Master Thesis

The Effect of Co-Branding on the Fashion Luxury

Consumer’s Brand Equity:

Comparison between the Generations Y and X.

Authors: Fernández Hidalgo, Cristina –

930803 – cf222gn@student.lnu.se

Mikano, Larry - 860922 –

lm222mh@student.lnu.se

Vermeersch, Tom – 911026 –

tv222bu@student.lnu.se

Supervisor: Setayesh Sattari

Examiner: Anders Pehrsson

Date: 05/27/2016

Subject: Business Administration with major

within Marketing, Degree Project

Level: Master (1 year)

Course code: 16VT-4FE15E

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Acknowledgement

This thesis was conducted in the scope of the Marketing, Master Program during the spring

semester of 2016 at Linnaeus University.

The successful completion of this thesis would not have been possible without the support of

multiple individuals. Therefore, first of all, we would like to express our gratitude to our mentor

Prof. Setayesh Sattari who was always available for us with experience, guidance and necessary

criticism for all our ideas and questions. Also, we want to give thanks to Prof. Anders Pehrsson

who was there for us with critical thought and theoretical support during the seminars in the early

stages of our thesis.

We would also like to express our gratitude to the General Manager at Harvey Nichols, Simon

Youden, who was kind enough to make the London Knightsbridge store available for us to

conduct our survey. We owe the strength of our collected sample and data to his support and

insight in the potential importance of our research.

Finally we; Cristina, Larry and Tom would like to thank the entire marketing department of the

Linnaeus University. The entire school and staff stimulated our knowledge, ambitions, skills and

passions in marketing during the entirety of the master program and created a wonderful

environment for us as students to prepare ourselves for our professional careers.

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Abstract

The co-branding strategies are gaining attention from research due to the special difficulties of

implementing a collaborative strategy. Hence, this paper evaluates the effect of the co-branding

strategy between a luxury brand and a high-street retailer on the luxury consumers’ brand equity

of the luxury brand post-co-branding. Additionally, this study aims to find differences between

the generation Y and X cohorts in terms of brand equity impact from co-branding.

This effect was evaluated from three brand equity dimensions: perceived quality, brand image

and brand loyalty. To conduct this research the data was collected at the department store Harvey

Nichols in London where luxury fashion brands are sold. Later the data was analyzed with a

regression, analysis and t-test.

The consumers showed differences in terms of their attitude towards the co-branding strategies

between a luxury fashion brand and a high-street retailer. In addition, this research found that all

the brand equity dimensions suffer a direct influence from the attitude towards co-branding for all

the consumers in the study. Direct influence means that the co-branding strategies may cause

positive or negative spillover effects. Moreover, the results conclude that there is only a

difference in the brand equity dimension of brand loyalty between the generation cohorts Y and

X.

Keywords

Co-branding, Luxury Fashion, Brand Equity, Consumer-based, Collaboration, Perceived Quality,

Brand Image, Brand Loyalty, Generation Y, Generation X, Information Integration Theory

London.

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Content

1 Introduction .............................................................................................................................. 6

1.1 Background ....................................................................................................................... 6

1.2 Problem Discussion .......................................................................................................... 9

1.3 Research Purpose ............................................................................................................ 11

1.4 Delimitations ................................................................................................................... 11

1.5 Report Structure .............................................................................................................. 12

2 Theoretical Background ......................................................................................................... 13

2.1 Co-branding .................................................................................................................... 13

2.2 Attitudes towards Co-branding ....................................................................................... 15

2.3 Brand Equity ................................................................................................................... 17

2.3.1 Perceived Quality .................................................................................................... 19

2.3.2 Brand Image ............................................................................................................ 20

2.3.3 Brand Loyalty .......................................................................................................... 22

3 Opperationalization and Conceptual Framework .................................................................. 24

3.1 Conceptual Framework ................................................................................................... 24

3.2 Operationalization ........................................................................................................... 26

4 Method ................................................................................................................................... 29

4.1 Research Approach ......................................................................................................... 29

4.2 Research Design ............................................................................................................. 29

4.3 Data Sources ................................................................................................................... 30

4.4 Population and Sample ................................................................................................... 30

4.5 Data Collection ............................................................................................................... 31

4.5.1 Data Collection Instrument ...................................................................................... 31

4.5.2 Data Collection Procedure ....................................................................................... 32

4.5.3 Pre-test ..................................................................................................................... 33

4.6 Quality Criteria ............................................................................................................... 33

4.7 Data Analysis Method .................................................................................................... 34

5 Results and Analysis .............................................................................................................. 37

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5.1 Descriptive Data of the Respondents .............................................................................. 37

5.2 Factor Construction ......................................................................................................... 38

5.3 Reliability ........................................................................................................................ 39

5.4 Hypotheses Testing ......................................................................................................... 41

5.4.1 Attitudes towards Co-Branding between the Generations Y and X ........................ 41

5.4.2 Attitudes towards Co-Branding’s Influence on Perceived Quality ......................... 42

5.4.3 Attitudes towards Co-Branding’s Influence on Brand Image ................................. 45

5.4.4 Attitudes towards Co-Branding’s Influence on Brand Loyalty ............................... 48

5.4.5 Hypotheses Acceptance ........................................................................................... 50

6 Discussion .............................................................................................................................. 52

7 Conclusion ............................................................................................................................. 56

8 Managerial Implications ........................................................................................................ 58

9 Limitations and Further Research.......................................................................................... 60

References ..................................................................................................................................... 63

Appendices .................................................................................................................................... 76

Appendix A - Descriptive Statistics .......................................................................................... 76

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1 Introduction

This chapter will introduce the topics of the co-branding and the value of the brands, showing an

existing problem in the market that needs to be addressed by research. Through this problem: a

purpose, research questions and some delimitations are drawn.

1.1 Background

Despite the world financial and economic crisis, the overall luxury market exceeded $965 billion

in 2014 with an industry comprising of nine segments in total (Cheah et al., 2015; Bain & Co.,

2014). Personal luxury goods prevails amongst these nine segments as an important category and

remains the core of the luxury market ― specifically luxury fashion brands helping to propel the

upward growth (Bain & Co., 2014). The industry of luxury fashion has been showing a positive-

escalating tendency. Even more, during the first half of this decade it has grown more than a 46%

in worldwide value (Statista, 2016). As of 2015, Louis Vuitton currently is the most valuable

luxury brand in the world followed bybrands such as Hermes, Gucci and Chanel (Statista, 2016).

Although, interestingly the value of the biggest brands in the luxury fashion industry is

comparable to high-street brands also known as fast-fashion brands that strategically compete

differently and target a different consumer segment. For instance, according to Interbrand (2016),

Louis Vuitton has a similar brand value to H&M ― around the 22.250 million U.S. dollars.

Within the fashion industry, luxury brands differentiate themselves by emphasizing, between

others, the image status, the exclusivity and the premium pricing (Esmaeilpour, 2015; Cheah et

al., 2015). Hence, they provide a mix of pleasure and unavailability for the mass that serves the

luxury consumers with social salience and identification (Chattalas and Shukla, 2015). In

addition, Liu et al. (2012) proposed five values that a brand should have to be considered

luxurious: conspicuous, unique, social, hedonic and quality. Consumers of luxury products can be

characterized today as coming from all different social and income classes, using prestige

products to elevate their confidence and also because they enjoy wearing well-known brands

(Husic and Cicic, 2009).

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Over the years, the luxury fashion industry has evolved and changed. Presently, luxury goods are

no longer solely exclusive to the rich and elite society (Yeoman and McMahon-Beattie, 2006;

Wiedmann et al., 2009) but have become more accessible to the demand of people that can

occasionally afford the brands (Yeoman, 2011; Wiedmann et al., 2009). This can be seen as the

democratization phenomenon which describes the inaccessible becoming accessible as luxury

goods are now widely available to more consumers thanks to mass premium brands, second lines

and designer collaborations (Okonkwo, 2007; Silverstein and Fiske, 2003; Twitchell, 2002).

In addition, consumer behavior patterns are also changing. Looking at generation cohorts,

generation theorists propose that due to changes in macro-environment, people are influenced as

a result of the specific time period they are born into which imprints a specific and similar

purchasing and consumption behavior (Howe and Strauss, 2000). For instance, the consumers in

the generation Y differ in comparison to those of previous generations (Tomkins, 1999), and

young consumers’ perception of luxury subsequently has a different meaning to that of

generation X (Hauck and Stanforth, 2007). Thus, several authors agree that both generations Y

and X differ in values, characteristics and behavior (Gurău, 2012). As a response, brands have

been compelled to “re-position themselves to attract the new, niche luxury market that employs a

different way of thinking to traditional ‘old luxury’ (de los Santos, 2009, p.2) and brands now

must adapt to the ever-changing lifestyles of customers (Fredlund et al., 2006). Moreover,

according to So et al. (2013, p.404), “luxury firms are gradually shifting their corporate branding

focus from ‘building social status’ to ‘customer emotional attachment’ in an effort to cultivate

enduring loyalty”. The emotional and availability factors would allow brands to capitalize long-

term relationships with a wider number of consumers (Cheah et al., 2015; Hanslin and Rindell,

2014).

Strategies to enter or target new markets are becoming more important than ever for the luxury

fashion firms (Oeppen and Jamal, 2014; Hennigs et al., 2013). Some of these strategies which can

be considered a form of brand extension includes: line and category extensions, franchising and

co-branding all of which take advantage of leveraging the parent brand name recognition and

image (Aaker and Keller, 1990; Pitta and Katsanis, 1995; Stegemann, 2006; Hennigs et al.,

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2013). When looking at brand extensions, one of the most commented strategies is co-branding

(Oeppen and Jamal, 2014; Okonkwo, 2007; Hanslin and Rindell, 2014). Co-branding, also known

as brand alliances, is defined by Motion et al. (2003), as a corporate brand partnership, in other

words it is the collaboration between two or more different brands. This means that different

brands with different sets of values have to adapt to each other to create a new brand with

qualities from all the co-branding partners (Motion et al., 2003; Rao et al., 1999).

