1

Literature review on challenges and opportunities of

Co-branding in international marketing

Table of Content

1 Introduction .......................................................................................................................... 3

2 Brands and Brand Equity ..................................................................................................... 4

3 Co-branding ......................................................................................................................... 7

4 Impacts of Co-branding ....................................................................................................... 8

4.1 Direct effects ................................................................................................................. 8

4.2 Spill-over effects ......................................................................................................... 13

5 Possible strategies for co-branding in international marketing .......................................... 17

6 Conclusion ......................................................................................................................... 22

References ................................................................................................................................ 25

2

1 Introduction

There is going to be more and more competitiveness in marketplaces and due to this

schematic opposition between corporations develops as a tool for schematic companions to

achieve advantages. In circumstances distinguished by a severe decrease of the economy, in

which the chief precedence is to minimize expenses in order to achieve bigger effectiveness of

operation, connecting so as to make the competition, which is a rising basic marketing plan to

confront more effectively the obstacle of the implementation of a brand name with worldwide

features. The brand name is an insubstantial property which has played very important part in

schematic provisions, for public as well as private corporations (Abimbola, 2001). A prominent

brand picture provides the corporation a competitive advantage, as it lets the clients recognize

much more advantage in association with the features and standard of the product or service. The

impact of the brand is rooted on the presence of trust and a series of hopes. Co-branding is rooted

on connection between two acknowledged brands for the development of a product with high

added value. In such method, co-branding lets the transference of fame and being credible

between companion brands, letting the marketing procedure more effective. This study aims to

provide literature review on challenges and opportunities generated by co-branding in

international marketing. On this basic of understanding provided the recommendation on

marketing strategy to take competitive advantages from co-branding in international market.

3

Table 1 Success factor for direct effect of co-branding

4

Table 2 Success factor for spill-over effect of co-branding

Figure 1 Co-branding strategy

…………………………………………………………………………………………………..

5

2 Conclusion

Taking into consideration the recent trend of co-branding internationally as marketing strategy

to gain competitive advantages, this study has reviewed the opportunities as well as challenges in

co-branding strategic management in international marketing. Despite its challenges, co branding

has become implemented as marketing strategies in order to take competitive advantages in the

international market. Giving the right situation, co-branding is considered as an effective mean

of making the products outstanding within the context of economic globalizations and

internalisations. However, to develop an effective and efficient co-branding as a marketing

strategy, the following critical factors are recommended to be considered:

Transition cost should be taken into consideration for the two firms embarked to make

co-branding success. For the JV, both firms are responsible for profit and liability

generated; thus, transition cost is shared and symmetric. However, for the merge firm,

one is required to take responsibilities for the other; thus, the transition cost would

largely affect the co-branding success.

Cultural difference should be also taken into consideration as an essential factor in the

plan of co-branding. To try consolidating firms from different environments might

bring various uncertainties in many aspects of business operations; thus, it contributes

largely on the directions as well as outcomes of co-branding strategy.

Consumer acceptance should be considered as one of major drivers of success in co-

branding. Since it is relatively difficult in finding a leverage point and common

grounds for both firms in purpose of satisfying the radical differences in consumer

groups between two different environments, it is advised firms to identify andmake

main focus on consumer demands and needs.

Core positioning is one of important factor since each brand has its separated core

competences, core positioning is essential of the co-branding between two brands. It is

advised firms to have clear and unique identification and positions of their core

competences in purpose of making jointed brand integrating with the original ones.

6

Capital restructuring takes an important place of those factors affecting the success of

co-branding strategy. Since each firm is responsible for one or several financial

aspects, adequate capital structures for both firms is essential before starting co-

branding plan.

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