2 What would best describe the fashion brands that you buy?

A mixture

Percentage of the category

53%

Luxury

14%

Mass-market

33%

Partly Yes 379 out of 379 (100 %) respondents answered both questions.

Table 3 Have you ever purchased an item from the luxury collaborations with H&M?

Percentage of the Category

What would best describe the fashion brands that you buy?

Both Luxury Mass-market Both Yes 37% Luxury Mass-market 379 out of 379 (100 %) respondents answered both questions. No

56

63%

L uxury for the M asses Table 4 If you have purchased luxury before from these brands would you continue to purchase items from them after the collaboration?

Percentage of the category

Percentage of the total

Maybe

36%

22,08 %

No Yes

10% 54%

6,49 % 33,77 %

Maybe

38%

14,29 %

No Yes 347 out of 379 (92 %) respondents have answered both questions.

17% 45%

6,49 % 16,88 %

Have the collaborations made you more aware of the luxury designer brands?

Percentage of the category

No

63%

Yes

37%

Table 5 Were you aware of the luxury designer brands that have collaborated with H&M prior to the collaboration?

Percentage of the category

No

24%

Have the collaborations made you more aware of the luxury brands?

Percentage of the category

Percentage of the total

No

60%

14,29 %

Yes

40%

9,52 %

No

63%

47,62 %

Yes 379 out of 379 (100 %) respondents answered both questions.

37%

28,57 %

Yes

76%

Table 6 If you have NOT purchased luxury brands before, have the collaborations made you more interested in the luxury market and made you want to purchase items from any of the luxury brands?

Percentage of the category

Percentage of the total

No

59%

31,34 %

Yes No

41% 50%

22,39 % 4,48 %

Yes

50%

4,48 %

No Yes

68% 32%

25,37 % 11,94 %

Has your perception of the luxury brands changed after the collaborations with H&M?

Percentage of the category

Percentage of the total

No

87%

53,57 %

Yes

13%

8,33 %

No

47%

17,86 %

Yes 379 out of 379 (100 %) respondents answered both questions.

53%

20,24 %

What would best describe the fashion brands that you buy?

Percentage of the category

A mixture

53%

Luxury

14%

Mass-market

33%

303 out of 379 (80 %) respondents answered both questions.

Table 7 Have the collaborations made you more aware of the luxury designer brands?

Percentage of the category

No

63%

Yes

37%

57

Luxury for the Masses Table 8

Several luxury brands have collaborated with H&M, were you aware of most of these brands prior to their collaboration with H&M?

Percentage of the category

Percentage of the total

No

20%

10,71 %

Yes

80%

42,86 %

No

17%

2,38 %

Yes

83%

11,9 %

No

34%

10,71 %

Yes 379 out of 379 (100 %) respondents answered both questions.

66%

21,43 %

What would best describe the fashion brands that you buy?

Percentage of the category

A mixture

53%

Luxury Mass-market

14% 33%

Table 9 If you have NOT purchased luxury brands before, have the collaborations made you more interested in the luxury market and made you want to purchase items from any of the luxury brands?

Percentage of the category

Percentage of the total

No

59%

44,78 %

Yes

41%

31,34 %

No

67%

16,42 %

Yes 303 out of 379 (80 %) respondents answered both questions.

33%

7,46 %

Had you ever purchased an item from either of the luxury designer brands prior to the collaboration?

Percentage of the category

No

64%

Yes

36%

Table 10 Had you ever purchased an item from either of the luxury designer brands prior to the collaboration?

Percentage of the Category

If you have purchased luxury before from these brands would you continue to purchase items from them after the collaboration?

Maybe No Yes Maybe Yes 40% No Yes 349 out of 379 (92 %) respondents have answered both questions. No

58

60%

Percentage of the Category

Percentage of the total

41% 20% 39% 29% 3% 68%

24,68 % 11,69 % 23,38 % 11,69 % 1,3 % 27,27 %

L uxury for the M asses Table 11

Have the collaborations made you more aware of the luxury brands?

No Yes

Percentage of the Category

If you have NOT purchased luxury brands before, have the collaborations made you more interested in the luxury market and made you want to purchase items from any of the luxury brands?

Percentage of the Category

Percentage of the total

No

70%

38,81 %

55%

Yes

30%

16,42 %

45%

No

50%

22,39 %

50%

22,39 %

Yes 303 out of 379 (80 %) respondents answered both questions.

59