Academic Research学术研究连载

走进中国工业品牌管理与竞争的新常态

Entering into the “IB and HB branding management Era”

                               by Dr. Yang XiaoTong

 Edited by Eric and authorized for release

OVERVIEW-002

In this part, we will further explore how Co-Branding strategy was developed and works in real commercial activities.

2.1.3 How Co-Branding develops

Allowing for continuously intensified market competitions, a growing number of companies tend to follow a more widely accepted marketing strategy that is designed to combine two or more individual brands in marketing the products or services to be offered. This is known as Co-Branding (Abratt & Motlana, 2002). The reason behind this phenomenon is, marketers are in belief that Co-Branding can signal to the potential customers more reliable quality of the products or services it represents, thus realizing higher customer evaluations, larger market shares and higher retail prices (McCathy & Norris, 1999). Besides, another matter taken into account for doing so is to obtain premium value from each of the individual brands and further to create unique competitive advantages to better attract downstream customers (Erevells et al. , 2008). Due to the outstanding effects Co-Branding strategy has on how marketing performs, much more attention from academic world is turned into studying it.

Norris as a scholar is the first one to make model analysis of the potential advantages Co-Branded products or services enjoy, followed by Rao with Rueckert in 1994 and Hillyer with Tikoo in 1995, who took a step forward by studying the influence of Co-Branded products or services on brand evaluations. Realistically, it is possibly in the year 1995 or 1996 when quantified empirical research on Co-Branded products was started. Anyhow, Co-Branding as an important form of marketing is being extensively applied across most sectors. Despite a short history of less than two decades till now, it is attracting more and more attentions from people who make it a priority to study on.

Till now, Co-Branding has seen a wide range of applications in B2C market and a most classic example is the food industry in the US. From brand marketing perspective, Co-Branding applied in industrial market has made it more diversified how host brands are marketed in real business world, which is the cause for more intensified competitions in this field. Co-Branding in this context has become an important part of corporate marketing strategy as percentage of branded ingredient products that are on sale is continuously going up (Prince & Davis, 2002; Cooke & Ryan, 2000; Washburn, Till & Priluck, 2004; Erevells et al, 2008). We have been presently by many Co-Branding related papers different ways of marketing activities being carried out under branding strategy so as to put added value into the products or services that are marketed, such as attraction plan, association marketing, ingredient branding marketing, cooperative promotion, Composite Branding and combined promotional planning etc (Cooke & Ryan, 2000; Rao & Ruekert, 1994; Swaminathan & Reddy, 2000). Furthermore, these ways of marketing are also used to get the best of brand assets by means of increased business performances, further market expansion, raised barrier to market entry, as well as reduced cost burden and business risks (Rao & Ruekert, 1994; Park, Jun & Shocker, 1996, Helmig et al, 2008). According to Rao’s study in 1991, Co-Branding was found to have effect on how the quality of a product is perceived by the customer and continuing with that study, a more forceful conclusion was drawn by McCathy and Norris in 1999 that adoption of Co-Branding Strategy can lead to raised quality as perceived by the customer. Specifically to a brand that is positioned at the low-end market, more positive evaluation of the quality it can present is pragmatically possible after being configured into a high-end brand (Washhburn et al., 2004).

Generally speaking, Co-Branding can be categorized into four (4) different types, which are Ingredient Co-Branding, Composite/Complementary Co-Branding, licensed Co-Branding and Parent Co-Branding (Erevells et al., 2008). Some scholars studying it have another way of doing this by including more sub-categories (McCarthy & Norris, 1999). Regardless of categorization, Co-Branding as a critical part of Branding Strategy is unquestionably of a huge significance to an individual company as to the way corporate marketing is managed.

Allowing for so far the immature study on Co-Branding Strategy applied in B2B market, plus the apparent differences it has from other forms of combined marketing campaigns, a primary goal of Co-Branding being implemented is create barrier to market entry against the present or potential competitors (Hallen et al., 1991; Wilson, 1995). A typical example to demonstrate it is Boeing in collaboration with engine manufacturer GE. As competition within supply chains intensifies, many suppliers around the world have opportunities to compete against each other based on their respective advantages on price and the quality of products (Vandenbosch & Dawar, 2002).

Thanks to the history study on Co-Branding in traditional B2C consumer market, Ingredient Branding is also developing as a more focused subject for further marketing research.

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For contact with the author, please email to shanshan@towermind.com;

For contact with the editor, please email to yangls@skiplifting.com