The future of co-branding: A study of cross-border brand alliances

Louise Fenger & Sarah Maria Carl

Student thesis: Master thesis


For many years, one of the most efficient methods for creating a competitive advantage on an international scale has been through branding. Therefore, creating a strong and unique brand that appeals to consumers is vital for success. Brand identities are carefully developed in an attempt to achieve the desired brand position. A recent trend that is gaining foothold on an international scale is cross-border brand alliances. Companies engage in co-branding activities across borders in order to innovate and leverage the brand and mitigate replicationrisks. This thesis evaluated different brand alliances from a consumer perspective on the Danish market through a questionnaire, in order to investigate how a cross border alliance affects the customer-based brand equity of the parent brand. With point of departure in ingredient co-branding - where a parent brand integrates an ingredient brand in order to add new value - aspects of brand alliances were analyzed. The two brands that engage in an alliance should match each other on parameters as brand fit, equity fit, and product fit. A fourth parameter – country of origin fit - was added to the analysis of brand alliances as the concept country of origin increasingly is used by consumers when evaluating brands‟ quality. Brand image fit was found to be the most important dimension of fit, whereas product fit‟s influence was less significant. Further, country of origin had a tremendous impact on the alliance, when the brand was unknown to consumers. Country of origin seems to influence the alliance more, when the country is perceived negatively and it is vital for companies to consider this dimension of fit in order to avoid a negative impact on its brand‟s identity. Furthermore, the parent brand was found to be the most influential brand in an alliance; however, the parent brand itself was also influenced by the ingredient brand. It is crucial to know the equity of the parent brand, as the level of this will determine, how the ingredient brand and the alliance will affect the equity post-alliance. Further, as an increasing number of brands enter alliances across borders the aspect of country of origin becomes pivotal in finding a suitable partner. Brands inherit the heritage of the country, which they are associated with and companies must consider how the consumers perceive the particular country and whether it is a dimension worth emphasizing. Especially, as consumers from different countries have different brand-familiarities and as soon as one of the brands in the alliance is unknown, the consumers tend to use the country of origin as a decisive selection parameter. Brand alliances are deemed to be one of the futures most lucrative brand leverage strategies. Therefore this thesis is important reading.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
Publication date2010
Number of pages129