Wednesday, August 22, 2012

FLECK Nathalie, MICHEL Geraldine, GATIGNON Hubert
The Dual Process of Co-branded New Products: Why Fit is Not All That Matters
INSEAD Working Paper 2012/75/MKT

Co-branding strategies involve collaboration of two or more brands to launch a new product that features both brands’ names. While the focus of past research has been on the fit between the associated brands, why do sometimes incongruent brands succeed in their cobranding strategy? We explain this phenomenon by disentangling co-branding effects through two mechanisms: credibility and novelty. We demonstrate the mechanisms can operate in opposite directions leading to the possibility of different success outcomes. We find that the hedonic evaluation of a co-branded product provides a more powerful explanation through novelty than through credibility. Utilitarian evaluations, instead, are driven more strongly by credibility than by novelty. Furthermore, credibility offers full mediation between the brands’ relevancy and consumer reactions to the co-branded product. Contributing to our understanding of perceptions of novelty, brand expectancy influences the perceived novelty of the co-branded new product only if consumers also perceive this brand as relevant to the product category.