Branding Strategy
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Introduction
The studies of co-branding strategy and brand equity have become increasingly important in recent years for both academics and practitioners. Co-branding as a marketing strategy has made plenty of successful examples. Project Fusion was created by Adidas and Polar Electro, which integrated heart rate and speed and distance monitoring equipment into sports apparel. Aston Martin and Nokia collaborated to produce the Nokia 8800 in 2006 (Bloomberg, 2012). Coach offered several Lexus models in leather interiors in late 1990s. BWM paired with James Bond in movie Golden Eye in 1995. Co-branding is everywhere today. Broad categories of products and services have been infiltrated through customer-based products. Co-branding extended now to industries ranging as hotels, restaurants, fashion, charities, cosmetics and household products. As new, unexpected and innovative partnerships, co-branding increases brand awareness and reinforces brand image. Both the product quality and lifestyle are reinforced for the desirable perceptions of customers in co-branding.
The purpose of this study is to determine the factors affect the customer based brand equity in co-branding, to investigate how different types of brand alliance affect consumers perception of both parent brands and composite brand and to provide information that will help identify these problems.
Co-branding
The manufacturers of consumer products increasingly interested in co-branding strategies with other partners and relied on co-branding to gain more marketplace exposure in order to fend off private label brands and share enormous promotional costs. Nonetheless, consumers attitudes toward co-brands concerned brand managers. Based on the research by Simonin, consumers attitudes toward brand alliances affect subsequent attitudes toward the separate brands. The alliance significantly affected the engaged brands in previous studies and research. By combining existed brands to create new brand or co-brand, the positions of previous brands and co-branding strategy played an important role in the favorable of the created brands (Washburn, Till and Priluck, 2000).
There is currently no universally accepted definition of co-branding. The initial literature of co-branding and brand alliance was published around 1990s. With broadly definition, co-branding can be described as any paring of two brands in a marketing context such as productions, promotions, advertisement and so on. (Leuthesser et al., 2002) Park gave a relative narrow definition of co-branding as paring two or more branded products (constituent brands) to create a single, unique product (composite brand) (Park et al., 1996). For Blackett & Boad (1999), co-branding is a form of co-operation between two or more brands with significant customer recognition, in which all the participants brand names are retained.
We adopt Parks definition of co-branding in our research. The term “co-branding” will be used interchangeably with “brand alliance” in this paper.
There are many different types of co-branding strategic include:
1. Joint promotion or advertising, which partner brands simply involved in the promotion of complementary use. (Blackett & Bond 1999, p9) for instance the co-operation between McDonalds and Disney
2. Ingredient co-branding which involves a physical integration of the products, in which one product cannot be used or consumed without the other (Rao & Ruekert 1994), for instance the co-operation between IBM & Intel, Coca-Cola & Nutrasweet.
3. The two companies development a new products which integrated both of their core competencies (Cooke 2000), for instance, Nike + ipod
Based on the research by Simonin(1998), customers attitudes toward brand alliances affect subsequent attitudes toward the separate brands. The previous studies have indicated that the brand alliance has significantly affected the engaged brands.
Brand equity
In the 1980s, the brand equity concept first appeared, and got much attention from managers, epically for the marketing manager, also brand equity was widely used in business strategy among almost every industry. However, todays brand managers concern in developing the better understanding of the appropriate relationship between brand strategies and brand equity. Brand equity has gained extremely attentions in marketing and many definitions of brand equity exist. There are various definitions regarding brand equity. One of the most widely accepted definitions for brand equity is the added value endowed by the brand to the product (Taylor, Celuch and Goodwin, 2004). Before, the term of brand equity was acknowledged as a financial and economic measurement of brand value (Aaker 1991), whereas the contribution by Keller on Customer-Based Brand Equity stated that consumers participate in brands value creation. Recently, Heding et al. made a comprehensive review of the development in the field of brand equity, which contains an overview of the various approaches to brand equity.
As mentioned, brand equity has been examined from two different perspectives – financial and customer-based. (Lassar et al.,1995) We are going to discuss the customer – based brand equity in this article. Kamakura and Russell (1991) has defined customer-based brand equity as the differential effect of brand knowledge on customer response to the marketing of the brand.
After reviewing the previous literature, we found that brand equity has been measured in various ways: tock price analysis (Simon and Sullivan, 1990); price premiums (Aaker, 1991); equalization price (Swait et al., 1993); modeling (Kamakura and Russell, 1993); brand loyalty analysis (Feldwick, 1996).
Since our research is focus on the customer-based brand equity, we adopted Aakers (1991) five dimension (brand loyalty, brand awareness, perceived quality, brand associations and other proprietary brand assets) to measure the brand equity in our article.
Hypothesis
As the brand names are valuable assets, they may be combined with other brand names to form a synergistic alliance in which the sum is greater than the parts (Rao & Ruekert 1994), more and more companies use co-branding strategic to reduce risks (Aaker 1991; Washburn et al., 2003) associated with launching a new product, and to improve market positions, share the expensive promotional cost (Leuthesser et al., 2003) with a partner. Co-branding remains a prevailing strategy even when firms suffer from an economic crisis because