Disadvantages Of Co-Branding

Catherine, W., Tat Pui, L. and Henrik, U. (2011) The Roles of Branding for a Brand Entering

According to Holt (2004), a brand can be defined as a term, name or a design that distinguishes product or service of one manufacturer from others. Brands are normally utilized in advertising, business and marketing. In accounting terms, brand is an intangible asset which is present within every organization. It is most valuable asset that is outlined in the balance sheet of a company. Brands owners need to effectively manage their brands in order to enhance shareholder value. Brand valuation is an important technique that associates money with a brand. Effective branding often results into high sales volumes of a particular product. A customer who prefers a brand is more likely to choose other products which are offered by the same brand. Brand can be stated as a personality that facilitates identification of a company, product or service. It even encompasses relation with other constituents like customers, partners, investors, staff, etc. Individuals distinguish psychological aspect of a brand from experimental

According to Lederer and Hill’s Brand Portfolio Molecule an organization’s product offerings are synergistically related. The Brand Portfolio Molecule identifies a large central or lead brand. This brand represents the most influential brand with the organization’s portfolio. Lederer and Hill also identify the strategic and support brands which influence customer purchases. The network of relationships that exist amongst the brands whether positive or negative provide a map for the marketer to manage the current product offerings the portfolio represents (p. 77).

However, this strategy also has some disadvantages that may hurt the company’s development: The first is the fierce competition between these brands. And it is important to note that using this strategy means facing higher risks. Cost control is another big problem. Obviously, the more brands there are to manage, the higher the costs. For this reason, many prudent companies prefer brand extension over multi-brand management.

In determining whether or not a brand extension will be successful, corporations and marketing strategists must attempt to build strong correlations between the existing brand and/or product line. A strong pairing or high-fit brand extension immediately associates a new line or extension with currently held views of consumers. The more dissimilar a new product

The practice of co-branding is a relatively new technique utilized in the health care industry, which applies when one organization markets its name alongside another brand name. In this example of co-branding, the government of Vietnam wants to create an affiliation with Stanford Medical Center and its major national hospital in Saigon. This venture would include sending clinicians over to Vietnam to monitor, train and help and monitor its quality programs. In this situation, the Vietnamese hospital is looking to gain benefit from the Stanford Medical Center in what can be termed the “halo of affection” that belongs belong to the well-know and well-respected academic medical center. The Stanford Medical Center brand managers should be

There are fears and risk elements associated with co-branding when two organizations market its names alongside each other. The main risk exists in terms of damaging the existing product’s strong brand equity (Payne, Storbacka, Frow, & Knox, 2009). Other hazards are linked up with compatibility between brands, market violations, partner’s agreement commitment, and potential conflict (Berkowitz, 2011).

As far as the pure economic aspect of the decision concerns, the implementation of a corporate branding strategy would increase the Customer Lifetime Value and therefore the profits of the company, as calculated in the attached

First of all, a strong brand can be seen as the condition for organisations to expand products, offer more service, and introduce new products (Chernatony and McDonald, 2003). Secondly, a strong brand can lead to growth marketing communication effectiveness (Keller, 2009). ‘To build a strong brand, the right knowledge structures must exist in the minds of actual or prospective customers so that they respond positively to marketing activities and programs in these different ways.’(Keller, 2003, p. 140) Furthermore, Kay (2005) asserted that the strong brand can be seen as a resource of management, which make brand extension easier and useful to build distribution network. Companies are not treated by the intermediaries (Chernatony and McDonald, 2003). Moreover, companies are comparatively easier to change price if they have strong brands. As Henderson, et al (2003) said, a strong brand can allow for premium pricing even still remain loyalty customers, which help companies to survive in the intensive competitive market.

The reason companies start to co-operate is due to technological and psychological changes of the business environment. There are two reasons why this occurs (Uggla, 2000): First, technology and new distribution patterns open up new possibilities for cooperation where brand extension and brand alliances become more interesting from a strategic point of view. Second, consumers look for risk reduction, and brand extension and brand alliances might be the right strategies to reduce consumer risk. Strategies to meet the demands of a changing world are co-branding and ingredient branding.

As markets and customer needs evolve; brands can lose customers to new competitors. In addition, brands can become diluted as product or service offerings become commodities. When a brand loses meaning and relevance to target customer, a new brand promise should be defined so the brand can be repositioned.

In such cases, brand extension is a very feasible scenario where in both the parent and child product enjoy a symbiotic relationship.

A company may use dual branding when they want to increase the market share, saturating the market by filling all price and quality gaps and catering to brand switchers users who like to experiment with different brands, a dual brand strategy also may be applied when two companies want to

UK food and beverage industry now have multibillion businesses per annum and every company want to be part of its market as much they can capture. For that different existing companies develop branding strategy and introduce their new products using a well established brand name as leverage. To capture the

This report will explain how Intel has developed a mechanism to align its branding and marketing strategy with those of clients in the home and office market computing sector. Intel’s use of an integrated co-branding