An analysis of complementary competence co-branding potential in the beer industry.

Abstract

Co-branding, where two or more brands are used to market one new product, has been proposed as a potentially cost effective marketing strategy in highly competitive mature industries. The objective of the study was to evaluate a potential role for cobranding to increase users’ overall brand preference and to stimulate non-users’ brand preference whilst suppressing any existing negative perceptions. In order to do so the research sought to probe how consumers develop and respond to a diverse and complex range of brand associations that result from a co-branding alliance. A unique aspect is that this study incorporates unknown real brands in cobranding alliances and distinguishes between low equity and unknown brands. A convenience sample of 711 business studies students were asked to participate in the research with 331 questionnaires suitable for analysis recovered (a response rate of 47%). They were presented with individual brands and with co-brands incorporating a little known or unknown beer and restaurant/fast food brand with a relatively well known or popular complementary brand to produce an overall consumption solution. The study addresses four important research issues: Firstly, it tests a conventional consumer-based multi-dimensional brand equity scale and demonstrates the limitations and conceptual inconsistencies of this approach. A formatively-indicated measurement scale is developed to measure respondents’ “overall brand preference”. Secondly the method with which co-brand concepts are presented to respondents and how their overall brand preferences are measured is addressed. Two experimental procedures are tested. Thirdly, the effect on overall preference for a co-brand is measured when the original brands are evaluated variously as combinations of high, medium or low overall preference. Finally, the research examines the effect on respondents’ overall preference for a co-brand when a third cause-related modifying variable is introduced. The research supports the findings of similar studies but also records a number of novel contributions. Principally, that when component brands in a co-branding alliance range from unknown to high equity brands, the relationship between the

contribution that a component brand makes to a co-brand is non-monotonic. For example, an unknown brand may improve the overall brand preference for a low equity, known brand. This has important implications in understanding consumers’ behavioural response to co-branding. The practical implications include highlighting the contribution that start-up enterprises and unknown brands can make to established brands rather than simply the reverse. Keywords: Complementary competence co-branding, brand preference, consumerbased brand equity, little known/unknown brands, formative scales, cause-related marketing.