(4.3) Brand alliance strategies

Question 1

What are brand alliances?

Answer 1

All circumstances in which two or more brand names are presented jointly to the customers» can be physical or symbolically. Brands are valuable assets , if combined they can form a synergistic alliance (sum greater than the parts)
Ex. McDonalds X Disney, M&M, Twix, …

Question 2

What are the opportunities of brand alliances?

Answer 2

• Create compelling points of differences or points of parity: expertise > equity > sales
  !! Brand alliances can also exist within the same company
• Source of additional revenue (new customers and channels)
• Reduce cost of product introduction

Question 3

What are the risks of brand alliances?

Answer 3

• Loss of control
• Negative feedback effects
• Lack of brand clarity
• Brand equity dilution
  Ex. Coca Cola & Pepsi: pressure from customers about aspartame in Diet Coke – how do the both firms react?

Question 4

What are the 2 general types of brand alliances?

Answer 4

• CO BRANDING = combination of brand within the same stage of the value chain
• INGREDIENT BRANDING = combination at different stages of the value chain
  > ingredient brand can not be consumed without a host product and is necessary countained within other branded products

Question 5

What is the aim of ingredient branding?

Answer 5

• Create enough awareness/preference for their ingredient that consumers will not buy a host brand that does not contain the ingridient
• For host brand: branded ingredient van function as a signal of quality that might reflect on the host and increase demand by customers

Question 6

Draw the scheme on ingredient brand and host brand

Answer 6

SEE SCHEME

Question 7

What are the success factors of brand alliances?

Answer 7

• Relative strength of the brands used:
  > Stronger brand&raquo_space; more positive evaluations of co-branded product
  > Higher brand familiarity&raquo_space; increases positive impact of brand strength
• General brand fit
• Product fit
• Transfer fit > ex. watches are used for running, smart collaboration between Apple and Nike