Estimating the value of corporate co‐branding synergies

Abstract

PurposeThe purpose of this paper is to discuss corporate co‐branding value and create the model of evaluating co‐branding value. The connotation of the model is to consider the compatibility of strategic partners such as strategic alliance compatibility and brand alliance compatibility; in addition, this research can estimate the corporate co‐branding value through this model to evaluate and discuss the effect of co‐branding effect for the future.Design/methodology/approachIn the past, few researchers investigated the measurement of corporate co‐branding value in the marketing sector. The measurement of intangible assets, on the other hand, is well established in accounting finance. However, the concepts and methods of accounting finance cannot easily be applied to other areas. This paper provides a straightforward concept that uses a heuristic model to combine the notion of co‐branding synergy. According to the literature, the combination of strategic and brand alliances can affect the concept of co‐branding value. This research revises the concept of compatibility from Park and Lawson by replacing the concept of product attribute similarity with the ratio of sales growth, and the brand concept consistency with the ratio of market share after brand alliance.FindingsThis study verifies the proposed model synthetically with a real case (Sony‐Ericsson). Conversely, this research anticipates analyzing the model in different perspectives and observing the variation of different combinations to obtain potential managerial implications for corporate managers. This research concludes: brand alliance compatibility has limited effect on corporate co‐branding value; strategic alliance compatibility is the major power to drive the direction of corporate co‐branding value; and the trend of co‐branding value is the important indicator for business managers.Research limitations/implicationsInsufficient information may generate incorrect or unclear trends if the year of co‐branding is too short. This is also a major limitation of the authors' research. Thus, more real‐world cases can be conducted (such as Miller and Coors) in the future to elaborate upon the model.Practical implicationsThe proposed model helps enterprises estimate their current co‐branding value using existing financial statements and market share data and identify the degree of alliance influence to their revise brand strategies. The estimated co‐branding values in this study can help managers identify their market position and execute existing co‐brand strategies. Managers can utilize this information to revise their management direction or strategies. Based on these arguments, this research enhances existing co‐branding knowledge and offers significant contributions by presenting more real cases (e.g. Miller and Coors) in the future. In other words, this work is both an avenue and a blueprint for future co‐branding research.Originality/valueThe paper devises a novel concept for estimating corporate co‐branding value based on the synergies between strategic and brand alliances. To illustrate the proposed model, this study analyzes the Sony Ericsson example since it has survived for several years. Analytical results reveal that strategic alliance and brand alliance variations have significant influences on co‐branding value changes. Results also reveal that strategic alliances have a greater effect on co‐branding value than brand alliances, which indicates that a good alliance strategy may generate a superior co‐branding effect.