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Limited Edition: Collaborations Between Luxury Brands Alice Fregne, Linnea Björck, Lusiyana Dimitrova

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Limited Edition: Collaborations Between Luxury Brands Alice Fregne, Linnea Björck, Lusiyana Dimitrova Limited Edition: Collaborations between luxury brands By: Alice Fregne, Linnea Björck, Lusiyana Dimitrova Limited edition: Collaborations between luxury brands Alice Fregne, Linnea Björck, Lusiyana Dimitrova Purpose: The purpose of this paper is to see what luxury brands gain from a limited-edition collaboration in terms of segment, positioning and target group and based on the identity prism, see what characteristics that are transferred from and to the brands in the collaboration. Design/methodology/approach: First a literature review is presented with relevant theories for the purpose of the paper. Luxury brands, co-branding, limited edition and brand identity are concepts of interest that are described and analyzed. Multiple case-studies were conducted and analyzed based on secondary data from websites in combination with academic articles and literature to be able to answer the research question. Findings: It is possible to draw some cross-case conclusions regarding reaching a new target group, however, we cannot determine whether this is also valid long-term or just during the collaboration. For two of the cases, a new segment was reached through the collaboration hence creating potential customers for both brands in the future. Regarding the positioning in customers' minds, it is difficult to say without collecting information from them, nevertheless, we can see that some brand characteristics have the potential to be transferred from and to the brands in the collaboration that they can benefit from long-term. Research limitations: The study is based on secondary data; therefore, it is difficult to determine if the limited-edition collaborations affected the brand characteristics from the senders’ side. It would also result in a deeper understanding if it was combined with information from the consumers and how a limited-edition collaboration between two strong brands affect the picture of the recipient in the brand identity prism. Originality/value: This paper offers an insight into unexpected collaborations between very different brands. It can be of value for brands considering creating a limited edition with another brand and what such a collaboration can result in terms of benefits and unwanted consequences. Keywords: Limited edition, luxury, co-branding, brand characteristics. Literature review Introduction Luxury brands With this master paper, we seek to explore There is a distinctive difference between and gain an understanding of the driving luxury brands and premium brands although forces behind limited edition and co-branding premium brands hold some elements of from the perspective of the brands luxury (Kapferer, 2012). Luxury brands have participating in a collaboration. In recent the freedom to set prices at a level that years, collaborations between brands have exceeds its products functional value and gained popularity, especially amongst brand luxury goods can therefore be viewed as with a luxury-positioning (Oeppen & Jamal, priceless (Kapferer, 2012; Kapferer & 2014). Authors before having mainly Bastien, 2012; Vigneron & Johnson, 2004). explored the consumers perspective of co- The aim of luxury brands is to create its branding and collaborations between brands, customers' dreams, not respond to their and a few from the brands perspective existing ones (Kapferer & Bastien, 2012). (Oeppen & Jamal, 2014). Therefore, we Hence, luxury brands are driven by its would like to build this thesis on outcomes of creators and not through customers’ needs collaborations and co-branding for brands in and wants (Kapferer, 2012; Kapferer & the luxury-market. Further, we have chosen Bastien, 2012). Luxury brands can use a step- to focus on collaborations between brands down brand extension strategy that allows which are perceived as dissimilar for them to offer a more affordable aspect or example in consumer-targets, positioning and edition of their products (Shin, Eastman & product-offering. To explore this topic, we Mothersbaugh, 2017). The objectives for this will propose case studies of three could be to increase profitability temporarily collaborations we have found to be of by attracting or targeting customers they interest; Louis Vuitton x Supreme, Dolce & otherwise would not be able to reach, perhaps Gabbana x Smeg and IKEA x Off-White. We because of the price premium luxury brands wish to investigate what happens to the adopt. Regardless of the objectives, a step- respective brand during and after offering down strategy can be realized through co- limited edition products in co-branding. We branding. are going to investigate this through theories regarding brand identity, co-branding and limited edition. From our chosen cases we Co-branding will present similarities and differences Co-branding can be employed by marketers between our chosen case-studies, as well as in an attempt to adopt the existing positive what new characteristics brand achieve from brand-associations of two brands into a