The Effect of Co-Branding on the Brand Equity of Constituent and Composite Brands

Before and After Trial

Judith H. Washburn, Bowling Green State University

Brian D. Till, Saint Louis University
Randi Priluck, Seton Hall University
Paul D. Boughton, Saint Louis University

Abstract

Branding strategies have become increasingly important to both marketing academics and
practitioners in recent years. This research focuses on an emerging and popular branding strategy for
consumer products - co-branding. Through an experiment, we investigated the impact of co-branding on
consumers' brand equity evaluations of both the co-branded product and the branded products that
comprise it.
Our contention is that a product's brand equity can be affected by the company it keeps or the
brands with which it is associated. The purpose ofthis research is to study the effects of co-branding on the
brand equity of both the original branded products and the resulting co-branded product, both before and
after product trial. We define co-branding for this research as pairing two or more branded products
(constituent brands) to form a third, unique product (composite brand) (Park, Jun and Shocker 1996).
While other types of co-branding strategies are used in practice, the strategy under consideration in this
research is physical product integration whereby one brand is inex1ricably linked with the other (e.g.,
Ruffles potato chips joins with K. C. Masterpiece barbecue sauce flavoring) (Rao and Ruckert 1994 ).
Brand equity is "a set of brand assets and liabilities linked to a brand, its name and symbol, that
add to or subtract from the value provided by a product or service to a firm and/or to that firn1's customers
(Aaker 1991, p.15)." It is the value of the brand name that has the potential of being extended either in the
form of line extensions or in conjunction with other brand names as in co-branding (Rao and Ruekert
1994). Brand equity may play an import~mt role in co-branding when a well-known brand nan1e is paired
with another brand name (either well-known in its own right or less well-known) in order to enhance the
lesser-known product. The general theory on line extensions is that the brand equity of the original brand
will help the line extension gain favor in the eyes of consumers and charmel members (Swait et al. 1993).
Co-branding is believed to limit the marketer's risk of entering into a new product category.
Our analysis suggests that co-branding is a win/win strategy for both co-bnmding partners
regardless of whether the original brand is perceived by consumers as having high or low brand equity.
Although it appears that low equity brands benefit most from co-branding, high equity brands are not
denigrated even when paired with a low equity partner. Further, positive product trial may enhance
consumers' evaluations of co-branded products, particularly those with a low equity constituent brand. Our
research suggests that co-branding strategies may be effective in exploiting a product performance
advantage or in introducing a new product with an unfamiliar brand name.

References

Aaker, David A 1991. Managing Brand Equity. New York: The Free Press.

Park, C. Whan, Sung Y oul Jun, and Allan D. Shocker. 1996. Composite branding alliances: an
investigation of extension and feedback effects. Journal of Marketing Research 33 (4): 453-466.

Rao, Akshay R., and Robert W. Ruekert. 1994. Brand alliances as signals of product quality. Sloan
Management Review (Fall): 87-97.

Swait, Joffre, Tulin Erdem, Jordan Louviere, and Chris Dubelaar. 1993. The equalization price: a measure
of consumer-perceived brand equity. International Journal of Research in Marketing 10 (March):
23-45.

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