Today, designers and retailers have followed this example and high-street brands like Adidas,

TopShop and frequently H&M have become known for these occasional practices partnering up

with luxury brands (Okonkwo, 2007; Hirschmiller, 2014). Looking at the other side of the

spectrum, luxury fashion designers like Stella McCartney, Versace or Valentino have also

adopted co-branding strategies with high-street retailers as an opportunity to bring their products

into wider distribution (Doran, 2012; Hirschmiller, 2014). Collaborations include Karl Lagerfeld

for H&M, Stella McCartney also for H&M and Yohji Yamamoto for Adidas (Ahn et al., 2010).

Kapferer and Bastien (2009, p. 311) stated that "luxury is everywhere" which as a basic meaning

still presents challenges in the management of luxury brands (Hennigs et al., 2013) who operate

in important fashion capital centers such as London (Godart, 2012) where this research was

conducted.

Despite the common use of co-branding strategies involving luxury brands and the popularity as

a brand management strategy (Wang et al., 2012; Wason, et al., 2015), luxury firms are faced

with the consequences of a spillover effect which can be positive or negative. This can be down

to the collaborative relationship which involves brand associations derived from consumers based

on the brand fit between the luxury brand and high-street retailer. In addition, Brand equity is

said to play an instrumental role in consumers’ decisions to purchase certain brands over others

(Swait et al., 1993). Therefore, luxury brands face compromising brand equity dimensions such

as the brand image as well as the relationship and brand loyalty of customers ― generation Y and

X where generational differences in consumer purchase patterns have been shown to exist

(Norum, 2003).

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1.2 Problem Discussion

The reasons why fashion companies utilize co-branding have been explained from different

perspectives. From the romantic reason of Karl Lagerfeld of taking the fashion to the streets, to

the studied reason of creating a brand experience that would attract young consumers who dream

about having a real piece of luxury fashion (Okonkwo, 2007). In any case, research shows that

the branding strategies in the fashion industry are relevant study topics due to the market value

and the fast changes the industry faces (Hanslin and Rindell, 2014; Oeppen and Jamal, 2014;

Okonkwo, 2007; So et al., 2013; Fionda and Moore, 2009). Researchers like McColl and Moore

(2011) established the need of more understanding about the industry, especially from the

consumers’ point of view. Hence, collaborations between brands has attracted several

researchers, as reasoned by Oeppen and Jamal (2014, pp.925-926) who states that “luxury

fashion brands, in particular, face additional pressure of expanding their consumer base and brand

awareness, while retaining exclusivity, uniqueness and in turn premium prices”.

The co-branding strategy has been generally accepted in terms of consumer-based brand equity

studying the co-branded product (e.g. Washburn et al., 2000) or the co-branding as a brand (e.g.

Motion et al., 2003) but there is little research covering the resulting consumers’ perceived brand

equity of the constituents brands (specifically the luxury brand) post-co-branding. To the authors’

knowledge, Wang et al. (2012) is one of the few studies that have attempted to examine the

effects of a co-branding strategy between luxury brands and retailers on consumers evaluation of

the luxury brand’s image. Despite the results, limitations have called for further research. Other

studies, such as Hanslin and Rindell (2014) found that lower-profile line extensions, similar to

the co-branding strategies between brands of the same sector, can lead both to positive and

negative brand perceptions. These perceptions can play a big role on the loyalty or enmity of the

consumers towards the brand (Wang et al., 2012; Hanslin and Rindell, 2014). Hanslin and

Rindell (2014) also showed that some consumers were ashamed to admit they liked the brand

extensions as they must show that they can afford more expensive lines, exemplifying a problem

of adjustment in the mindset of the consumers.

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Despite other co-branding studies focusing on the perspective of the consumer (e.g. Besharat,

2010; Wang et al., 2012 or Ahn et al., 2010), no attempts have been made to discover the

existence of age clusters for the perception of the constituent brands (luxury brand) after the co-

branding strategy occurs. As mentioned, luxury is no longer limited to the wealthy older

consumers (Jackson, 2011; Shea, 2013; Silverstein and Fiske, 2008). Today’s luxury client is said

to also be most likely a member of generation Y or generation X (Stein and Sanburn, 2013;

Giovannini et al., 2015, p.4). The younger generation, so called generation Y or millennials are

those consumers who were born between 1980’s and middle 1990’s and they come after

generation X who were born between the years 1961 and 1981, (Weidmer, 2015; Robinson,

2015).

Generation Y have become a focal point for luxury brands and are at the forefront for luxury

consumption (Timperio et al., 2015; Chu and Kamal, 2011). Younger individuals have been

discovered to find luxury brands a way or substitute to reassure and consolidate their unsure

identity (Piacentini and Mailer, 2004), and as a result may spend considerable amounts of money

on luxury goods (Wong and Ahuvia, 1998). They have also been known to be more brand

conscious (Loroz and Helgeson, 2013) and can be characterized as status-seeking fashion

innovators (Hanslin and Rindell, 2014). In contrast, generation X or older luxury consumers are

shown to be more brand loyal when purchasing an assortment of brands which represent different

price points and prestige (Little, 2012; Richie, 1995). They have been identified as high-earners

due to the point in their lives and characterized as having affinity for nicer things which makes

them an ideal target for luxury companies (Lamb, 2016). Additionally, generation X are known to

be more value oriented and use an analytical approach when making purchases towards brands

(Reese, 1997). Research has identified the importance for luxury brands to preserve their high-

end images by retaining a sense of exclusivity to brands focal demographic segments, such as

affluent middle-to-old age adults (Wang et al., 2012).

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1.3 Research Purpose

Hence, this current study proposes that different generations of consumers will perceive the co-

branding strategy differently leading to positive or negative responses. Therefore, the purpose of

this research paper is to evaluate the effect of the co-branding strategy between a luxury brand

and a high-street retailer on the luxury consumers’ brand equity of the luxury brand.

Additionally, the paper seeks to make a comparison between generations Y and X through

assessing customer-based brand equity variables of perceived quality, brand image and brand

loyalty post-co-branding towards the luxury brand.

Therefore, this study asks the following research questions:

Q1: How does the co-branding strategy at the luxury fashion market influence consumers’ brand

equity dimensions towards the luxury brand?

Q2: How does the co-branding strategy at the luxury fashion affect differently the consumers’

brand equity dimensions towards the luxury brand between generations Y and X?

1.4 Delimitations

Although co-branding does not imply a step-down line extension or the collaboration of two

brands of the same sector such as luxury fashion and high-street fashion, this paper will examine

that specific case. In addition, in this research paper, co-branding portrays the pairing of two

branded products (constituent brands) to form a separate and unique product (composite brand).

Researchers will attempt to see this corporate partnership from the point of view of the

consumers’ brands chosen that belong to the luxury fashion industry in London.

Additionally, the theoretical background is based on the consumer-based brand equity and

excludes any other kind of brand equity such as financial-based or company-based. Lastly, for the

sake of the paper and as method choice, the brand awareness and the other utilitarian assets which

is part of the consumer-based brand equity conceptual framework were not deemed as necessary

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to include. Specifically for the case of brand awareness, the respondents did not need to answer

about this variable since they were free to choose a brand they were already aware of in the

beginning of the questionnaire.

1.5 Report Structure

In order to achieve its purpose, this paper exposes a number of academic articles and other

literature to provide a perspective of the co-branding, the brand equity and the analysis methods.

It also proposes an operationalization and a model with some hypotheses to be tested and

answered at the analysis, providing results where the regression analysis and the t-test were

employed. Thereafter, the paper will gather all the previous and new information into a

discussion and a conclusion of the results. Finally this paper will end formulating implications for

managers and marketers, pointing out the limitations of the study and proposing further research

to be conducted.

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2 Theoretical Background

This chapter will expand the understanding of co-branding and the attitude formation over this

strategy, while also explaining in depth the evidence of the influence of a branding strategy on

the brand equity dimensions. In addition, it gives insights into the different perceptions of the

brand equity dimensions by the generations Y and X.

2.1 Co-branding

The theoretical basis of co-branding’s impact on customers are derived from theories on signaling

(Rao and Ruekert, 1994; Rao et al., 1999) as well as from attitude formation (Anderson, 1981;

Hillyer & Tikoo, 1995). The past decades have seen a huge increase of cooperative branding

activities with co-branding progressively becoming an effective strategy to leverage a new or

unfamiliar brand (Rao et al., 1999; Voss & Gammoh, 2004; Washburn et al., 2000). Co-branding

or brand alliances has also been mentioned in luxury fashion literature as a widely developed

strategy (Cho and Fiore, 2015; Wang et al., 2012) and research on brands and branding shows it

as increasingly prevalent (Keller and Lehmann, 2006).

Hanslin and Rindell (2014) and Kim and Lavack, (1996) refer to co-branding as a collaborative

step-down line extension because it implies the elaboration of a similar product that respects all

the characteristics of the other lines but the price range and quality. This paper exemplifies the

case of a step-down line extension focusing on the downgrade collaboration of luxury to high-

street in contrast to a step-up line extension of high-street to luxury (Kim et al., 2001).

Rao and Ruekert (1994) previous studies suggest partner brands are favorable if they can signal

high-quality cues that transmit to the host brand or provide information on product attributes

which ultimately benefits the alliance. Whereas, Blacket and Boad (1999, p.118) also states that

the success of brand alliances or partnerships can be attributed to each partner having the generic

values that enable their brand to enter the co-brand category and compete effectively. This

ultimately is down to commonality and synergy existing between both brands which will then

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lead to a constructive relationship (Motion et al. 2003). The main reason for co-branding as

mentioned by Keller (1998) is to transfer the positive associations of a partner’s brand to one’s

own brand. In the case of luxury and high street collaboration positive associations for the luxury

brand would demonstrate affordability as well as accessibility.

However, co-branding has been shown to come with a variety of risks which can be down to

pairing a partner that can damage the existing product's robust brand equity (Washburn et al.,

2000). Wang et al. (2012) shows how consumers can respond negatively to co-branding, which

highlights the potential complexity and risks of brand alliances if poorly chosen. Wang et al.

