Academic journal article International Review of Management and Business Research

The Influence of Negative Information from a Co-Brand: The Moderating Roles of Involvement and Brand Popularity

Academic journal article International Review of Management and Business Research

The Influence of Negative Information from a Co-Brand: The Moderating Roles of Involvement and Brand Popularity

Article excerpt

Introduction

Co-branding has been applied in marketing practice across many industries. Marketers increasingly use co-branding to utilize multiple brand names on a single product or service (e.g., Vaidyanathan and Aggarwal (2000); Desai and Keller (2002); Washburn et al. (2004)). It means that two or more brands form a strategic alliance in order to achieve excellent synergy that capitalizes on the unique strengths of each contributing brand (Chang, 2009). For example, the Bank of China and a Chinese airline, Air China, co-branded a credit card, the Phoenixmiles Card. This credit card combines the functions of both a Visa credit card and an Air China membership card. Consumers can purchase airline tickets with this card and synchronously enjoy the privileges of members of Air China, such as redeeming their credit card points for airline tickets. This is marketing tool is commonly used by airline companies nowadays.

Since the 1990's, marketing researchers have paid more and more attention to co-branding. Past research mainly focused on changes in consumer attitude toward each co-brand after the co-brands united, and also on the mechanism during the process (James, 2005; Dickinson and Heath, 2006; Helmig, Huber, & Leeflang, 2007; Dickinson and Heath, 2008). However, these studies, which were relatively static, were mostly concerned with co-branding decisions, which concern the influence of co-branding on the co-produced brand and the interactive influence of each co-brand. Less attention has been directed to what happens to co-branding if one co-brand undergoes changes after brands have united. In 2012, a scandal with the Phoenixmiles Card was exposed: A cardholder could not redeem his points because he was late for a flight, the ticket for which was purchased with credit card points. The scandal arose because he was informed that he could not use those points again, even though he had not actually used them. Chinese consumers, including many Phoenixmiles Card owners, strongly criticized the way Air China handled the situation. However, will this negative incident influence the Bank of China? This study is designed to answer this kind of question. In addition, existing co-branding research has usually measured co-brands as popular or unpopular brands, but not as negative co-brands or co-brands with negative information. Furthermore, most of these researchers have discussed the co-branding effect not within a specific context, but within a general one. For example, it is important to know whether such factors as product category or involvement affect the co-branding effect. In this study, we explore how the negative information about one co-brand impacts other co-brands, especially focusing on the popularity difference of the co-brands. In addition, we introduce the concept of involvement to examine how these effects change under different levels of involvement.

Literature Review

According to much research, co-branding increases brand attitude significantly more than single-branding strategies do. Keller and Aaker (2003) found that by incorporating a popular brand's name into its own brand, the unpopular brand can increase its consumers' perceived quality. A study by Washburn and colleagues (2004) found that after a popular brand unites with another brand, consumers' perceived quality of the partner brand will rise, whether it is popular or unpopular. Therefore, co-branding is beneficial for both popular and unpopular brands. However, the participants in the co-branding benefit differently (Simonin and Ruth, 1998), possibly because of the co-brands' different nature or characteristics and their relatively different positions in the co-branding. Nevertheless, Ueltschy and Laroche (2011) found that although the co-branding of two high-equity brands does provide benefits, the co-branding of high-equity and low-equity brands can be potentially dangerous for the high-equity partner.

Simonin and Ruth (1998) proposed that the reason why co-branding influences consumers' perceived quality of each co-brand is a signal transferring process among co-brands and the co-produced brand. …

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