Unlikely Marriages: An Examination of Customer-Visible Partnerships Between Prestige Brands and Mass-Market Distributors

Abstract

The prestige goods industry is founded on exclusivity and premium pricing. The challenge for the industry is extracting that premium from the greatest possible number of consumers (the mass-market), while retaining the exclusivity that permits the extraction of that premium. Prestige / mass-market partnerships (PMMP) – one-off, co-branded partnerships between prestige designers and mass-market clothing retailers are increasingly used by participants in the industry to negotiate that precarious balance between volume sales and premium pricing. Exclusivity is the key source of competitive advantage for prestige brands; that exclusivity would appear to be prima facie compromised by undertaking a PMMP. A review of the literature in branding, strategy and organisational research, it was found that none of these schools would direct a prestige partner to undertake a PMMP. Yet PMMPs persist and proliferate in the fashion industry. Either the prestige partners need a new strategy or researchers need a new paradigm, or both. The question is: which is it? This thesis has used a single case narrative to get inside a PMMP through the voice of the designer. It then provided three separate expert readings of that narrative. Those expert readings were found to have some explanatory power in relation to PMMPs but were unable to capture the rich tapestry of drivers on the prestige partner side. The dominant paradigms neglect the entrepreneur as a unit of analysis, over-rely on rational, linear models to explain a phenomenon that defies such categorization, and fail to appreciate the highly-specific context of the prestige fashion industry. iv To achieve this end, the literature on entrepreneurial opportunism was introduced. From the prestige side, PMMPs can be conceived of as four related opportunity events – creative, business, learning and personal. Next, structuration theory was introduced as a means to analyse the context surrounding PMMPs. It was found that the designers is both constrained and enabled by the prestige fashion context; some counter-orthodox behaviour is permitted, and indeed encouraged, but the limits of acceptability are still clearly defined by the community of practitioners. To capture the interaction between the entrepreneur, the opportunity and the context analysis, a model of drivers based on Sahlman’s (1996) PCDO model was proposed. This thesis has found that the drivers motivating prestige designers to enter PMMPs are significantly more nuanced and less linear than convention structure-strategy analyses might wish. Starting with the entrepreneur as the central unit of analysis is the most effective way to capture the range of drivers that stimulate a designer towards a PMMP.