chapter  11
17 Pages

Co-branding Alliances

Co-branding, co-partnering, or dual branding are all terms to refer to the act of presenting two established brand names, owned by different companies, simultaneously to customers. Such tactics have made inroads into nearly every industry, from automotive and high-tech Internet fi rms to banking and fast food providers. Co-branding alliances constitute a weapon for fi rms as they attempt to transfer the positive associations of their partners’ products or brands to the newly formed co-brand, or composite brand, create synergy between existing brands, or even build up (or change) an existing brand. This avenue draws in new customers, increases brand awareness, supports customer loyalty, offers signals of quality and an image of success and binds the brand with certain emotions. Although a co-branding strategy thus can be a win-win proposition for alliance partners, even when those brands have unequal standing or brand equity in the marketplace, co-branding alliances present their own set of unique risks. For example, actions by one partner fi rm may damage the other’s reputation, established co-brands are diffi cult to dismantle, and brand spillover effects may be distributed unevenly across the partners. This tension – between reaping the benefi ts of co-branding and simultaneously protecting fi rms from negative repercussions – confronts alliance managers with a unique challenge. Therefore, our fi rst section discusses this co-branding alliance challenge and the following section elaborates mechanisms for dealing with it. We use the alliance development framework to develop managerial guidelines for co-branding alliances in the third section, and conclude with a summary and a case illustration.