Exploring young consumer's decision‐making for luxury co-branding combinations

Abstract

PurposeThe purpose of this paper is to identify the realistic trade-offs young consumers make when evaluating luxury co-branding combinations based on signalling theory.Design/methodology/approachConjoint analysis was employed to evaluate the relative impact of four major attributes (i.e. brand combinations, retail channels, uniqueness and price) on consumer desirability for luxury co-branding combinations. The data were analysed using desirability indices.FindingsBrand combinations, uniqueness and price significantly impact consumer desirability of luxury co-branding combinations. The luxury brand and sportswear combination results in the highest desirability when price is more similar to the sportswear constituent and participants perceive that the collaboration as exclusive.Practical implicationsThe results suggest that luxury brands need to consider the partnering brand's retail format primarily for co-branding strategy. Luxury brand collaborations with sportswear and premium priced streetwear brands are more likely to result in higher desirability among consumers compared to collaborations with fast fashion and mass-market brands. Additionally, uniqueness may not be effective as a point of differentiation in cases where luxury brands cannot guarantee a single yearly collaboration.Originality/valueThe decision to use existing brands for the fictitious combinations developed more sensible scenarios for respondents. In addition, rather than discrete questions, attribute-based combinations provide a more realistic depiction of consumers' decision making on luxury co-branding. Finally, the results provide marketing practitioners with practical directions for future development of fashion luxury co-branding strategy.

Success drivers of co‐branding: A meta‐analysis

“…In the case of the literature on co‐branding success factors, there is an insufficient number of papers on some of the variables such as variety seeking (Mazodier & Merunka, 2014), brand involvement (Moon & Sprott, 2016), dialectical self (Wang et al, 2020), retail channel (e.g. Yu et al, 2020) and sensory fit (e.g. Ahn et al, 2020).…”

“…Existing brand literature conceptualises the consumer‐based brand equity as a composite of many consumer perception aspects, such as brand association, brand image, perceived quality, brand familiarity and brand awareness (Aaker, 1991; Keller, 1993), and also incorporates consumer behaviour aspects, such as preferences, loyalty, and purchase intention (Aaker, 1991; Agarwal and Rao, 1996). The researchers in co‐branding literature have extensively investigated the impact of one or more aspect of brand equity of partnering brands on co‐branding evaluation (Ma et al, 2018; Yu et al, 2020).…”

“…The researchers in co-branding literature have extensively investigated the impact of one or more aspect of brand equity of partnering brands on co-branding evaluation (Ma et al, 2018;Yu et al, 2020).…”

“…By fostering the right connections, business managers adopt a co-branding strategy to complement their current strengths while covering their weaknesses (Nielsen, 2017).Co-branding, also named brand alliance, is a marketing strategy in which two or more brands are presented simultaneously to the consumer as one product to create a sum of brand assets, that is greater than that of the individual brands (Ahn et al, 2020;Newmeyer et al, 2018;Rao et al, 1999). Co-branding combines the individual brand characteristics of the constituent brands and transfers the associated values of both brands to the created cobranding (Yu et al, 2020). The purpose of forming a co-branding is to create synergies, boost awareness and enhance the value of the brands involved by leveraging each brand through the transfer of associations from one brand to the other and differentiating them…”

Co-branding of compass shoes on social networks

“…Combining two well-known brands can be a signal for consumers to represent the image of the product being offered (Washburn et al, 2000). Previous research found that to identify the realistic trade-offs that young consumers make when evaluating luxury co-brand combinations based on signal theory (Yu et al, 2020). Furthermore, the historical relationship of the prospective brand is another important thing to consider (Nasution et al, 2020), where the success of communication reach is embedded through a motivational touch, which is given to the final consumers creating a sense of integrity (Raja, 2020).…”