(2012, p.5) also proposes that "a poor brand or product fit can result in tarnished brand equity and

possibly a loss of luxury image". Ultimately, this can explain why designers abandon the idea of

launching a second line (Menkes, 2012), and why leading luxury fashion brands express their

pessimistic views on extending a brand downwards (Lutz, 2012).

Additionally, evaluations of consumer attitudes toward co-branding conclude that prior attitudes

towards the constituent brands as well as both product and brand fit can be linked to attitudes to

the partnership (Simonin and Ruth 1998; Keller and Lehman, 2006). Simonin and Ruth (1998)

research also showed that brand familiarity plays a significant role in comprehending brand

alliance evaluations and their spillover effects (Wang et al., 2012, p.9). Considering how a brand

alliance affects perceptions of the parent brands, Helmig et al. (2007) has shown that spillover

effects are often asymmetrical, with one brand gaining more from as a result of the partnership.

Lebar et al. (2005) study which included the use of ten different partnership scenarios with actual

brands discovered that co-branding led to a decreased brand esteem weighing up average scores.

It was also recommended that high-esteem brands be cautious if they decided to pursue a brand

alliance (Watson and Charlton, 2015). Despite this, most studies have demonstrated the positive

spillover effects that happens to constituent brands in the aftermath of co-branding (Baumgarth,

2004; Simonin & Ruth, 1998; Washburn et al.,2000). Swaminathan et al. (2012) also found

positive spillover effects but showed this only happening where the perceived brand fit was

comparatively high in the co-branding partnership. This corroborates Xiao and Lee (2014)

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research which introduced brand identity fit as instrumental to influencing a successful co-

branding strategy.

Overall, the importance of belonging to certain social ranking and maintaining a precise image

among peer groups has become important as well as increased the need to own luxury products

even among young consumers in addition to the older generation (Okonkwo, 2007; Phau and

Cheong, 2009; Truong et al., 2009). Therefore luxury firms seeking to participate in a co-

branding strategy must consider both the short-term and long-term, positive and negative

spillover effects towards the luxury brand, based on their different demographic consumer groups

they cater to.

2.2 Attitudes towards Co-branding

As this research attempts to understand and evaluate the attitude change and formation of

consumers in the aftermath of co-branding transpiring, the authors adopts the theoretical

foundation of Anderson's (1971) Information Integration Theory (IIT). IIT explores how

attitudes can be formed and altered through the integration of new information in the midst of

existing cognitions or thoughts (Wang et al., 2012). Carlson and White (2008) describes IIT as

the ways in which people accumulate and organize information to form attitudes toward an

assortment of concepts including individuals, objects, situations, or ideas. According to IIT, each

significant piece of new information formed has two qualities: value and weight (Wang et al.,

2012). Value can be favorable or unfavorable and weight can be measured as a result of its

overall importance so therefore new information acquired from those new pieces of information

will ultimately affect attitudes, but don't replace existing attitudes (Wang et al., 2012). Thus, the

fundamental concept of the theory is built around stimulus integration (Carlson and White, 2008)

and the integration processes describes several diverse stimuli being united and organized in

order to determine an overall response (Anderson 1974; Anderson 1991). The foundations of

information integration theory can be linked to the field of psychology (Carlson and White,

2008), although Wang et al. (2012) recent study on co-branding between luxury brands and

retailers also adopts the use of this theory. This follows earlier studies that have examined

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specific aspects of consumer attitudes using IIT (Bettman et al., 1975; Herrmann and Wricke

1998; Smith 1993). IIT has contributed to resolving a variety of methodological and theoretical

problems, in addition to unifying several lines of thought previously isolated (Shanteau, 1985).

"Much of the research examining attitude formation and change can be directly applied to the

field of marketing and consumer behavior" (Carlston and White, 2008, p.1), which in this case

can be linked with brand extension strategies such as co-branding. Hence, the theory adds to the

overall conceptual framework of this study and has been applied in a vast array of research areas

ranging from personality impression formation and attitude change to psychophysics and decision

making (Anderson, 1968; Shanteau, 1985; Simms, 1978). IIT allows the authors to develop a

unified theory of judgment and behavior as a result of co-branding between luxury brands and

high-street brands. In the case of brand alliances, one brand is presented in the context of another

brand which will likely result in consumer judgments about the alliance being predisposed to

prior attitudes towards both brands, and then judgments about each brand is subsequently

affected by the context of the other (Simonin and Ruth, 1998). Looking at generational cohorts Y

and X, similar life experiences that represents each individual group has been said to cause them

to form similar attitudes and beliefs (Meriac et al., 2010). Ultimately, this results in differences in

characteristics developed (Kupperschmidt, 2000). For example, past research posits that

generation Y consumers respond to brands in ways that are unseen (Phau and Cheong, 2009;

Bakewell and Mitchell, 2003) and describe this segment as more comfortable with brands than

previous generations (Merrill, 1999). In addition, Phau and Cheong (2009) study discovered that

young status consumers may be willing to substitute luxury brands for step-down line extensions.

Therefore, contrasting beliefs, expectations, views and consequently behavior acquired through

life (Lancaster and Stillman, 2002; Dries et al., 2008) suggests both generation cohorts attitudes

will differ in the aftermath of co-branding ― with generation Y likely having a more positive

attitude towards co-branding than generation X.

H1: The attitude towards co-branding is more positive for generation Y than for generation X.

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2.3 Brand Equity

Brand equity can be seen as a key issue in marketing (Bull et al., 2013) and ultimately building a

strong brand with considerable equity can assist in equipping a firm with a host of benefits

(Keller, 2001). Keller (2001) also suggests actual benefits include greater customer loyalty and

less vulnerability to brand extension opportunities in addition to other beneficial examples. Thus,

brand equity can be defined "as the set of brand assets and liabilities linked to the brand, it is the

name and symbols that add value to, or subtract value from, a product or service to a firm or to

that firm's customers” (Aaker, 1991, p.15). Keller (1993, p.2) proposes a comparable meaning

which can be characterized as the differential effects of brand knowledge in relation to the

consumer reaction to the brand. Aaker’s (1991) definitions has been widely accepted in past

research (Buil et al., 2013) and the notion of a brand as a representation of values has been

accompanied by accepting that branding adds value to a company through the creation of brand

equity (Aaker,1996; Barwise, 1993; Keller, 1993, 2000; Olins, 2000; Srivastava et al., 1998).

In addition, research also proposes that brand equity may contribute in consumers' choice to

purchase certain brands over other competitors (Swait et al., 1993), and firms understanding of

brand equity can assist in creating effective marketing strategies (Keller, 1993). Subsequently,

Swait et al. (1993) suggests that brand equity can play a central role in explaining the nature of

brand and line extensions, which this study also deems important to explaining the act of co-

branding. In the situation of luxury and high street partnerships, a well-known brand name

(luxury) is paired with another brand name (high-street) which can help enhance the lesser known

composite product. At the same time, co-branding comes with many risks and Washburn et al.

(2000) notes that the risk lies in one partner damaging the existing products strong equity which

in this case the authors refer to the luxury brand equity post-co-branding. Therefore, as suggested

by Rao and Ruekert (1994), brand names ultimately indicate quality to customers because

customers believe that firms that do not live up to their quality claims will face negative

repercussions (Washburn et al., 2000, p.4). So, Luxury fashion goods (in this case brands) seen as

perfect examples of “symbolic consumption” goods due to associations of high quality,

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exclusivity, high price, and social visibility (Giovannini et al., 2015, p.5) can face being exposed

to such risks as a result of co-branding negatively influencing equity.

A number of researchers are aware of the relationship that exists between the brand management

and customer management perspectives (Ambler et al., 2002). Thus, recognizing the value of

brands as intangible assets further emphasizes attempts to better understand how to build,

measure, and manage brand equity (Kapferer 2005; Keller 1993, 2003). Keller and Lehman

(2006) recommend that to manage brands properly, marketers should have a holistic

understanding of the equity that exists within brands. Initial studies focused on brand equity from

the consumer behavior perspective which emphasized the “consumer response to the marketing

of the brand” (Keller, 1993, p.8). However, despite the broader principal perspectives extension

of brand equity (financial-based and company-based), consumer-based brand equity has been

adopted and deemed appropriate for this study. Also utilized by Washburn et al. (2000), this

allows for the examination of how generation cohorts’ perceptions of brand alliances (in this case

luxury to high-street) affect their attitudes towards the luxury brand based on brand equity

dimensions.

Consumer-based brand equity has been built around brand equity dimensions of measuring

awareness, attitudes, associations, attachments and loyalties consumers ultimately have towards a

brand (Keller and Lehmann, 2006; Bull et al., 2013, p.116). This perspective is grounded on the

earlier conceptual framework of both Aaker‘s (1991) brand equity and Keller‘s (1993) consumer-

based brand equity theories (Cho, 2011, Bull et al., 2013). According to Aaker (1991), five

measurement components of brand equity have been identified which includes brand loyalty,

brand awareness, perceived quality, brand associations, and other proprietary brand assets. In

contrast, Keller's (1993) conceptualization model acknowledges brand knowledge which involves

two key components highlighted: brand awareness and brand image (Bull et al., 2013). Based on

these theoretical proposals, a large number of studies have also measured brand equity utilizing

brand awareness, perceived quality, brand associations and brand loyalty (Cobb-Walgren et al.,

1995; Yoo et al., 2000; Yoo and Donthu, 2001; Washburn and Plank, 2002; Ashill and Sinha,

19

2004; Pappu et al., 2005; 2006; Konecnik and Gartner, 2007; Tong and Hawley, 2009; Lee and

Back, 2010).

As a result, following onwards from both widely adopted approaches by Aaker and Keller and

from all previous studies, this paper will espouse the independent consumer-based brand equity

variables of perceived quality, brand image and brand loyalty. Brand awareness will not be

presented in this chapter but yet it will not be omitted in the paper, as it is not going to be tested

but it sets the premise of the data collection process.

