Towards the formation of
consensus in the domain of
co-branding: Current findings
and future priorities
Author - Ali Besharat, Ryan Langan
Agenda
 Introduction
 Brand management, Architecture, Framework
 Co-Brand Scope and Definition
 Lessons From Co-Branding Success And Failure
Introduction
 Companies often encounter difficulties in their efforts to
introduce new brands. The high cost of establishing new
brands, which suffer failure rates of 80–90 per cent
 As a result, the use of co-branding has grown by 40 per
cent annually. A notable example of this growth lies in the
credit card industry, with 43 per cent of credit cards allied
with at least one other brand (Punch, 2001).
Introduction
 The competition in today’s dynamic marketplace have forced
successful organisations to adopt innovative strategies, such
as brand partnerships, to leverage brand equity
 A co-brand is defined as the placement of two brand names
on a new or perceptually improved product
Brand Management
 One such approach is brand chartering that views branding
as an integrated and innovative business process
 This approach consists of three principal processes
 (i) creating and communicating the brand
 (ii) managing the brand organization
 (iii) directing and structuring the brand
Brand Architecture I
 There are two types of brand architecture that offer a
framework for marketing managers to be able to capitalise on
potentially powerful linkages between brands.
 Brand architecture I involves getting two or more brands
within a company to partner with one another in a way that
creates a synergistic effect (Macrae, 1996).
 For example, a brand such as Kellogg’s is known to have
multiple brands of cereal in their portfolio (for example, Rice
Krispies, Mini-Wheats & Raisin Bran).
Brand Architecture II
 An alternative to managing a portfolio of brands within a
company lies in brand architecture II, the type of brand
architecture a company adheres to is driven by a desire for
a brand associated with power and stature, to a brand
portfolio built around personalization and differentiation
at the other end.
 Brand managers who are considering strategic options for a
particular brand may also choose to ‘leverage their master
brand’ ex: WOWPRIME CORP
Brand management Framework
Co-Brand Scope and Definition
 Broadly, co-branding refers to any pairing of brands in a
collaborative marketing effort (Kapferer, 2012), including
advertisements, services, promotions, public linkages or
distribution outlets
 More narrowly defined, co-branding describes the
combination of two brands to create a single, new product
(Abratt and Motlana, 2002; d’Astous et al, 2007; Kumar,
2005).
Lessons From Co-Branding
Success And Failure
 To further our understanding of co-branding, we turn our
focus to industry for insights into the factors that lead to
successful co-branding initiatives.
 Initiatives of co-brand : value exchange occurs primarily in
one of three ways
 (i) an enhanced product or service
 (ii) an improved brand image and/or
 (iii) access to a new market.
Co-branding value exchange
Product – Crest + Scope
Image - Aston Martin + Nokia
Market - Trek bicycles +
Volkswagen automotive
Co-branding successes
 the Italian label Missoni and Target Corporation caused
the retailer’s Website to crash and store shelves to be
cleared within hours of launching the collection, because of
overwhelming demand
 Target then was able to benefit from this partnership by being
able to bolster their image of offering ‘great fashion for less
money’. Finally, the family-owned brand Missoni brand was
able to gain immediate access to an enormous market
that would have previously been difficult to reach
 Nike’s partnership with Apple
Co-branding successes
 Ice cream products have eagerly embraced co-branding
partnerships with candy and dessert manufacturers. HaagenDaz ice cream entered into a co-branding agreement with
Nestle Toll House.
 Moreover, Breyers’ ice cream offers an array of ice cream
flavours co-branded with such brands as Hershey’s, Oreo,
Twix and Snickers
Co-branding failures
 A co-branding arrangement between Hummer vehicles and
Fly mobile phones
 For Hummer brand loyalists who have come to expect
rugged performance from their brand, the flimsy design of
the Hummer edition Fly phone failed to meet expectations.
Co-branding failures
 A co-branding initiative between the clothing brand DKNY
and the luxury champagne brand Veuve Clicquot
 The DKNY and Veuve Clicquot partnership led to a pair of
designer rain boots, featuring logos from both brands.
 Consumers in this case did not find value in the product at
the marketed price point, nor did they see value in the image
of two brands whose partnership appeared to be ill-matched.
