Co-Branding: Advantages and Disadvantages

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First and foremost, although there is no universally accepted definition of co-branding, Leuthesser, Kohli and Suri (2003, p. 36) have defined co-branding as "the combining and retaining of two or more brands to create a single, unique product or service".

Co-branding strategies are increasing used to fend off heavy competition and to gain more marketplace exposure (Spethmann & Benezra 1994). The main advantages are that companies can pool together their resources, reduce the cost of production introduction and generate greater sales (Kolter et al. 2006, p. 408; Samu, Krishnan & Smith 1999, p. 57).

Co-branding also allow brands with lesser reputation to leverage on partner brands of higher reputation. The presence of higher quality brands reinforces the perception of quality to their partner brands (Rao, Qu & Ruekert 1999, p. 266). Levin, Davis and Levin (1996, pp. 298-299) in a taste-test study reported that there were improvement in product evaluations of unknown brands when a well-known branded ingredient is added.

Although co-branded products are perceived as processing "the best of all worlds" attributes which capitalize on the unique strengths of each contributing brand (Leuthesser, Kohli & Suri 2003, p. 39). However, the key appeal and success in co-branded products is determined by product complementarity (Park, Jun & Shocker 1996, p. 465).

Despite the increasing applications, the potential disadvantages associated with co-branding strategies are the risks and lack of control in consumers' perception towards the "new" co-branded product (Kolter et al. 2006, p. 408). Mismatch could occur when combining two brands, thus co-branding may affect partner brands negatively (James 2005, p. 22).

In addition, overall brand equity could be damage when consumers attribute any negative experience with one constituent brand (Washburn, Till & Priluck 2000, p. 594). Hence, either partner in co-branding can undermine the credibility of each another, and...
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