2.3.1 Perceived Quality

Consumers hold many attitudes towards brands, but the most important relates in various ways to

the perceived quality of the brand to consumers (Keller, 2001). Perceived quality can be defined

as a "global assessment of a consumer's judgment about the superiority of a product or a brand"

(Zeithaml , 1988, p.4). Aaker and Keller believed perceived quality from a branding perspective

can be identified both by consumers’ perception of overall quality and an intangible, overall

feeling about the brand (Hsu et al., 2011, p. 83). In this study, the authors associate the quality

offered solely to luxury brands and not the product. In addition, as part of brand responses in

Keller (2001) model, other recognized attitudes that can be associated with quality include the

perception of value and satisfaction experienced by consumers. Perceived brand value is shown

to be relatively more important when it comes to luxury brands because consumers

acknowledged purchasing luxury brands that they linked with perceived sufficient value that

countervail higher price points (Chung et al., 2014). Though, research from Aaker and Keller

(1990) postulates that quality perception can be seen as one of the consumers’ evaluations

determinants towards brand extensions, which in this study relates to co-branding. Perceived

quality can also link to the credibility a brand has with customers that is built on trust worthiness

as well as other sub-constructs (Keller, 2001). Corporate credibility can be seen as how far

consumers believe that a company is willing and able to deliver products and services that satisfy

needs and wants (Keller and Aaker, 1992, 1998; Erdem and Swait, 2004). From a consumer

perspective, according to Wiedmann et al. (2007, 2009) luxury brands can satisfy functional

20

needs related to value added which can be attributed to quality or uniqueness gained by products

(in this case brands). Subsequently, consumers will transfer the quality perception of the original

brands (luxury and high-street) in the brand alliance extension creating either positive or negative

associations (Sujian, 1985) or attitudes. Considering both generation Y and X, results from

Hennigs et al. (2012) suggests millennials can be identified as cosmopolitan in terms of luxury

value perception suggesting that they perceive the same driver of luxury value as other

customers. Taking into account the relationship between brand prestige and its perceived quality,

if generation Y’s consumers believe a brand is represented by prestige, they expect it to be of a

higher quality (Esmaeilpour, 2015) similar to that of generation X customers. This supports past

research that proposes "one of the reason consumers buy luxury brands is for superior quality

reflected in the brand name" (Hanzaee et al., 2012, p.2). In addition, past research on status

consumption of generation cohorts concluded that although their differences in the level of status

consumption by individual cohorts, differences didn't reach a significant amount between

generation Y and X (Eastman and Liu, 2012). Therefore the effects of co-branding in the

aftermath will be likely comparable for both generations in regards to the perceived quality

towards the luxury brand.

H2a: Attitude towards co-branding of luxury brands with high-street brands has a direct

influence on luxury brands’ perceived brand quality.

H2b: Attitude towards co-branding of luxury brands with high-street brands has a similar

influence on luxury brands’ perceived brand quality for generation Y and generation X.

2.3.2 Brand Image

According to Keller (1993), one way that successful brands build and maintain a positive

relationship with customers is through developing a favorable brand image. This can also be

applied to luxury brands and to their consumers. As a component from the brand knowledge

conceptualization, brand image can be defined as the perceptions that consumers associate with a

particular brand (Keller, 1993) usually in some meaningful way (Yoo and Donthu, 2001).

Another view of brand image sees it as consumer‘s perceptions and feelings reflected towards a

21

brand formed by direct and indirect encounters, which is represented by cognitive, sensory, and

emotional aspects (Cho, 2011, p.21). In looking at both generations, although preserving high-

end images towards older generations has been deemed essential for luxury brands, past research

suggests that brand image has a greater significance for generation Y consumers due to their use

of brands for self-expression (Lippe, 2001; Belk, 1985). The brand image of fashion products (in

this case fashion brands) is shown to hold significant influence over consumers who utilize the

richness and symbolic meaning of brands to express self-identity (Bearden and Etzel, 1982;

Escalas and Bettman, 2005). Prior research has also indicated brand image as a strong component

(Esch et al., 2006) and showed indirect positive effects of brand image linked to purchase

intention for apparel brands (Kim et al., 2009). Thus, consumers are more probable to obtain

fashion brands that assist them in creating a desirable image (Escalas and Bettman, 2005).

O’Cass and Frost (2002, p. 82) study of young status conscious consumers, discovered that

younger generations “are more likely than older generations to be affected by a status brand’s

symbolic characteristics, by feelings evoked by the brand and by the degree of congruency

between the brand-user’s self-image and the brand image.” In addition, Lazarevic (2012)

suggests that for younger generations the brand image must be something that they want to be

associated with as a result of a variety values held (Fernandez, 2009) which includes social

consciousness. In contrast, generation X consumers are characterizedas non-conformist

(Portolese Dias, 2003) and consider brands as not reflecting their identity or personality (Lager,

2006). This shows that differences in brand ideals and priorities ultimately affects how both

generation cohorts place the importance of brand image. Therefore, as luxury products (brands)

provide esteem and a sense of prestige to the holder (Nia and Lynne Zaichkowsky, 2000), co-

branding spillover effects can ultimately alter the brand's image perceived by the consumers of

luxury brands weighing favorably or unfavorably ― specifically more so with generation Y.

H3a: Attitude towards co-branding of luxury brands with high-street brands has a direct

influence on luxury brands’ brand image

H3b: Attitude towards co-branding of luxury brands with high-street brands has stronger

influence on luxury brands’ brand image for generation Y than generation X

22

2.3.3 Brand Loyalty

Aaker (1991, p. 39) defines brand loyalty as "the attachment that a customer has to a brand."

Other research has described brand loyalty as a mixture of favorable beliefs and attitudes for a

particular brand (Keller, 1993; Oliver, 1999) which involves repeat purchase behaviors over time

(Aaker, 1991) irrespective of changes in price or product features (Reisenwitz and Gupta, 2011).

Brand loyalty can be separated and characterized in terms of attitudinal and behavioral

perspectives (Dick & Basu, 1994; Keller, 2001). From a behavioral perspective loyalty can be

associated with the actual action of re-purchasing brands (Yang and Peterson, 2004; Lee and

Back, 2009; Chahal and Bala, 2010). Whilst, from an attitudinal perspective loyalty links to

strong cognitive elements (Chahal and Bala, 2010) which ultimately leads to affective loyalty

over time and not just limited to single purchases (Bandyopadhyay and Martell, 2007). Both

loyalty perceptions are essential for both generation Y and X customers as behavioral loyalty

alone is not enough to explain buying the same brand in different circumstances and therefore

must be assisted with a positive attitude or attitudinal loyalty (Esmaeilpour, 2015). Thus, brand

loyalty can be seen as kind of a affective commitment (Kumar et al.,1994), and Hansen and Hem

(2004) indicates high affective commitments to brands could create a long lasting relationship

transpiring between consumers and brands. Past research shows that when consumers acquire

more positive perceptions towards a brand, loyalty subsequently follows (Oliver, 1999). Keller

and Lehmann (2003) research illustrates brand associations and perceived quality as the previous

steps leading to building brand loyalty. Keller’s (1993, 2001) study also recommended that a

strong link existed between a positive brand image and brand loyalty (Cho, 2011, p.52).

Therefore, high levels of perceived quality and positive associations combined with brand image

can enhance brand loyalty (Keller, 1993; Chaudhuri, 1999; Keller and Lehmann, 2003; Pappu et

al., 2005). Looking at both cohorts, generation Y consumers have been shown to present a

particular challenge due to their resistance to traditional marketing efforts in addition to being

difficult to capture and retain as loyal consumers (Bush et al., 2004; Megehee et al., 2003;

Wolburg and Pokrywczynski, 2001). Foscht et al. (2009) discovered that feelings of loyalty

amongst younger consumers were greatly associated solely to just repurchase intentions. In

23

addition, research identifies generation Y as notoriously disloyal to brands (Sebor, 2006; Wood,

2004; Syrett and Lammiman, 2004) in contrast to generation X consumers who have been

deemed as very loyal and committed to brands (Richie, 1995). Therefore, generational

differences in attitudes and behavior related to loyalty shown from existing studies suggest that in

the case of co-branding generation X are less likely to be affected and will still remain loyal

towards the luxury brand.

H4a: Attitude towards co-branding of luxury brands with high-street brands has a direct

influence on luxury brands’ brand loyalty.

H4b: Attitude towards co-branding of luxury brands with high-street brands has stronger

influence on luxury brands’ brand loyalty for generation Y than generation X.

24

3 Opperationalization and Conceptual Framework

In this chapter the variables that were explained during the literature review are shaped into a

model representing the proposed influences. In addition, some items for the survey are selected,

following the line of the variables in the model.

3.1 Conceptual Framework

This model shows how the attitude toward co-branding will have an influence over the brand

equity dimensions that were relevant for this study. In addition, as a moderator, the generations Y

and X were included proposing that the attitudes towards co-branding will have a different effect

on the brand equity components for generation Y and X as well as showing differences between

both groups. This ultimately is down to differences in values, characteristics and behavior

(Gurău, 2012) adopted amongst both groups. Hence, looking at generation Y and X attitudes

towards co-branding, a difference in perception can be shown regarding both brand image and

brand loyalty towards the luxury brand in the aftermath of a co-branding strategy. Whereas, in the

case of perceived quality towards the luxury brand, attitudes to co-branding can be expected to

have a similar influence for both generation cohorts.

