Co-branding

From Wikipedia, the free encyclopedia

Co-branding refers to several different marketing arrangements: Co-branding, also called brand partnership[1], is when two companies form an alliance to work together, creating marketing synergy. As described in Co-Branding: The Science of Alliance:[2]

"the term 'co-branding' is relatively new to the business vocabulary and is used to encompass a wide range of marketing activity involving the use of two (and sometimes more) brands. Thus co-branding could be considered to include sponsorships, where Marlboro lends it name to Ferrari or accountants Ernst and Young support the Monet exhibition."

Co-branding is an arrangement that associates a single product or service with more than one brand name, or otherwise associates a product with someone other than the principal producer. The typical co-branding agreement involves two or more companies acting in cooperation to associate any of various logos, color schemes, or brand identifiers to a specific product that is contractually designated for this purpose. The object for this is to combine the strength of two brands, in order to increase the premium consumers are willing to pay, make the product or service more resistant to copying by private label manufacturers, or to combine the different perceived properties associated with these brands with a single product.

Intent
According to Chang, from the Journal of American Academy of Business, Cambridge, states there are three levels of co-branding: market share, brand extension, and global branding. Level 1 includes joining with another company to penetrate the market Level 2 is working to extend the brand based on the company's current market share Level 3 tries to achieve a global strategy by combining the two brands [edit]Forms There are many different sub-sections of co-branding. Companies can work with other companies to combine resources and leverage individual core competencies, or they can use current resources within one company to promote multiple products at once. The forms of co-branding include: ingredient cobranding, same-company co-branding, joint venture co-branding, and multiple sponsor co-branding. No matter which form a company chooses to use, the purpose is to respond to the changing marketplace, build ones own core competencies, and work to increase product revenues. One form of co-branding is ingredient co-branding. This involves creating brand equity for materials, components or parts that are contained within other products. Examples: Betty Crockers brownie mix includes Hersheys chocolate syrup Pillsbury Brownies with Nestle Chocolate

 Dell Computers with Intel Processors Kellogg Pop-tarts with Smuckers fruit Another form of co-branding is same-company co-branding. This is when a company with more than one product promotes their own brands together simultaneously. Examples Kraft Lunchables and Oscar Mayer meats Joint venture co-branding is another form of co-branding defined as two or more companies going for a strategic alliance to present a product to the target audience. Example: British Airways and Citibank formed a partnership offering a credit card where the card owner will automatically become a member of the British Airways Executive club Finally, there is multiple sponsor co-branding. This form of co-branding involves two or more companies working together to form a strategic alliance in technology, promotions, sales, etc. Example: Citibank/American Airlines/Visa credit card partnership

Brand extension
Brand extension or brand stretching is a marketing strategy in which a firm marketing a product with a well-developed image uses the samebrand name in a different product category. The new product is called a spin-off. Organizations use this strategy to increase and leveragebrand equity (definition: the net worth and long-term sustainability just from the renowned name). An example of a brand extension is Jello-gelatin creating Jello pudding pops. It increases awareness of the brand name and increases profitability from offerings in more than one product category. Product extensions are versions of the same parent product that serve a segment of the target market and increase the variety of an offering. An example of a product extension is Coke vs. Diet Coke in same product category of soft drinks. This tactic is undertaken due to the brand loyalty and brand awareness they enjoy consumers are more likely to buy a new product that has a tried and trusted brand name on it. This means the market is catered for as they are receiving a product from a brand they trust and Coca Cola is catered for as they can increase their product portfolio and they have a larger hold over the market in which they are performing in.

Brand extension failure

Literature related to negative effect of brand extension is limited and the findings are revealed as incongruent. The early works of Aaker and Keller (1990) find no significant evidence that brand name can [23] be diluted by unsuccessful brand extensions. Conversely, Loken and Roedder-John (1993) indicate that dilution effect do occur when the extension across inconsistency of product category and brand beliefs. The failure of extension may come from difficulty of connecting with parent brand, a lack of similarity and familiarity and inconsistent IMC messages. Equity of an integrated oriented brand can be diluted significantly from both functional and non-functional attributes-base variables, which means dilution does occur across the brand extension to the parent

brand. These failures of extension make consumers create a negative or new association relate to [25] parent brand even brand family or to disturb and confuse the original brand identity and meaning.

[24]

Categorisation theory
Researchers tend to use categorisation theory as their fundamental theory to explore the effects of [16][17] brand extension. When consumers are faced with thousands of products to choose amongst, they are not only initially confused, but try to categorise by brand association or image given their knowledge and previous experience. A consumer can judge or evaluate the extension product with his or her category memory. Consumers categorise new information into specific brand or product class label and [18][19] store it. This process is not only related to consumers experience and knowledge, but also [20] involvement and choice of brand. If the brand association is highly related to extension, consumer can perceive the fit among brand extension. Some studies suggest that consumer may ignore or overcome the dissonance from extension especially flagship product which means the low perceived of fit does not [21][22] dilute the flagships equity.

Brand equity
1. Quality of core brand creates a strong position for brand and low the impact of fit in consumer evaluation. 2. Similarity between core brand and extension is the main concern of consumer perception of fit. The higher the similarity is the higher perception of fit. 3. Consumers knowledge and experience affect the evaluation before extension product trail. 4. The more innovation of extension product is, the greater positive fit can perceive.

Brand hierarchy
To help manage a visual identity system strategically, institutions of higher education often call upon a brand architecture model. This model provides a brand hierarchy, starting with the top-level brand for the institution as a whole, then addressing other entities, from schools and colleges to support offices to affiliated organizations. The five categories within the UWMadison brand hierarchy are:

Core brand
The core brand is the top tier of the brand hierarchy, and it represents the institution as a whole. The visual identity for the core brand is the institutional logo, and it should be used on any projects that encompass the full university, such as institutional websites, television spots, annual reports, or strategic plans.

Core brand extension

A core brand extension is an overarching entity that advances the overall mission of the university and aligns very closely with the core brand. At UWMadison, core brand extensions are schools and colleges.

Secondary brand extension

A secondary brand extension is a UWMadison administrative office, support unit, or academic department that supports the overall mission of the university.

Sub-brand
A sub-brand is an entity, such as the Wisconsin Alumni Association or a school/college alumni group, that is linked to UWMadison's core brand for strategic and economic reasons. Its visual identity may incorporate key elements of the core brand (such as theW crest, or official typefaces or colors), but does so in a way that establishes a more independent visual identity.

Independent brand
An independent brand is an entity that presents its connection to the UWMadisonbrand in an understated manner for a variety of reasons. For example, an entity may exist through an equal partnership among multiple universities. The entity may rely upon an external funding source that must be prominently acknowledged. Or an entitys mission may differ significantly from UWMadison's core missions. The Wisconsin Institutes of Discovery is an example of an independent brand.