Consumer evaluations of service co-branding

Abstract

ABSTRACTRooted in signaling theory, this paper investigates the effects of co-branding structure, category fit, and types of sales promotion on consumers’ evaluations of service brand alliance. Results of a 2 × 2 × 2 experiment with co-branded credit cards as the focal product show that an equals co-branding structure (combination of two equally strongly established brands) is more likely to have greater consumer evaluations than any major-minor structure. The alliance of a low-equity host brand and a high-equity partner tends to enjoy better consumer evaluations than the arrangement of a high-equity host brand and a low-equity partner does, demonstrating a dominating effect. Category fit, which stands for signal consistency, positively moderates the relationships between co-branding structure and consumer evaluations. For any major-minor structure, consumers evaluate brand alliance with non-monetary promotion more favorably than that with monetary promotion. For equals co-branding structure, however, promotion type does not influence co-branding evaluations.