25

Figure 1: Framework

26

3.2 Operationalization

Variable Variable

definition

Operational

definition

Items References

Attitudes

toward

co-branding

(Co-

branding

and IIT)

One brand is

presented in the

context of another

brand which will

likely result in

consumer

judgments about

the alliance being

predisposed to

prior attitudes

towards both

brands, and then

judgments about

each brand is

subsequently

affected by the

context of the

other (Simonin

and Ruth, 1998)

How do the

consumers

perceive the

co-branding

between a

luxury and

an non-

luxury brand

is positive,

good or fits

ACB1: I think it is

positive that a luxury

brand can reduce

prices sometimes

through co-branding

with high-street

brands

ACB2: I think it is

positive that a luxury

brand can be sold in

any store through co-

branding with high-

street brands

ACB3: I think that co-

branding is useful for

me

ACB4: I am in favor

of co-branding

ACB5: I have a

positive attitude

towards co-branding

(Besharat,

2010)

Perceived

brand

quality

(Brand

equity)

Perceived quality

can be defined as

a "global

assessment of a

consumer's

How are

affected the

standards

and

credibility of

PQ1: I believe this

brand will still have

the same quality

standards, even after

co-branding

(Keller,

2001;

Besharat,

2010; Aaker,

2009 and

27

judgment about

the superiority of

a product or a

brand."

a luxury

brand post-

co-branding

on the

consumer’s

mindset

PQ2: I don’t care

about seeing this

brand widely

available through co-

branding

PQ3: I think that this

brand is still credible,

even after co-branding

PQ4: I trust that this

brand is still good,

even after co-branding

PQ5: I think that the

general quality of the

brand will not be

affected by co-

branding

Jung et al.,

2014)

Brand

image

(Brand

equity)

Perceptions that

consumers

associate with a

particular brand

(Keller, 1993)

usually in some

meaningful way

(Yoo and Donthu,

2001)

How is the

post-co-

branding

image that

the consumer

would have

of a luxury

brand

BI1: I think it is good

that the brand can be

identified through co-

branding

BI2: I would still

perceive the brand to

be exclusive, even

after co-branding

BI3: I would still

show that I purchase

this brand to others,

even after co-branding

BI4: I think the brand

has not lost its

sophistication through

co-branding

BI5: I think it is good

that everybody could

(Giovannini,

Xu, and

Thomas,

2015 and

Eastman and

Liu, 2012)

28

afford this brand

through co-branding

Brand

loyalty

(Brand

equity)

Aaker (1991, p.

39) defines brand

loyalty as "the

attachment that a

customer has to a

brand.'' Other

research has

described brand

loyalty as a

mixture of

favorable beliefs

and attitudes for a

particular brand

(Keller, 1993;

Oliver, 1999)

How endures

the

consumer’s

loyalty after

a co-

branding on

a luxury

brand

BL1: I will not think

about switching to

another brand after

co-branding

BL2: This brand

remains special to me,

even after co-branding

BL3: I will continue to

buy this brand, even

after co-branding

BL4: I still identify

myself with this

brand, even after co-

branding

BL5: I would still

recommend this

brand, even after co-

branding

(Keller,

2001;

Besharat,

2010 and

Choi et al.,

2010)

Table 1: Operationalization

29

4 Method

The methodology chapter aims to explain the research approach, design, method and process in

addition to establishing the guidelines or criteria for the analysis.

4.1 Research Approach

In this quantitative study, the aim of the researchers is to explore the new perception shown by

generation cohorts of generation Y and generation X when a co-branding strategy has taken place

between a luxury brand and a high-street retailer towards the luxury brand.

A deductive approach is used when primary data is explored by researchers through means of

theories (Saunders et al., 2007). The researchers used this approach as they selected suitable

theories for this research in order to collect their primary data. Testing the relationships between

theory and research is the main focus of deductive research (Bryman, 2016). Therefore, to

explore the perceptions by the generation cohorts towards co-branding strategy, the selected

theories were used to find the hypotheses of this research.

4.2 Research Design

The research design works as a guide for the research linking every aspect of the research with

the research purpose (Aaker et al., 2011). The main goal of descriptive reserach is to describe

something that gives insight into a particular part of the research field, which is founded on past

research (Malhotra and Birks, 2007; Malhotra, 2010). It is characterized as pre-planned and

structured, that clearly defines the needed information for the research by formulating specific

hypotheses and research questions (Malhotra and Birks, 2007).

As this study is based on prior theories and research, the researchers opted to use a descriptive

design. Considering this design allowed the researchers to plan and formulate research questions

and hypotheses to collect specific information that answered the research purpose.

30

4.3 Data Sources

For the conducted research, primary as well as secondary data was collected. The researchers

collected primary research data through the use of street face-to-face surveys. On the customer’s

perspective, this gave the researchers insight into their varied perceptions towards co-branding

strategies between luxury brands and high-street retailers. This primary data is collected in one of

the world’s largest cities for luxury goods: London, U.K. (JLL Real Views, 2015) which has

great fashion equity (Breward and Gilbert, 2006). The value of the luxury market in London

rounded €10 billion in 2015, partly thanks to the attraction of consumers from all over the world

due to a visa simplification policy for luxury consumers (JLL Real Views, 2015). The well-

grounded perception of London as one of the top four global fashion capitals as well as

destinations for fashion week shows makes it the perfect field to conduct this study and target our

population (Godart, 2012, p.51, and 2014; The Global Language Monitor, 2016).

The secondary data came from a variety of sources. This data enriched the research regarding the

current luxury fashion landscape and included current as well as prior fashion co-branding

collaborations.

4.4 Population and Sample

The population and sampling are one of the most important issues of a research since they will

determine partly the error (Aaker et al., 2011; Malhotra, 2010). The population can be defined by

a number of characteristics that all the elements involved in the purpose must have. While the

sample is always smaller and it defines the actual target of the research, in other words, that part

of the population that is going to be studied (Malhotra, 2010).

Since the luxury fashion consumers are so dispersed in the world, the research takes place in one

of the most important markets in luxury fashion: London. In fact, because London is known for

its attraction of luxury consumers worldwide, it is going to be selected as one of the population

delimitations. Hence, the population of this study is luxury fashion consumers that belong to the

generations Y and X that purchase luxury brands in London.

31

In addition, the data gathering is going to be conducted in a department store in London, where

several fashion luxury products and brands are sold to the consumers that belong to our

population. Therefore the sample of this study is consumers of the generations Y and X that are

purchasing luxury brands within the department store Harvey Nichols in London.

Also, due to the dispersion of the population, probability sampling techniques could not be used,

specifically the simple random sampling, since not all the elements of the population have the

same probability to be selected. Therefore, the sample is going to take the form of convenience

sampling which consists on the selection of the respondents because they are in the place at the

time in which the data is gathered (Malhotra, 2010). That place, for this study, is going to be the

department store Harvey Nichols, situated in London.

4.5 Data Collection

4.5.1 Data Collection Instrument

The study of human perceptions is a complicated issue. There are certain methods used to explore

what people think, feel and perceive. Some of the most popular methods are focus groups, in-

deep interviews or surveys. The different approaches provide something different that will be

appreciated in different kinds of studies. In this case, the purpose of this research is descriptive

which is usually related to quantitative research (Malhotra, 2010).

The most popular quantitative research method is the use of surveys also known as

questionnaires. Some of the positive characteristics of the questionnaire are the convenience, the

cost-efficiency (Malhotra, 2010), the time efficiency, the variety of places they can be conducted

at, the respondents’ anonymity and the closed number of questions (Gray, 2014). Surveys can be

taken in a variety of forms, such as being self-administered, web-based, face-to-face, etc. (May,

2011; Malhotra, 2010). The characteristics that define the form of the survey in this study are

computer based, street interviewing, face-to-face, and with closed questions (Malhotra, 2010).

These characteristics allow for the gathering of standardized data whilst at the same time the

interviewer can observe the physical and verbal reactions of the respondents to the issues

32

included (May, 2011). It will also take place where the population can be found which provides

more convenience to the respondents but might limit the number of questions to ensure an

appropriate response rate (Gray, 2014).

As can be seen in the operationalization, most of the items included in the survey were directly

related with the theoretical chapter and these items were transformed into constructs to be tested

on the regression analysis. In addition to all of those items, the survey also includes a question

about the age group that would categorize the consumers on generations to be compared. Since

there might be more information not included directly on the theory that affects how the main

constructs operate, this study includes also a number of control variables to complete the picture.

These control variables are: the attitude towards the luxurious brand chosen (ALB), the income,

the distance of the residence, and their luxury purchase history (LPH).

4.5.2 Data Collection Procedure

The questionnaire was conducted in a luxury fashion department store in London, called Harvey

Nichols. Consumers shopping in the store were selected, approached and then were explained to

how the survey was composed of four different steps to follow. The first step consisted on

choosing a luxury brand from the department store. It could be the one they are purchasing, they

like better, or maybe one of the brands that were given as examples. This step continued with the

control variable about their attitude toward that brand. On the second step, the consumers were

introduced to co-branding and on their survey they could see some written and illustrated

examples of co-branding between luxury brands and high-street brands. With these examples in

mind, the consumers were asked to express their attitude toward co-branding strategies. On the

third step, the consumers were asked to imagine that the brand they have chosen was

collaborating in a co-branding strategy with a high-street brand. At this step, some high-street

fashion retailers with which luxury brands could collaborate in London were mentioned to avoid

misleading the respondents. The questions that were answered during this step were the ones

related to the brand equity variables after the co-branding had occurred. The fourth and final step

was simply composed of personal questions such as sex, income, age, etc.

33

The data collection process concluded with 121 answers from different respondents from which

119 were effectively used on the analysis since they belonged to the generations Y and X. The

detailed information of these respondents can be found on the analysis and results chapter.

4.5.3 Pre-test

The pretest or pilot testing is a common method to identify and eliminate potential problems

(May, 2011; Malhotra, 2010). Their utility relies on the way data is gathered with a survey, which

once launched the problems cannot be solved (Gray, 2014). It is usually composed by a small

representative sample of the population. To get the best results out of a pretest, it is usually

recommended to conduct the survey face to face, so that way the respondents can explain their

thoughts or problems properly (Malhotra, 2010). In addition, it is usually recommended to study

the results of the pretest to ensure the proper construction of the survey for the study (Malhotra,

2010; Gray, 2014).

The pre-test was conducted in the same department store that was selected for the study and it

included 8 respondents. The results of the pre-test showed that the wording of some questions

could be improved for two reasons. The first reason was related to the comments of some

respondents that did not completely understand what was being asked, specifically the older

consumers. The second reason was that some items that should have a strong correlation did not

show it, which led the researchers to assume and conclude that the wording was misleading.

4.6 Quality Criteria

The quality criteria can be studied from two different perspectives: the validity and reliability.

Both perspectives are related to the method used in the research, which in this case is a face-to-

face survey with a closed-answer questions approach.

