Understanding and Implementation of Co-Branding - Thesis Proposal Example

THESIS PROPOSAL ON CO-BRANDING Inserts His/Her Inserts Grade Inserts 5th November’ AIMS The purpose of writing this thesis proposal is to develop an outline for research that should be employed while writing the research paper. This proposal will serve as a guideline for my research on the subject of co-branding and provide a basis of understanding of the basic concepts pertaining to the subject. OBJECTIVES The objective of this thesis proposal is to analyze and discuss the methods and strategies that can be applied to improve the understanding and implementation of co branding. This proposal focuses on developing a clear understanding of the theoretical concepts related to branding, highlight the research methodology suitable for the project, and evaluate the pros and cons of co-branding. It also emphasizes on how brands are an epitome of luxury and how luxury has become an individual concept for each person. RESEARCH QUESTIONS RQ1: How do the concepts of Brand Extension and Brand Management relate to co-branding strategy? RQ2: Why do companies come together to form a Co-branding alliance? RQ3: What are the advantages and consequences of Co-branding? RQ4: How do consumers view the co-branded products? RQ5: How can desired customer relationships be cultivated by the companies through co-branded products? RESEARCH CONCEPTS Now, I will be highlighting the basic theoretical questions which will form the basis of my research, followed by hypothetical questions which will be based on how the research shall be conducted. WHAT IS A BRAND? A brand is a perceived personality of a particular product, company or a service. It’s an identification of a product either through name, symbols, colors, tag line, audio or a sign. The brand serves as recognition of one’s product differentiating it from the others on the basis of brand experience. They provide the primary point of differentiation among the competitors’ products. Brand is the essence of what the product offers and therefore, they are developed over a period of time. Brands are created to associate positive images and perception with the product to create brand value. Brand value is reflection of how the market place and target market perceives the company’s product or service. The experiential aspect of a brand, known as brand experience, is how people distinguish the brand on the basis of some associated feelings, emotions, images, experiences, etc. On the other hand, brands also have psychological impact on its audience, called brand image, in which people relate the product with a symbolic construct or an image. A brand enables its audience to relate particular characteristics and qualities with their products to make it a unique market offering. Nowadays, marketers are making special effort in their advertising to create brands allowing its target market to associate special features with the product. Brands are developed through different customer touch points which include: Personal Selling, allowing customers to interact with the company Advertising, through billboards and television commercials containing consistent messages Suggestions of the product by friends and family Quality or the experience of using the actual product Once the brands are developed, the art of maintaining the brand is called brand management. The established brands provide remarkable competitive and strategic advantage to the company for their offerings in the market place. Thus, brands are created to foster long term relationships between the company and its customers. WHAT IS BRAND MANAGAMENT AND WHAT ARE THE MAJOR ASPECTS OF BRAND MANAGEMENT? Brand Management is the process of creating, promoting and preserving the name and status of a product to increase the brand awareness, brand loyalty and customer sales. Brand management begins with understanding the brand itself. The process of understanding begins with top management who create and the control the brands. Then it flows down the organizational hierarchy and it should be well-understood by the sales representatives of the company who actually represent the brand to its customers. The better the understanding of the product among the managers, the better they are able to portray in front of the customers. Another very important aspect of brand management is defining the brand, i.e. creating a brand promise. Brand promise is something that should have an impact on the minds of its consumers; it should be memorable and desirable. It should evoke thoughts as thoughts drive actions. A brand promise should serve as a differentiating factor from other market offerings and it should be thoughtful decision after evaluating the needs of the target market and the market place. After a brand promise is created, companies need to fulfill it through high quality products and brand positioning. It should be perceived by the audience the way brand is being portrayed; there should not be any misinterpretations by the target market. This is effectively done through personal selling. The most important aspect of brand management is sustaining the brand promise. This is the most difficult part as well as companies must keep innovating to provide superior value of the product and each innovation must be aligned with the initial brand promise. (Brand Management ) Brand management for an organization is described as the continuous process of building brand value in the minds of the target audience, so that the perceived value of a product increases and continues to grow. (Brand Management) WHAT IS BRAND EXTENSION AND HOW IT SHOULD BE DONE? Brand extension is a part of brand management and is a marketing strategy in