Is Co-branding A Double-edged Sword for Brand Partners?

Abstract

Co-branding is a popular business practice, but marketing scholars have paid very limited attention to co-branding success in the horizontal co-branding context. The aim of the current study is therefore to investigate the impact of a good product-fit in terms of attribute-level complementarity on co-branding success. We first define co-branding success, as one of two effects - a synergy effect and a positive spillover effect. Then, assuming attribute-level complementarity exists, we test two hypotheses that correspond to each effect by using a simple perceptual measure of consumer-based brand equity (CBBE) in a laboratory experiment. We find that, counterintuitively, attribute-level complementarity may not lead to a "higher-value" co-branded product and, in fact, may damage both brands` equity. That is, synergy and positive spillover effects may not always occur, even under the scenario of a good product-fit. Thus, a horizontal co-branding partnership with attribute-level complementarity could be a double-edged sword for brand partners. The present paper demonstrates the connection between the affect-transfer of attribute beliefs and co-branding success. For brand managers, the proposed CBBE measure can provide an ex-ante evaluation of an intended partnership.