This paper examines the three kinds of validity in a questionnaire: content, criterion and construct

validity. The content validity examines if the scales are adequate to describe the items, the

criterion validity examines if the scales work or behave as expected, and finally the construct

34

validity examines if the items cover the entire construct (Malhotra, 2010). To ensure the validity

of the survey, researchers are supporting the items and constructs with a theoretical background

in addition to conducting a pre-test that allows testing the behavior of the items and their

adequacy to the constructs.

According to Gray (2014), reliability ensures that what you are measuring today is not going to

change if you measure it tomorrow, assuming that the object of the measurement stays the same.

To ensure the reliability of the constructs this research applies the Pearson’s r and the Cronbach

Alpha. This statistic studies the strength and direction of the correlations between the variables in

the questionnaire (Robson, 2011). According to Brace et al., (2012), the r can take positive and

negative values from 0 to 1, which as a general rule, from 0 to 0.2 is considered weak, from 0.3 to

0.6 moderate and from 0.7 to 1 strong. But usually this strength alone is not enough by its own,

and the significance of the statistic is also taken into account (Brace et al., 2012). In addition, the

Cronbach Alpha studies the reliability as the share of the validity in the responses that are the

result of differences between the responses. Therefore, high reliability will be achieved with

alpha values over 0.8. if the value is between 0.6 and 0.79 the reliability is moderate, while lower

is unacceptably low (Cohen et al., 2011).

4.7 Data Analysis Method

Attitudes are the way people picture and structure a certain topic to establish the way they

respond to it (Aaker et al., 2011). The best way to evaluate attitudes and feelings is through

Likert scale which consist on choosing a certain point between two opposite options such

agree/disagree, like/dislike or favorable/unfavorable (Aaker et al., 2011; Malhotra, 2010). The

Likert scale is a close-ended ordinal kind of scale that allows a numerical approach since the

values of the scale are related to a degree in which the respondent identifies with a statement

(Dillman et al., 2009). The convenience of this scale resides precisely in the fact that the

numerical approach behind it does not tire the consumers as much as other methods and allows it

to be analyzed with a variety of quantitative methods (Robson, 2011).

35

Once the data was collected the scale items of the questionnaire were transformed into construct

using the factor analysis and, in the case of the attitudes towards co-branding, a construct was

also extracted from the average of the items. The factor analysis is a method to reduce the

number of variables transforming the original items into one or more uncorrelated new variables

called factors. The factor analysis is usually applied with the principal components analysis and a

varimax rotation method to ensure the adjustment form the old to the new variables (Aaker,

2011). As this paper has pre-selected the items that are shown in the operationalization, this

method was used exclusively to reduce the number of variables and with no exploratory

purposes. Therefore, the items from each construct were included separately in the analysis which

made it not necessary to use the varimax rotation (Robson, 2011). The number of factors selected

from each construct of items was determined by the K1 rule. K1 establishes that the final number

of factors depends on how much separate information they contain. This information is shown in

the eigenvalues that must be over one to include the factor (Field, 2013). In order to evaluate the

quality of the new factors, the measure in which the original variance is represented by the items

or the total variance explained (Robson, 2011) according to Cohen et al., (2011), is satisfactory

when it reaches approximately 60%.

This paper is going to use two quantitative methods to test the hypotheses: the regression analysis

and the analysis of variance or ANOVA. In regards to the regression analysis, it is a statistical

technique that allows the prediction of the value of one variable basing it on the values of other

variables, and describing whether there is a relationship that exists between them (Brace et al.,

2012; Malhotra, 2010; Aaker et al., 2011). It is composed of a metric dependent variable, which

is the one to be predicted, and one or more independent variable that are the ones to predict the

dependent variable (Brace et al., 2012; Malhotra, 2010). The linear regression analysis allows

testing the significance of the influence of the independent variables on the dependent variable, in

general and one by one. It also permits to see the adequacy of the independent variables to

explain the variation of the dependent variable (Aaker et al., 2011).Apart from the dependent and

independent variables, some control variables were included in the regression analysis in order to

complete the general picture and add more insight. The process followed by the regression

36

analysis includes two different outputs of models. The first model shows the control variables

influence on the regression since the independent variable is not included. The second model

shows the same regression with the independent variable augmenting the percentage of variance

explained. This procedure raises the relevance of the independent variable since when it is

introduced, the change in the R squared can be observed (Aaker et al., 2011).

The other analysis used which is the analysis of variance, explores the differences between the

means of a scale variable included under different conditions established by the cases of an

ordinal variable (Robson, 2011). The dependent variable in this case will be the ordinal used for

grouping while the independent is the scale variable (Malhotra, 2010). When the dependent

variable compares only two cases, it is recommended to use a two-group t-test as it has the same

premise as the general ANOVA but limits the groups (Robson, 2011).

37

5 Results and Analysis

This chapter exposes the results of the research through tables and it analyzes them according

to the previous research which was gathered in the literature review, either accepting or

rejecting the previously formulated hypotheses.

5.1 Descriptive Data of the Respondents

Table 2: Descriptive Data of the Respondents

38

The total number of responses gathered was 121, from which 119 were used to draw the

conclusions of the study. The two left out respondents belonged to a different generation cohort

than Y and X. Looking over all the respondents, the majority are male with 67 responses and 54

females. The large majority was employed by someone else (74.4%), the second largest group

being the self-employed (16.5%), and also a majority of those individuals admitted to earn

between 15,000 and 29,000₤ per year (54,5%) and are living in London (79.3%).

In addition, the consumers were asked about the number of purchases they make per year which

showed that our sample is distributed almost equally: 30,6% of the respondents admitted buying

luxury fashion rarely, other 33.9% occasionally and a 30.6% very often. Moreover, only 5% of

the respondents only purchase luxury fashion on rare occasions, such as for weddings.

5.2 Factor Construction

Table 3: Component Matrix with Eigenvalues and Total Variance Explained for each Factor.

39

In order to create the constructs that were used in the study, a factor analysis was performed The

factor analysis joined all the items together in one variable that conserved the individual

information. The selection of the number of factors from each one of the constructs was made by

the K1 rule, when the eigenvalues were bigger than 1 it was accepted as a valid new factor. It can

be seen in table 3 that all the eigenvalues stop being over 1 after one step, leaving all the

constructs as one only factor. Also, some information was lost, especially in the perceived quality

and brand image since the correlations between those variables were more modest. Nonetheless,

the results with total variances from approximately 60% are satisfactory. The other main

variables, attitude toward co-branding and brand loyalty are very well represented with an

explanation of the variance greater than 70 and 80%.

5.3 Reliability

Table 4: Cronbach’s Alpha for the factors

The results of the reliability test with the Cronbach Alpha show that all the items are reliable and

therefore, the answers in the survey from different respondents were satisfactorily different.

Although, in the case of the brand loyalty factor, the percentage can be seen as too big due to the

extremely different answers.

40

Table 5: Correlations between the Constructs, Pearson’s r.

When taking a look at the correlations of the constructs. All dependent variables are significantly

correlated to each other and to the independent variable of attitudes towards co-branding with a

0.000 p-value score. Brand image shows the strongest correlations with the rest of the factors,

being 0.704r with attitudes toward co-branding, 0.737r with perceived quality, and 0.753r with

brand loyalty. The rest of the correlations found between the constructs were on a moderate level,

between 0.3 and 0.6, as proposed by Brace et al., (2012). These results show an overall strong

reliability and permit the researchers to continue with further research on these results.

41

5.4 Hypotheses Testing

5.4.1 Attitudes towards Co-Branding between the Generations Y and X

Table 6: Attitudes toward Co-Branding descriptive and t-test for Generations Y and X.

A t-test of average differences was conducted using the two generation groups as the dependent

variable and as the independent variable the attitudes towards co-branding. The results

unexpectedly show that the consumers from generation X have higher attitudes towards co-

branding than the consumers from generation Y, rejecting the H1. Moreover, the difference of -

0.393 is significant.

It can also be pointed that the average of the attitudes towards co-branding with the 119

respondents from generations Y and X (3.36) is close to the center of the scale (3). This means

that in general, the attitudes towards co-branding can be considered as neutral or slightly positive

in the sample of this study.

42

5.4.2 Attitudes towards Co-Branding’s Influence on Perceived Quality

Table 7: Regression 1. Influence of ACB (f) on Perceived Quality (f).

The standardized coefficient β (0.604) in the second model of the table 7 shows that there is a

direct influence between the attitudes towards co-branding and the perceived quality. It is a

significant influence since the p-value is lower than 0.001. This result supports the statement of

the hypothesis H2a, meaning that the greater the attitudes towards co-branding is by the

43

consumers, the greater they will perceive the quality of the luxury brand after the co-branding.

But it also means that when the consumers have a bad attitude, the quality will be perceived as

lower.

In addition, the R square suffers a great increase from the first to the second model, displaying

the importance of the attitudes toward co-branding. The final adjusted R squared from the second

model is 0.369 which shows that there are more factors affecting the perceived quality that are

not explored in this paper. Regarding the control variables, only the residence (coded according

to the distance) is significant at 90% meaning that the people who travelled for shopping have

different attitudes and perceptions. Since the influence has been proven to be direct, the attitude

towards co-branding will decide if the associations to the perceived quality are positive or

negative.

44

Table 8: Regression 2. Influence of ACB (f) on Perceived Quality (f) between Generations Y and

X.

Knowing that the perceived quality is affected directly by the attitude that the consumers have

towards co-branding, the next step is to understand how this influence works on the different

generation cohorts. The hypothesis H2b proposed that the perceived quality towards the luxury

brand was going to be equally affected by the attitude towards co-branding for generation Y and

generation X. The results show that in fact that generation X consumers are affected more in

terms of perceived quality when co-branding has taken place. However, with a difference

between the generation cohorts’ standardized coefficients that is less than 0,2, the researchers

deemed that the difference is not strong enough to claim that the generation cohorts are

experiencing the influence in a different way. Therefore accepting the hypothesis of equality.

45

5.4.3 Attitudes towards Co-Branding’s Influence on Brand Image

Table 9: Regression 3. Influence of ACB (f) on Brand Image (f).