Co-branding failures
 a model of co-branding success between Martha Stewart and
Kmart eroded into a tumultuous relationship.
 Even after the co-branding partnership ended, Stewart publicly
admonished the Kmart brand for the quality of their products
and the atmosphere in their stores
 the challenges of maintaining a value proposition between cobranding partnerships.
 To sum up: a significant, enduring value exchange for each
member in a co-branding arrangement.
Co-branding improves quality
perception of the weaker brand
 Co-branding as a marketing strategy can capitalise on brand
value by making both brands in the alliance look similar in
quality
 Even when product quality is unobservable, allying a brand
with another partner can provide reassurance about the
quality of the first brand and reduce information search
costs (Rao et al, 1999).
Co-branding leverages the brand
attitude towards the weaker brand
 Washburn et al (2000) indicate that buyers can be
conditioned to form favourable impressions about a
constituent, unknown brand in co-branding when they see it
allied with a high-equity partner.
 when customers identify a high-equity brand in a co-branding
scenario, they may use it as a simple decision heuristic to
choose among potential alternatives, some of which do not
include a well-known brand
Co-branding helps an unfamiliar
brand more than a familiar brand
 Well-known, familiar brands typically have developed
associations in consumers’ minds.
 When a brand allies with an almost unknown or less familiar
brand, people tend to extend the association network of
the known brand to the unknown partner (Rao et al,
1999).
Co-branding effectiveness is
determined by the message
content and execution＊＊＊
 Gammoh et al (2006) suggest that the effec- tiveness of cobranding advertising depends on the nature of the
elaboration and availability of information.
 enough information => contrary to the premise of cobranding, target audience rely less on the synergistic
value of the brand partnership.
 when cognitive elaboration is low and the message
contains strong arguments, people follow a peripheral route,
such that the well-known brand serves as the endorser.
Co-branding is a concept that can
be applied to other context
 Dickinson and Barker (2007) suggest that non-profit organisations can ally with commercial partners in cause-related
marketing to acquire financial resources.
 Venkatesh et al (2000) find that co-branding is most attractive
to a promoter if the value and the market strength of both
partner brands are comparable
Does co-branding create a
synergistic effect?
 Park et al (1996) suggest that co-branding creates higher
quality perception about a new product than each
constituent brand does.
 Gammoh et al (2006) argue that highly reputable brands can
transfer their quality perceptions as a signal to another
partner only when consumers are highly involved in their
decisions and the advertising for the co-branded product
contains weak arguments.
Is co-branding assessed
favourably when the images of the
partner brands closely fit?＊＊＊
 Simonin and Ruth (1998) show that fit between the images of
participating brands has a positive influence on cobranding evaluations
 When people are cognitively involved in the evaluation of the
co-branded product, moderately incongruent brands
obtain the best evaluation (cf. low or high congruity), which
produces an inverted U-shaped curve.
Is it always more advantageous to
be the first brand than the second
brand in co-branding?
 Murphy (1988) delineates how a composite concept forms
through the combination of nesting (modifier) and nested
(header) concepts.
 A person is likely to process the nested concept before
combining it with the nesting concept, because doing so
requires less cognitive effort than does a composite
structure.
Does a co-branding strategy have
a positive consequence for both of
the participating brands
irrespective of brand value?
 Supporting this premise, Vaidyanathan and Aggarwal (2000)
argue that a private brand can benefit from a national brand
and there is no negative spillover effect for the well- known
national ingredient brand when they ally.
 Washburn et al (2004) show that low-equity brands benefit
from associating with high-equity brands in co-branding and
do not harm the brand value of the well-known partner.
CO-BRANDING: WHAT WE NEED
TO KNOW IN FUTURE
 Co-branding strategy and financial performance
 Co-branding as a social alliance
 Co-branding and negative spillover effects
 Use of co-branding in emerging markets
CONCLUSION
 Overall, we find that research on the topic of co-branding
lacks clarity and consensus with respect to how co-branding
is defined, its scope and the extent to which it differs from
other forms of brand partnerships.
 We then draw upon this framework to narrow the breadth of
our discussion about what co-branding is, and importantly,
what it is not.