which the company tends to diversify in a new product category under the same brand name. It aims to leverage the existing brand’s image and loyalty into the new product’s success. It is also seen as a means of creating integrated brand architecture. The acceptability of the new product under an established parent brand is much higher because consumers have already had the brand experience and there is a strong brand loyalty of established brands. Brand extension is one of the most popular new product development strategies which can reduce monetary risk through the effective use of the parent brand name to enhance consumers perception due to the core brand equity. It also reduces the research and development cost because company is well aware about its consumer’s knowledge and preferences. A good example of brand extension is seen when fashion designers extend their brand from apparel to shoes, fragrances and accessories. They use the existing brand power to drive the growth of new innovative products. There is also risk associated with brand extension because when a lot of products are launched under the umbrella of the same brand, it leads to brand dilution. Brand dilution is where the parent brand loses its associations with its target market, quality, area and price. In short, brand dilution leads to inconsistency in maintaining the brand promise. (Juda) WHAT IS CO BRANDING? As already discussed, a strong brand is the biggest asset of a company. The value of a company is not only measured by its buildings and revenues, brand value plays an important role in determining a company’s financial condition. With increasing competition in the market place, companies are undertaking joint marketing projects. This gives rise to the concept of Co Branding, also known as brand partnership. Co branding is when different companies work together in a coalition to create marketing synergy. One of the largest brands partnership efforts ever, the Global Fund joined forces with American Express (AXP), Apple (AAPL), Converse (NKE), Dell (DELL), Emporio Armani, Gap (GAP), Hallmark, and Starbucks (SBUX) to combat AIDS in African Region. The effort is known as (Red) and has raised more than $130 million. (Crawley and McKee) Tom Blackett and Bob Boad, in their book Co-Branding: The Science of Alliance, defines co-branding in following words, ‘... the term co-branding is relatively new to the business vocabulary and is used to encompass a wide range of marketing activity involving the use of two (and sometimes more) brands. Thus co-branding could be considered to include sponsorships, where Marlboro lends it name to Ferrari or accountants Ernst and Young support the Monet exhibition ... The list of possibilities is endless.’ (Put a Little LUV in Your Logo!) A brand partnership is often a short term joint marketing venture among brands to enhance each other’s brand positioning and increase the target audience. A well designed co-branding strategy can often result in a win-win situation for both co-brand associates and facilitates in identifying unexplored market niches and untapped market opportunities. Firms usually form co-branding associations to fulfill the following goals: To increase their revenues and profits To respond to customers hidden or unknown needs, this often involves tapping into unknown product category To increase customer base To strengthen brand image in the competitive environment To improve the perceived brand value To launch a new product with a strong brand image (Doshi) SUCCESS FACTORS OF CO-BRANDING Co-branding strategies are becoming popular to fend off competition in the market place and to gain greater market share through a wider variety of products. One of the major advantages of co-branding is it reduces financial costs considerably as the companies combine their resources and achieve economies of scale, leading to higher sales and profits. In co-branding, powerful brands with high brand loyalty tend to influence the weaker brands with lesser reputation. Thus, allowing the weaker brand to improve its sales through the leverage of a highly reputed brand. Companies create co-branded products through combining the unique and special features of their brands, and thus they are perceived as “the best of all worlds" products. Therefore, consumers trust co-branded products more and there is stronger brand loyalty. The risks in co-branded products are often high, yet shared. Therefore, companies tap into unexplored markets and opportunities through co-branded products because it diversifies the risk and reduces the financial burden. (Co-Branding: Advantages And Disadvantages) Masstige Method Masstige is a marketing strategy in which companies tend to do downward brand extension. It is often done to increase the target market of a brand. The word ‘masstige’ is a combination of the words mass and prestige and is described as prestige for the masses. Masstige brands are defined as "premium but attainable," and there are two key points relating to masstige products: They are perceived as premium goods They have price points that fill the gap between middle and upper class. RESEARCH METHODOLOGY The most notable examples of co-branded products exist in fashion industry. A famous co-branding association of a Swedish brand, H&M, with luxury fashion designers and celebrities has not only proved to be successful but also one of the most innovative retail brand partnerships. In March 2007 the internationally established Swedish clothes company H&M launched its new luxury collection in collaboration with the well known American artist Madonna, who has made her own design collection for H&M: M by Madonna. Keeping in mind this example, research methodology will