On these three regression models with brand image as the dependent variable we can see how the

influence of the attitude towards co-branding is larger than in the previous cases with perceived

46

quality. In addition, the R squared of the second model is better than in the previous case and

shows that almost half of the relevant factors to explain the consumers’ brand image were

included in the regression. Coincidently, based upon the results of the standardized coefficient β

(0.710), the researchers conclude that there is a direct influence between the attitude towards co-

branding and the brand image of luxury brands, accepting H3a. So, if the consumers' attitude

toward co-branding is negative, it leads to a more negative brand image.

No conclusions can be drawn about the control variables apart from the fact that they are not

significant to explain the model. In addition, the adjusted R squared is greater than for perceived

quality showing that the variation of the brand image can be explained better by co-branding than

in the previous case.

Table 10: Regression 4. Influence of ACB (f) on Brand Image (f) between Generations Y and X.

47

Continuing with the analysis on the influence of co-branding on the brand image of the luxury

brand, the exploration of the generation cohorts showed that the standardizedβ coefficients were

0.643 for generation Y and 0.792 for generation X. Regarding the adjusted R squared, both

cohorts show that they represent a fine percentage of the estimated regression with the variable

attitude towards co-branding, while the control variables are not significant in any case. The

results over the attitudes towards co-branding are significant and the influence of co-branding on

the brand image is undeniable. Moreover, the results show again that the consumers from the

generation X are more affected by the co-branding strategies, in this case in terms of brand

image. However, the researchers deemed that the difference of 0.149 (<0.2) is not strong enough

to claim that the generation cohorts are experiencing the influence in a different way but rather

similarly. Therefore the researchers reject the hypothesis H3b that co-branding would influence

the luxury brands’ image stronger for generation Y than for generation X.

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5.4.4 Attitudes towards Co-Branding’s Influence on Brand Loyalty

Table 11: Regression 5. Influence of ACB (f) on Brand Loyalty (f).

The researchers proposed in H4a that the attitudes towards co-branding of luxury brands with

high-street brands would have a direct influence on the luxury brands’ loyalty. The third model of

this regression shows a significant standardizedβ coefficient of 0.523 which shows once again

49

that there is a direct influence between the attitude towards co-branding and the brand loyalty.

Also in line with the previous research, this study shows that this variable of brand equity is

effectively the most resistant to change.

The adjusted R squared is also the smallest of this study for all the population. This regression

only explains a 24.8% of the estimated model which means that there are other variables not

explored that might influence the brand loyalty more than the ones included. In fact, none of the

control variables included add any significant information to the regression.

Table 12: Regression 1. Influence of ACB (f) on Brand Loyalty (f) between Generations Y and

X.

Once again, knowing that there is a direct influence between the attitudes towards co-branding

and the brand loyalty on luxury brands, the exploration of the generation cohorts shows

50

differences on that influence. In this case there is a difference greater than 0.2 between the

standardized β coefficients of generations Y (0.405) and X (0.658), which are both significant.

The researchers deemed that this difference of 0,253 is strong enough to claim that the generation

cohorts are experiencing the influence in a different way. This means that the brand loyalty of the

older consumers will suffer a greater change than on the younger consumers, if the attitude

towards the co-branding strategy suffers any change. Therefore, the researchers reject the

hypothesis H4b that co-branding would influence the luxury brands’ loyalty stronger for

generation Y than for generation X.

In addition, the results showed a poorer adjusted R squared for the generation Y than for the

generation X since on the first model only 11.2% of the variability of the model is represented,

while in the second model 42.9% is represented. This means that there is a need of more

variables to explain the brand loyalty for generation Y because the variables introduced do not

achieve a satisfactory level. In addition, in both cases, the contribution to the model of the control

variables is not significant.

5.4.5 Hypotheses Acceptance

As a conclusion for the results and analysis, the hypotheses that have been tested are shown

below in table 13.

Hypotheses Acceptance

H1 The attitude towards co-branding is more positive for

generation Y than for generation X.

No

H2a Attitude towards co-branding of luxury brands with high-street

brands has a direct influence on luxury brands’ perceived brand

quality.

Yes

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H2b Attitude towards co-branding of luxury brands with high-street

brands has a similar influence on luxury brands’ perceived

brand quality for generation Y and generation X.

Yes

H3a Attitude towards co-branding of luxury brands with high-street

brands has a direct influence on luxury brands’ brand image

Yes

H3b Attitude towards co-branding of luxury brands with high-street

brands has stronger influence on luxury brands’ brand image

for generation Y than generation X

No

H4a Attitude towards co-branding of luxury brands with high-street

brands has a direct influence on luxury brands’ brand loyalty.

Yes

H4b Attitude towards co-branding of luxury brands with high-street

brands has stronger influence on luxury brands’ brand loyalty

for generation Y than generation X.

No

Table 13: Hypotheses Acceptance

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6 Discussion

The discussion of the results aims to answer the research questions, summarizing the results and

analysis and creating a common perspective from all the hypotheses. Furthermore, this chapter

explores the common results in depth to give reasonable answers to the accepted or rejected

hypotheses.

The objective of this study was to focus on consumers in London that purchase luxury fashion

products, in addition to looking at consumer attitudes towards co-branding strategies and how it

influences specific brand equity variables of the luxury brand. Therefore, two main questions

were posed regarding the influence on the brand equity variables in the attempt to understand the

effects of co-branding strategies post-co-branding. The first question asked ‘how does the co-

branding strategy at the luxury fashion market influence consumers’ brand equity dimensions

towards the luxury brand?’, the answer to this question was addressed by the hypotheses H2a,

H3a and H4a which were answered individually in the results and analysis. The general

conclusion was that all of the brand equity dimensions seem to be directly influenced by the

attitude the consumers have towards co-branding. It can be pointed out that the highest influence

of co-branding on the brand equity dimensions occurs on brand image, the second on perceived

quality and the third and the most resistant to change, was brand loyalty. This influence shows

that a bad attitude towards co-branding will lead to negative influences on the brand equity and

equally a good attitude will lead to positive influences. The individual results from the conducted

research are confirmed by past research. In the case of perceived quality, Sujian (1985) defends

that consumers transfer their perceptions of quality of the original brands in the brand alliance

extension creating positive or negative associations and attitudes. When looking at brand image,

Kim et al. (2009) highlighted indirect positive effects of the brand image linked to purchase

intention of apparel brands. Finally, for brand loyalty, Oliver (1999) establishes that when

consumers acquire more positive perceptions towards a brand, loyalty subsequently follows.

The second question asked ‘how does the co-branding strategy at the luxury fashion affect

differently the consumers’ brand equity dimensions towards the luxury brand between

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generations Y and X?’, the answer to this question is not as clear as the previous answer since the

researchers have discovered that the influence does not go in line with previous research in some

cases. The results and the congruence is different for each brand equity dimension. Firstly, in the

case of perceived quality, the influence that attitudes towards co-branding has on the luxury

brand demonstrates that this variable behaves as expected, showing that both generations Y and

X perceive the quality in a similar way. As a result, this means that no differences were shown

between both generation cohorts regarding the influence of co-branding on their perceived

quality which is in line with the results of Hennigs et al. (2012) similar conclusion.

Secondly, the attitudes towards co-branding also showed no differences in the case of brand

image towards the luxury brand for the generations Y and X. This result was unexpected because

as proposed by Lippe (2001) and Belk (1985), the consumers from younger generations are more

likely to be influenced more by the brand image for self-expression. Furthermore, as proposed

earlier in this paper, generation Y consumers evaluate brand image as something they want to be

identified with (Lager, 2006). This is contrasting with the characterization of generation X

consumers, who are viewed as non-conformist (Portolese Dias, 2003). The results show that the

attitudes towards co-branding has a stronger effect on the brand image than the rest of the brand

equity dimensions, which was expected especially considering the kind of brands evaluated. This

strong effect was anticipated in particular for generation Y but as the results of the t-test show,

generation X consumers have more positive attitudes towards co-branding than what was

projected. This could have led them to be more influenced in regards to the effects of co-branding

on brand image than expected as. In addition, the only control variable that is significant on the

regression model for generation X, was residence which was coded by the distance that the

consumers had travelled to shop in London. Hence, a possible explanation from this result could

be that a larger proportion of the consumers from generation X that responded to the survey were

from other places than London. Therefore, potentially resulting in different patterns than those of

the locals.

Finally, the attitude towards co-branding only shows an effective difference for generations Y

and X when it comes to brand loyalty. However, against what was expected from this influence,

54

generation X is the consumer group that is more affected. The theoretical background supported

the idea that consumers from generation X are more loyal and committed to brands (Richie,

1995) and that loyalty was the brand equity dimension that was harder to achieve but also more

resistant to change (Kumar et al., 1994; Hansen and Hem, 2004; Keller and Lehmann, 2003).

Traditionally, consumers from generation Y are seen as less loyal (Bush et al., 2004; Megehee et

al., 2003; Wolburg and Pokrywczynsky, 2001; Sebor, 2006; Wood, 2004; Syrett and Lammiman,

2004) but in the case of the luxury fashion industry, it seems that this loyalty is more resistant to

change than for generation X. The effects on brand image and perceived quality experienced by

both generation cohorts might be the cause of this result in loyalty, since Keller (1993) proposes

that high levels of perceived quality and positive associations combined with brand image can

enhance brand loyalty. Given that the results of the research show that the consumers from

generation X were influenced slightly more by co-branding on perceived quality and brand

image, this could possibly explain why they also experience a stronger influence on the brand

loyalty. In addition, previous research shows that consumers from generation Y and X have

different perspectives of brand loyalty. For consumers of generation Y the loyalty is based on

repurchase (Foscht et al., 2009), while the consumers from generation X show more commitment

to the brands they are loyal to (Richie, 1995). This difference is also likely to produce differences

in the way the different generation cohorts are affected by the co-branding strategy, in terms of

brand loyalty. This can be supported by the R squared of the models, which show that generation

Y needs more variables apart from attitudes towards co-branding to explain their brand loyalty.

In conclusion, the influence that the co-branding strategy has on the brand equity of a luxury

brand seems to not be so dissimilar for the consumers of generations Y and X with the exception

of the brand loyalty, which has shown to be more resistance to change for the younger

consumers.