new co-branding. We have studied the outcomes co-brand, also called a composite brand. Co- for the corporations in questions and their branding is a path towards creating a strategy gains from collaborations/co-brandings. that both brands gain from, regardless of the perceived brand equity of the consumers; being high or low (Washburn et al., 2000). Research questions Low equity brands are said to gain most from What does luxury brands gain from a limited- co-branding, nevertheless, high equity brands edition collaboration in terms of segment, are most often not downgraded when in a positioning and target group? Based on the collaboration with a partner of lower equity identity prism, what characteristics are (Washburn et al., 2000). In co-branding transferred from and to the brands in the strategy, the valuable brand assets are collaboration? allowed to be combined and leveraged in forming a strategic alliance together with Scarcity to a product can be used as an another brand and its name. From a financial important tool for marketing, which can point of view, this alliance is greater enhance the preference for a brand from the combined than the two brands would be consumers through the product. This can separately (Rao & Ruekert, 1994). ultimately generate an improved brand Continual growth is according to Kapferer evaluation and intention of purchase by (2012) additionally something that can be creating a sense of urgency amongst the achieved from co-branding. Instead of consumers (Shin et al., 2017). While we can acquiring new competencies and the ability conclude that scarcity has a positive effect on to innovate through mergers and acquisitions, the attractiveness of the product from the companies can find a partner with whom they consumer's point of view, this only applies can co-create (Kapferer, 2012). A brands’ when the scarcity is created by supply or identity has limits, and in the growing demand, in other words not randomly (Shin process, a brand can overcome these limits et al., 2017). From a brand management through a partnership and hence fill any gaps perspective, limited edition is created on where the brand is not legitimate or adequate purpose to limit the supply of products to (Kapferer, 2015). Co-branding has become create the illusion of increased and increasingly popular as a strategy within the maintained exclusivity while increasing luxury industry and is not only growth related profit (Shin et al., 2017). Millenials are now the largest consumer-group in luxury goods (Oeppen, Jamal, 2014). Kapferer (2012) provide various reasons for co-branding such and are more interested in the symbolic value as reaching success in a different market, of a good (Shin et al., 2017). Limited edition increase possibilities to communicate with is said to affect brand profits positively and at another target group that might have been the same time increasing competition in price inaccessible due to the brand image or to between the brands (Lee & Wo, 2016). create a buzz around the brands in the collaboration. Brand identity The brand identity prism consists of six facets Limited edition that are related to the brand identity, how it is Customers preference for scarce items can aimed to be perceived by the sender and how result from an increased perceived it is perceived by the constructed recipient. exclusiveness of the product, transmitted to The identity of a brand thus contributes to its the brand (Shin et al., 2017). According to clients' identity and perception of themselves previous theory with regards to scarcity, (Kapferer & Bastien, 2012). The physique is consumers seeks a product more intensively the features that a brand holds that comes to when it is hard to reach or obtain (Shin et al., mind when hearing or seeing the brand name, 2017). By launching a limited-edition but it is also signs, colors and other features product, the luxury brand in question can that are related to a brands physique signal the high quality as well as value to the (Kapferer, 2012). The brand personality is relevant consumers. As a result, from the the character of the brand which is scarcity of a limited-edition product, recognized through communication where consumers can use it to signal their you “get to know the brand”, and the uniqueness and status by possessing the character traits are the same as if it was a limited edition product from the brand (Shin person (Kapferer, 2012; Kapferer & Bastien, 2012). The self-image facet is related to the et al., 2017). brands’ customers feels about themselves when purchasing and using a specific brand (Kapferer, 2012; Kapferer & Bastien, 2012). reach new targets and positions from this. The aspect reflection is related to the This analysis is based on the brand identity perceived client of a specific brand since prism by Kapferer (2012). brands tend to build a reflection of its Three cases in different industries have been customers over time (Kapferer, 2012). chosen for this study, but they are all Culture can be seen as the most important considered premium or luxury brands and part of a brands identity since it is the facet their collaborations has been limited edition where cult is created (Kapferer & Bastien, collections.
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