Abstract
This research examines the total value impact of cobranding in new product introductions and how the value is distributed between partners. Analysis of 728 cobranded new products in the consumer electronics and packaged goods industries reveals that cobranding does not always create value for partnering firms. In most cases, any value created is distributed asymmetrically between partners. Consistent with resource dependence theory, we find that relative dependencies of partners’ market-based assets (MAs) significantly drive the variance in cobranding value creation and distribution. MA interdependence such as brand, channel, and capability complementarities leads to higher value creation and lesser value asymmetry. In contrast, MA imbalance in terms of brand, channel, and capabilities between partners results in lower value creation and greater value asymmetry. These effects are more pronounced under high market demand uncertainty and competition. The findings offer useful implications for firms looking to build a successful cobranding strategy.
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