Brand Alliance Research Articles

Modeling the Role of Brand Alliances in the Assimilation of Product Evaluations

A model of context effects in product evaluations is tested in which brand alliances play a key role. This three‐part study examined the extent to which evaluations of two restaurants are assimilated by virtue of their dual‐branding strategic linkage. Key factors in the assimilation process are thought to be the ambiguity of the target restaurant's description and the degree of linkage between the target and the context as operationally defined by varying the shared features of the dual brands. Results support a model in which inferences about the qualities of an incompletely described target product arise from the assumed similarity between target and context, which is directly related to the degree of linkage between the two brands. These inferences include both specific attribute values and global evaluations of quality.

Modeling the Role of Brand Alliances in the Assimilation of Product Evaluations

Modeling the Role of Brand Alliances in the Assimilation of Product Evaluations

A Consumer Perspective on Foreign Market Entry

Firms seeking to enter their brands in another country's market may face large expenditures in order to build brand awareness and brand image. Often co-branding is used in strategic alliances or joint ventures, however, it may benefit firms across all modes of market entry. We define a brand alliance as the renting of a brand name from another firm. In experiments with Japanese and U.S. subjects, we show that consumer evaluations of an unknown brand from another country were more positive when a brand ally was used. Alliances also increased subject evaluation of the parent firm. Brand alliances, while apparently effective, did not eliminate the effects of country of origin stereotyping.

Signaling Unobservable Product Quality through a Brand Ally

In this article, the authors examine the circumstances in which brand names convey information about unobservable quality. They argue that a brand name can convey unobservable quality credibly when false claims will result in intolerable economic losses. These losses can occur for two reasons: (1) losses of reputation or sunk investments and (2) losses of future profits that occur whether or not the brand has a reputation. The authors test this assertion in the context of the emerging practice of brand alliances. Results from several studies are supportive of the premise and suggest that, when evaluating a product that has an important unobservable attribute, consumers’ quality perceptions are enhanced when a brand is allied with a second brand that is perceived to be vulnerable to consumer sanctions. The authors discuss the theoretical and substantive implications for the area of brand management.

Is a Company Known by the Company it Keeps? Assessing the Spillover Effects of Brand Alliances on Consumer Brand Attitudes

The authors examine the growing and pervasive phenomenon of brand alliances as they affect consumers’ brand attitudes. The results of the main study (n = 350) and two replication studies (n = 150, n = 210) together demonstrate that (1) consumer attitudes toward the brand alliance influence subsequent impressions of each partner's brand (i.e., “spillover” effects), (2) brand familiarity moderates the strength of relations between constructs in a manner consistent with information integration and attitude accessibility theories, and (3) each partner brand is not necessarily affected equally by its participation in a particular alliance. These results represent a first, necessary step in understanding why and how a brand could be affected by “the company it keeps” in its brand alliance relationships.

Is a Company Known by the Company It Keeps? Assessing the Spillover Effects of Brand Alliances on Consumer Brand Attitudes

Is a Company Known by the Company It Keeps? Assessing the Spillover Effects of Brand Alliances on Consumer Brand Attitudes

Strategic brand alliances

Brand names are being conjoined, commingled and combined with other brand names in record numbers. The ubiquity of this phenomenon has not gone unnoticed amongst academics and managers, who are beginning to study the antecedents and consequences of such ‘alliances’. Managers contemplating a brand alliance should recognise that it is one of several strategic responses available to the firm. This paper offers a template for analysing the brand alliance decision as one possible strategic response of the firm, and discusses implications for ally selection and relationship maintenance.

Products with Branded Components: An Approach for Premium Pricing and Partner Selection

