Co-Branding: Fit Factors between Partner Brands

Firms are continuously looking for new opportunities to exploit and leverage their existing brands for achieving business growth. In the past, companies have leveraged their most important asset (brands) through brand and line extensions. Nowadays, the most recent trend for capitalizing on brands is called Co- Branding in which two or more brands are presented jointly to the consumer, forming a new product or service offering. This new branding strategy promises many benefits, especially for international operating companies with strong global brands. As the result of the high rate of product failures, the intense competition among companies and the high costs to enter new markets, the use of co-branded products has become increasingly important for brand managers because they provide a way to take advantage of existing brand name recognition and associations. Co-branding came up in the early 90 s and has recently reached an all-time high with annual growth rates estimated at 40 percentages.
This study investigates fit in more detail and tries to find out which factors lead to a perceived fit between two brands by consumers. Given this research purpose the research question of this study can be formulated as follows: Which factors lead to a perceived fit between two partner brands by consumers?
The following sub-questions arise within the attempt to answer the research question: Are there any clear factors that lead to a fit between partner brands? , Are some factors more important than others? , If yes, which?

Autorentext

Peter Zickermann, born 1985 in Hamburg, studied Business Administration & Economics at the University of Passau (Bavaria) and afterwards deepened his knowledge in the field of marketing during his master's at Copenhagen Business School in Denmark. During his academic education, he also took the opportunity to study one semester in California, Prague and Guangzhou (China). Peter Zickermann focused his research on corporate and product branding strategies, especially on the Blue Ocean Strategy and Co-Branding. After gaining practical experience at Siemens, Beiersdorf and Philips, he is now working as a Product Manager for a large international operating company in the FMCG industry.

Leseprobe
Text Sample:
Chapter 2.2.1, Types of Co-Branding:
By following the narrow definition (see 2.1.2), co-branding only consists of two different types:
Ingredient Branding, or sometimes referred to as vertical co-branding or physical product integration, where one brand is the component or ingredient of another brand (most often the final product). Both brands are visible on the product and cannot be used without each other (Simonin & Ruth 1998, James 2006). Examples are Dell computers with Intel processors, Coca-Cola with NutraSweet sweeteners and Adidas training shoes with Goodyear soles (James 2006).
Composite Branding, or sometimes referred to as horizontal co-branding, where two existing brands are combined to form a new product or service, and their names or logos are used together in a combined format (Park, Jun & Shocker 1996, James 2006). Most of the time, partner brands have complementary skills or images, which they transfer and combine into the new offering (James 2006). Examples are Sony (electronics) and Ericsson (telecommunication systems) marketing Sony Ericsson mobile phones together, Nike (sportswear) and Apple (multimedia) launching the Nike Plus sport shoe together, and Acer (computers) and Ferrari (automobile) producing the Acer Ferrari One notebook series together (Besharat 2010).
Co-branded products can appear in product categories, in which both brands are already established (e.g. computers from Dell and Intel), only one brand is established (e.g. notebooks from Acer and Ferrari) or none of the brands are established (e.g. mobile phones from Sony and Ericsson) (Helmig, Huber & Leeflang 2008). Furthermore, co-branding may appear between domestic brands (e.g. between both American Nike and Apple) as well as between international brands (e.g. between Japanese Sony and Swedish Ericsson) (Besharat 2010). Although co-branding mainly appears among consumer goods, it is also relevant for durable goods (e.g. cars) and services (e.g. credit cards) (Helmig, Huber & Leeflang 2008).
2.2.2, Related types of Co-Branding:
There are other co-operative marketing activities, which are in a narrow sense no types of co-branding, but closely related and worth mentioning in this context. The key difference to co-branding lies in the fact, that in these activities no new product or service is created by the brands involved. Furthermore, there is no combined branding on a product or service. This implies, each brand is still perceived as a separate and individual entity. These forms of cooperation are also mostly short-term oriented (Helmig, Huber & Leeflang 2008):
Co-advertising is simultaneous appearance of different brands in one advertisement (Helmig, Huber & Leeflang 2008): Brands are presented jointly to demonstrate compatibility or/and to assist the market entry of a partner brand, which is not so established yet (Samu, Krishan & Smith 1999). Most often, all brands in the advertisement are communicated through a single themed message (Park, Jun & Shocker 1996). Examples are advertisements of Siemens washing machines with Ariel washing powder, Kellogg s cereals with Tropicana fruit juice, or Wasa bread with Du Darfst diet butter (Samu, Krishan & Smith 1999).
Joint promotion is a temporary promotional activity of different brands, in which brands are presented as complementary to one another (Helmig, Huber & Leeflang 2008). In practice, by purchasing one brand, consumers often receive the other brand for free (Simonin & Ruth 1998). Examples are joint promotions of Reebok (sportswear) and Pepsi (soft drink), Smirnoff Vodka and Ocean Spray Cranberry Juice or Campbell s soup and Nabisco saltine crackers (James 2006).
Dual branding means using the same store location (shop-in-shop concept). Most often this strategy is used when two brands/shops have the same target group (Helmig, Huber & Leeflang 2008). A good example is Shell s gas stations which have a Burger King restaurant inside (Levin & Levin 2000).
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