3 Co-branding between luxury brands and celebrities such as the collabora-
tion of Sean Combs and Estée Lauder; and Samantha Thavasa and
Penelope Cruz.
4 Co-branding between luxury brands and companies in other categories of
goods such as Alexander McQueen and American Express.
These types of co-branding are increasingly gaining acceptance among
luxury brands. However, co-branding should be approached cautiously as it
could have adverse affects on the brand image and brand loyalty. The effect
of co-branding on the consumer ought to be paramount in decisions concern-
ing this strategy. The following tactical guidelines are essential in developing
co-branding strategy in the luxury sector:
- There must be a strategic purpose behind the co-branding activity. In other
words, brands shouldn’t team up without a concrete and significant reason.
When H&M collaborated with Karl Lagerfeld and Stella McCartney, it
was to address the consumers’ changing needs and expose them to luxury
fashion in anticipation of ‘trading up’. - The co-branding should be a win–win situation for the brands involved.
Again, the H&M venture had the advantages of endearing mass fashion
consumers to luxury designs and embracing mass fashion brands as
complementary brands of luxury brands rather than being viewed as
competitors. - The collaboration should be controlled through a limited edition or a one-
off collection. Karl Lagerfeld’s design for H&M was a thirty-piece one-off
collection. This retains the luxury aura of Lagerfeld, which extends to his
own brand and the luxury brands he designs for. It also ensures that H&M
is not misinterpreted by the consumer as a luxury brand, which is not the
company’s objective. - There must be a clear synchronism between the brands in the co-branding
process. Co-branding sometimes involves two brands with different brand
associations. However, the target audience must understand these two
brand messages and be able to see their joint benefit. This benefit must be
favourable otherwise the exercise is pointless. - The co-branding activity must increase the brand equity of the brands
involved. Brand equity is the effect of brand knowledge on consumer
response to the brand. One of its sources is brand loyalty, which is a result
of a psychological process of affiliation and attachment with a brand. Co-
branding should be designed to increase this element in consumers.
Finally, to ensure the success of co-branding, the brands involved in the
venture must communicate the co-brand promise and its differentiated
features in a clear and consistent manner. The brands ought to also enhance
the esteem and loyalty of the customer groups.
chapter 5 171the art of creating and managing luxury fashion brands