Disadvantages Of Co-Branding

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Many companies in today’s world of globalisation and with increasing pressure to become cost effective and efficient, are looking for different ways to increase brand equity, brand affinity and in general to expand their brand awareness (Stutz & Schaffner, 2011). One consideration for companies in answer to this is co-branding strategies. As well as reinforcing brand image and, co-branding has also become an increasingly strategic tool to capture higher market share and increase profits and is seen to have the advantage of gaining access to new markets (Swaminathan, 2006). Advances in technology have made co-branding possibilities more accessible to many companies (Rid & Pfoertsch, 2013). Co-branding can be described as the combining of two or more brands into a joint product or when they are marketed together in some way (Kotler & Armstrong, 2012) or with two or more brand names being are presented to the customer jointly (Rao, Qu, & Ruekert, 1999).

The advantages to companies of embarking on any co-branding undertaking are well described (Grebosz & Otto, 2013; Stutz, 2011; Swaminathan, 2006) and almost considered even as a win-win for many organisation (Washburn, Till, & Priluck, 2004). However, there
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Brand extension can be either when a brand is extended into the same product category or into a new product category. Aaker and Keller (1990) describe this co-branding strategy as when a new product or service uses an existing brand name that had been associated with it before the extension. The strategy is that the brand equity and brand image of the brands used to create what is called the extension, transfers to the extension (Hadjicharailambous, 2013). This brand image quality of the existing or parent brands, and the perceived brand fit that are the main factors that influence the success of the extension (Meyvis, Goldsmith, & Dhar,
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