Brand Alliances

What is a brand alliance? Keller (2008) defines a brand alliance as when two or more brands produce a joint product or market themselves together in some fashion. Brand alliances can be useful for a brands as one could potentially reinforce, remove or create new associations towards the brand. Further one could borrow needed competence, leverage equity one does not have (secondary associations, we will take a look at this later), reduce the cost of introducing products and enter new product categories. We could also increase the knowledge and image of our brand.

Brand alliances has its pitfalls as well. As the perception of brand alliances are affected by the pre-existing attitudes towards the brands involved as well as perceived fit of the brands and the product, one has the risk of being seen as inconsistent (Simonin and Ruth, 1998). We can thus see that if one of the brands suffers a crisis, this might affect the consumers perception of the partnering brand. One cannot control the associations made towards the brand and there could be problems with cooperating the brand. According to Keller (2008) a brand alliance is a great source of gaining secondary associations, which in turn could increase the brand equity. So what types of brand alliances are there?

Ingredient brand alliances: Many of you have seen that Gore Tex and so on are parts of other brands. This is a typical ingredient brand alliance. The ingredient brand alliances goal is to gain a point of difference or point of parity in the product (Read Øystein's post on pods and pops). The goal of the ingredient brand is thus to gain a quality mark, so that consumers will not buy brands that does not consist of that ingredient. In such we can see that Gore Tex wants to be perceived as a high quality provider in for instance hiking boots, so that consumers only wish to buy hiking boots consisting of their products. This could thus give a competitive advantage or competitive parity to those brands that consist of Gore Tex. We could in so see that an ingredient brand alliance could improve our relation to our supplier while allowing us to have higher margins (charge a price premium).

As seen in these hiking boots from Timberland, the Gore Tex logo appears on the boot in order to signify quality. Ingredient brands could thus transfer associations to the partnering brand and visa versa. Take for instance the Norwegian frozen pizza Grandiosa and the cheese Jarlsberg. Grandiosa wishes to perceived has having higher quality by containing Jarlsberg, whereas Jarlsberg wishes to be associated with a new usage situation - pizza topping. So how could we make ingredient brands work? Basically it has to do four thing:

1. The ingredient brand must be seen as superior.

2. The ingredient brand must enhance the value of the partnering brand

3. There must be a visible logo of the ingredient brand

4. There needs to be a "push and pull" strategy explaining associations that should be made

Promotional brand alliances: Promotional brand alliances occur when brands markets themselves together while keeping their own identity. Here one could reduce the cost of marketing while leverage the other party's associations. A classical example from the Norwegian consumer goods market could be seen in the alliance between Ulvang and Milo. They market themselves together while making a great fit, and they are both primary associations of each other (Milo - detergent for wool, Ulvang - wool clothing). 

New product development alliance: Occurs when two brands goes together and create a new product, and markets the product under one brand name. An example could be seen in Mercedes and Swatch cooperating in making the new city car. A hypothetical example could be if a coffee brands go together with a chocolate manufacturer and make a new chocolate flavored coffee marketed under the coffee brand. 

We can thus conclude that brand alliances could be wise in order to obtain secondary associations and to enter new product categories, while increasing knowledge and image. However, to avoid being inconsistent with regard to concept, a brand should not pursue a brand alliance before the brand has established and made sure that consumers understand their concept (Park et. al 1986). Leif Hem (2012) argues that brand alliances could be appropriate for all concepts as it could enhance the perceived value and exploit strong brand equity.