An increasing number of products are being sold with components that themselves are brand names. Examples are personal computers with Intel microprocessors and diet soft drinks that use the NutraSweet formulation. Branded components may alter consumers' valuation of the bundle, necessitating changes in the ways firms identify and price such bundled products. Surprisingly, the existing marketing literature is silent on this issue. The purpose of our paper is to propose an analytical approach that helps marketers of products with branded components make optimal pricing and partner selection decisions. Our managerial objectives are twofold: (a) To the seller of the bundled product, we suggest the optimal bundled product offering, optimal selling prices of alternative products, revenues and profits; and (b) to the branded component manufacturers, we indicate the most favorable alliance partner(s), and payoff gains/losses of aligning with other branded components instead of unbranded alternatives. Our analytical approach is also likely to be helpful to academics researching bundling and ingredient branding issues. The specific problem modeled assumes the bundled product has two components that are consumed jointly. Furthermore, each component can be either a brand name or “unbranded.” In this model, the consumer has no control over the choice of the components in the bundle; the seller decides what form of bundle components (i.e., branded or unbranded) to offer. We assume that the product that is marketed eventually enjoys a monopoly. Drawing from research in signaling and brand alliance, we posit each branded component may either enrich or suppress the value of the partnering component in the bundle as perceived by the consumers. Our approach has three methodological stages. First, we build an individual level model to assess the valuation of alternative products and their principal components at the level of a randomly drawn consumer. To do so, we rely primarily on the theory of reservation prices and Weber's theory on price/value changes. Second, we aggregate such valuation across consumers to assess the market's overall valuation. For this purpose, we invoke parametric distributions based on integral transform theory. Third, we develop payoff functions based on market valuation of alternative products and supply-side costs. The managerial objectives are met based on results from this stage. Our approach was successfully applied to the context of a university bookstore that intends to sell “Windows”-based laptop computers. The two principal components of the laptop computer bundle are the microprocessor chip and the personal computer platform on which the chip is implanted. The seller may choose either Compaq with “Intel Inside” or a simpler bundle featuring one of these with an unbranded, complementary component, or an entirely unbranded bundle. We used data collected from 192 potential consumers via a survey. Included in the survey were measures of consumers' perceptions of functional aspects of the components, and their reservation prices for alternative bundled products. The approach identified the most profitable bundle for the seller and its optimal price. It also provided estimates of the revenue impact of the gain or loss for each branded component by partnering the other branded component instead of the unbranded alternative. As such, the model facilitates the determination of the optimal price, price premium, and profits for products with branded components, as well as the identification of the ideal partner for each branded component manufacturer. It is apt to caution that products with branded components need not always lead to price premiums or lead to win-win outcomes. Reasons such as incongruity between the branded components or domination of one of the components over the other may drive potential consumers away, thus hurting profits. Implications of the results to negotiate component prices are discussed in the paper. The study limitations and directions for future research are also presented.

Composite Branding Alliances: An Investigation of Extension and Feedback Effects

The authors report two studies investigating the effectiveness of a composite brand in a brand extension context. In composite brand extension, a combination of two existing brand names in different positions as header and modifier is used as the brand name for a new product (e.g., Slim-Fast chocolate cakemix by Godiva). The results of both studies reveal that by combining two brands with complementary attribute levels, a composite brand extension appears to have a better attribute profile than a direct extension of the header brand (Study 1) and has a better attribute profile when it consists of two complementary brands than when it consists of two highly favorable but not complementary brands (Study 2). The improved attribute profile seems to enhance a composite's effectiveness in influencing consumer choice and preference (Study 2). In addition, the positions of the constituent brand names in the composite brand name are found to be important in the formation of the composite's attribute profile and its feedback effects on the constituent brands. A composite brand extension has different attribute profiles and feedback effects, depending on the positions of the constituent brand names.

Composite Branding Alliances: An Investigation of Extension and Feedback Effects

Composite Branding Alliances: An Investigation of Extension and Feedback Effects

Brand portfolios

Firms are rushing to create brand portfolios, especially for the Single European Market. Patrick Barwise and Thomas Robertson look at means of developing portfolios — from geographic brand extension and brand acquisitions and brand alliances — and the advantages and limitations of each approach. They also show why brand portfolios will dominate much of the marketing landscape of the 1990s.

Real Wages over the Business Cycle: Evidence from Panel Data

One topic on which Keynes did not disagree with classical economists was the cyclical behavior of real wages. Keynes (1936) as well as various classical writers predicted that real wages should move countercyclically. Quoting the General Theory (p. 17): "in general an increase in employment can only occur through the accompaniment of a decline in real wages. Thus, I am not disputing this vital fact which the classical economists have (rightly) asserted as indefeasible." This prediction is based on the premise of competition and a given short-run capital stock. Increases in employment then correspond to more intensive use of capital and, through diminishing product, lower real wages. For this reason, evidence by Dunlop (1938) and Tarshis (1939) that real wages move procyclically was viewed as paradoxical. Both Dunlop and Tarshis based their findings on an observed positive correlation between real and money wages, which, given the procyclical movement of money wages, implies a positive correlation between