Cooperative Relationships between Product Brands and Ingredient Brands

Abstract

Co-branding strategies have some advantages in gaining high brand equity with low risk because firms might be able to extend their brand by cooperating with other firms who have their own brands with high brand equity (Boad, 1999). Although co-branding typically means brand alliances among a couple of manufactures (product brands) in/outside of the product categories, it includes a variant in which manufactures (product brands) cooperate with suppliers (ingredient brands) to incorporate the suppliers’ brands into their own brands as ingredients. It is called ingredient branding (Desai and Keller, 2002). With the new type of brand alliance, manufacturers wishes to differentiate themselves from the competition through the inclusion of the ingredient brands into their final products (Luczak et al., 2007).