In all, it can also be added that the results show a medium level on attitude toward co-branding

for both generations which indicates that the effect that this variable has on the luxury brand’s

brand equity would be neutral or slightly positive. So in this case, since the coefficient is not

bigger than 1, it should be pointed out that the effect of the attitude towards co-branding itself is

55

not as strong as the effect on the brand equity dimensions. This means that every change in

attitude towards co-branding will approximately have a fraction less stronger impact on the

perceived quality of the brand. Consequently, the effect of the co-branding on the brand equity

for the sample would be reduced but still be positive. Additionally, it would be more positive for

the consumers of generation X than for those that belong to generation Y, since they have

significant differences in attitudes towards co-branding.

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7 Conclusion

The conclusions will consist of the review of the purpose of this paper, summarizing once again

the results into the main resolutions that can be extracted from them.

Through the purpose of this paper, the researchers sought to understand the consequences or any

spillover effects that a collaboration strategy with a competitor from a lower product category

segment would have on luxury fashion brands in the aftermath of the partnership. Therefore the

researchers conducted a series of analysis that proved that the attitudes towards the co-branding

strategies influence directly the brand equity dimensions, proving that it is possible for a luxury

brand to suffer a spillover effect through these collaborations with high-street retailers. In fact, as

this study did not focus on any luxury brand in particular and the attitudes towards the brands

chosen by the consumers are very positive, the effect would closely depend on the partnership

and can be generalized for all the luxury fashion brands. Therefore, the partner chosen will

determine the success of the co-branding for the luxury brand. If the consumers see the co-

branding as positive, the direct influence will lead them to have a more positive consumer brand

equity. Alternatively, a poorly chosen partnership will lead the consumers to perceive less

quality, be less loyal and specially, perceive a worse brand image towards the luxury brand.

This paper also sought to compare generation Y and X in terms of the effect from their attitudes

towards co-branding on their consumer-based brand equity for a luxury brand. The researchers in

this case repeated the analysis separating both generation cohorts and discovered that there were

less differences between them than expected. The consumers from generations Y and X suffered

approximately the same effects on their brand image and perceived quality towards the luxury

brand after the co-branding strategy had occurred. Although, the consumers from generation X

were slightly more influenced on both brand equity dimensions, the researchers deemed that the

difference was not significant enough. The third brand equity dimension, the brand loyalty

showed also higher values for the generation X, but in this case the difference was deemed

significant enough to consider that the generation X suffers a considerable stronger effect than

generation Y.

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Therefore, knowing that the influence will be direct in any case and that the consumer-based

brand equity from both generations is similarly affected by the attitudes towards co-branding on

the dimensions of quality and image, it can be said that the most differential factor is the brand

loyalty. The brand loyalty is perceived in a completely different way by the different generation

cohorts and although the attitudes towards co-branding is a significant factor to describe this

dimension, generation Y requires more insights to fully be understood and explained.

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8 Managerial Implications

This section presents implications for this field of study with recommendations for managers and

marketers.

From a managerial and marketing perspective several implications arose, based on the results.

Brand Managers of luxury brands and senior management within luxury fashion companies and

groups that might want to consider a co-branding strategy should carefully appraise potential

trade-offs between complementarity of features and of fit in brand associations with constituent

brands partnering up. A defining characteristic of luxury brands is the need to maintain a high-

end image; so therefore controlling it should be a priority for luxury brands (Wang et al., 2012).

This can be achieved in the co-branding strategy by targeting brands that share the same level of

image and prestige. As a result, consumer attitudes are more likely to remain positive and brand

equity antecedents are less likely to be affected with negative spillover effects.

In addition, brand managers, marketing managers and retailers should also be attentive to the

effects that co-branding strategies or any brand extension strategies might have on consumers'

perceptions of brand equity dimensions. All steps should be ensured to preserve and maintain the

brand equity of high-end fashion brands in order to secure customer loyalty. Therefore, choosing

a strong brand with great equity is necessary and vital in order to secure a successful brand

alliance.

This research also looked at both generation cohorts of Y and X, which marketers and managers

need to have a keen understanding of both consumer groups. Our research suggests that

generational cohort is a more useful segmentation technique for marketers than utilizing just

gender, income, or education, as there are significant cohort differences that exist (Eastman, and

Liu, 2012). Consumer perceptions of brand loyalty from the results, in the aftermath of co-

branding, are a good example of differences that do exists among both generations. Although,

generation cohorts can also be used to identify similarities in behavior and attitudes which this

paper exhibits with the results of perceived quality and brand image.

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In all, the results of this study suggest that marketers in the luxury fashion segment need to

understand perceptions of their clientele prior to any brand strategies that might take place in the

future. Managers and marketers must also be able to understand luxury brands elasticity which

can be overstretched easily with a brand strategy that does not consider the effects on consumer-

based brand equity variables. Therefore, all luxury fashion managers need to be cognizant of the

way in which cohorts perceive goods and services (Hauck and Stanforth, 2007). This study

ultimately suggests that generation X cohorts are more likely to be sensitive than generation Y in

regards to a co-branding strategy taking place, which is important for marketers to recognize.

60

9 Limitations and Further Research

Out of the method, analysis and results of this paper, this chapter will expose its own limitations

and propose further research in this area according to them.

As with any research, several limitations are common which therefore must be addressed. Firstly,

a quantitative research approach was employed in this study with a face-to-face survey that had a

limited sample and number of questions. This may not offer satisfying in-depth information

regarding attitudes and may not provide an accurate reflection on consumer-based brand equity

variables measured. Further studies should include new variables and stronger constructs. Also, a

multi-methods approach combining both quantitative and qualitative perspectives could be an

alternative to explore further research results. This could ultimately provide deeper insights and a

rich implication into the effects of a co-branding strategy experienced by the consumers

represented by generation cohorts of Y and X.

Secondly, this research decided to focus on three variables of consumer-based brand equity.

Future research can implement as well as examine additional antecedents of consumer-based

brand equity from both Aaker and Keller. This might include variables such as brand associations

and awareness, depending on the research in question. In addition, luxury goods literature also

postulates that in contemporary times, consumers are placing less emphasis on the functional

value of luxury products/brands and alternatively place an emphasized degree of weight on the

emotional values and social values when it comes to owning desired luxury products (Jackson

and Shaw, 2004). This is also corroborated by Ko et al. (2010) research which concluded that

consumers tend to purchase luxury products by relying on their emotional and social needs.

Therefore, luxury brand marketers are now taking advantage of the emotional attachment to boost

a long-term and sustainable customer relationship (Orth et al., 2010). As a result, potential

research opportunities might also want to include brand attachment based on Keller and Lehmann

(2006) measurements of consumer-based brand equity which ultimately can be linked with the

emotional value developed between consumers and luxury brands. Social influence as an

61

independent construct should also be considered as it might influence attitudes and behavior

towards co-branding or any form of brand extension strategies.

Thirdly, the sample of respondents can be shown as relatively biased due to the gender ratio

which is represented by more males than females. In addition, the majority of the sample was

from London which reduces the cultural perspectives of the study. Harvey Nichols is also only

one department store and it may not represent all the luxury consumers in London. There is also

an age bias as the sample consisted of a majority of generation Y participants than generation X

participants. In looking at age, the authors also recommend that additional studies examine other

generation cohorts. The findings in this study shows less of a significance in differences between

the individual cohorts of Y and X in regards to brand equity variables. In which case, the authors

suggest conducting a comparison between generation Y and the prior generation to X, the Baby

Boomers (born between 1946 and 1964), in which the differences could potentially be more

prevalent and extensive (Norum, 2003; Schewe et al., 2000). Reisenwitz and Iyer (2007) raises

the importance of this older generation stating that these consumers have money, are willing to

spend it, and luxury for them is about aristocracy as well as high price points (Giovannini et al.,

2015). Therefore, exploring the disparity that exists between baby boomers and generation Y

groups possibly could be of interest for researchers and could potentially assist in providing more

valuable insights (G. Fowler et al., 2014) to co-branding studies.

In all, this paper adds to current research on co-branding and offers an interesting direction that

can further steer this topic in the right path. Future research can look at analyzing other

perspectives of brand equity like company-based and financial-based brand equity. Additionally,

although this study discusses potential spillover effects of co-branding, further research can also

examine how luxury brands can avoid, mitigate or minimize potential negative spillover effects

that could affect brand equity dimensions. The authors also suggest future research include both

prior attitudes of brand equity as well post-co-branding attitudes of brand equity to show the level

of differences either positive or negative formed. This can go a step further to include analyzing

the later effects of co-branding from the luxury brand perspective. This can be achieved through

62

administering a longitudinal study which would measure long-term effects on attitude toward

luxury brands in the case of an implemented co-branding strategy.

This research was also conducted within the luxury fashion sector. As mentioned earlier in the

background, the overall luxury industry is comprised of nine segments in total (Bain & Co.,

2014) and therefore the findings within this paper cannot be used to generalize other luxury

products and goods. As a result, the authors call for future research to look at other luxury

products and goods that have used co-branding strategies in a similar way.

This leads the authors to recommend future research on co-branding strategies between luxury

brands and high-street to look at cultural differences. Wang et al. (2012) research on the effects

of co-branding strategy and consumers’ evaluation of the luxury brand’s image also highlights

cultural differences that reflect consumers’ evaluation of luxury brands. Such cultural differences

that exist might affect attitudes towards co-branding and ultimately have a distinctive impact on

consumer-based brand equity variables. Therefore, more research is required to extend to other

cultural contexts, as past research indicates that consumers’ motives for luxury consumption vary

across different societies (Wang et al., 2010).

Lastly, the authors recommend that further research looks at the other oligarchy of fashion

capitals such as Milan, New York and Paris (Breward 2003). Furthermore, research on co-

branding (and potential differences between generational cohorts) might want to look into the

effects of co-branding in developing countries like China (Shanghai), Brazil (São Paulo) and

India (Mumbai) which could be useful as developing countries may be good markets for luxury

brands now (Eng and Bogaert, 2010). For instance, China's large population and surging

consumer buying power, prevails as an attractive market for luxury brand names (Wong &

Ahuvia, 1998).

63

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Appendices

Appendix A - Descriptive Statistics

Table 14: Descriptive Statistics