be based on a combination of qualitative research and quantitative research. The research will further be divided into secondary and primary research. The secondary research will be based on reliable internet sources, published articles and journals, established theoretical concepts and real world examples of co-branding. PRIMARY RESEARCH Interviews The primary research will employ fashion industry expert interviews taken through telephone since it is more time and cost effective qualitative method which allows gathering area-specific information. These interviews would gather information on the target market, consumer preferences, affordable price range, and type of products that will be offered under the brand umbrella. The data collection technique will also include on-spot interviews with the consumers in the H&M stores, who prefer the collaborated brands, to question their inclination to avoid respondent bias. Focus Groups Focus groups would be conducted for collecting qualitative data. It can be used to compare how consumers react to branded products and co-branded products and how they perceive their brand value. Focus Groups topics would revolve around how the celebrities have added value to the H&M products and how do consumers independently perceive H&M products and these celebrities. Surveys Quantitative primary research will be conducted through questionnaire surveys and telephone surveys. As already mentioned, expert marketers of co-branding shall be approached and questioned in detail on the concept of co-branding, its benefits, and drawbacks and how do they perceive the H&M collaboration with Karl Lagerfeld, Stella McCartney and Viktor & Rolf. Consumer surveys shall be conducted through questionnaires to quantify the brand value of H&M collaboration with Madonna, and how do the consumers view these products with respect to saturated market offerings of different brands. Online surveys through email and social media shall also be conducted to gauge the importance and popularity of H&M collaboration brands. DATA SAMPLING The research shall be designed on the basis of the target audience who are more conscious of using branded products and how do they value brands over their price. In each case, random sampling shall be done to ensure the objectivity of the population sample. While conducting practical research, data samples are not uniform and this becomes a limitation in research. (Begemann) LIMITATIONS There are several limitations associated with research and co-branding of H&M campaign. In this campaign, their target market was smaller than usual H&M products because Madonna’s association added brand value and it became a luxury brand. Thus, luxury brands are just for few. Research limitations include time constraint which is nowadays one of the most important restrictions. Another very important constraint is cost of conducting primary research. It also requires physical presence of the researcher to interact with the consumers. Limitation of qualitative research is that it usually consists of respondent bias at times due to peer pressure and subjectivity. Expert interviews are also subject to personal biases. Often, transforming qualitative data into quantitative data is a challenge. Researcher bias is always there but it can be minimized through continuous objective analysis. (Co-branding - Meaning, Types and Advantages and Disadvantages) (The Marketing Aesthetics of Co-branding and Joint Ventures) CO-BRANDING ASSOCIATIONS Co-branding partnerships are becoming popular everyday and most often, a similar research methodology is adopted by other co-branding alliances. Some of the famous examples of brand partnerships include ‘Coach Edition ES300’ by Lexus and Coach in 1996 and is one of the most flourishing strategic alliances that have celebrated tremendous success since the launch. Another very important co-branding example is of McDonalds and Wal-Mart in which McDonald’s unit is located in Wal-Mart’s territory and gains access to large number of its customers. A similar example is of Little Caesars with Kmart. In this association, Kmart is a franchisee of Little Caesars franchise system. A typical example of co-branded products in the American market is Betty Crocker dark chocolate supreme brownie mix partnered with “Hershey’s special dark syrup”. Another recent example of co-branding is the collaboration between Levis and a fashion designer Veronique Branquinho. The amazing consequence of this alliance is a completely new market offering that is not at all related to fashion industry. It’s a wall paint that is sold under a slogan ‘Fashion for Walls’. (Slavkina) Also an example of co-branding is the collaboration between Adidas (ADDDY) and Polar Electro, who created Project Fusion, which incorporate heart rate, speed and distance monitoring equipment into sportswear. (Crawley and McKee) An example from fashion industry is the collaboration between much-admired Issac Mizrahi and Target stores, who designed a women’s ready-to-wear apparel for the store. CONCLUSION The M campaign of H&M links the M of the company name similarly with the M as in Madonna, resulting in collaborative values being shared between them in a win-win manner. This thesis research proposal serves as foundation for conducting a detailed research on co-branding by H&M. It highlights the appropriate research that is done, how it is conducted and what are the limitations of research. This research will help understand better the concepts and strategies of co-branding, brand extension and brand management and help develop a deeper understanding to be able to implement these strategies in our business plans. Despite the limitations of cost and time, the detailed research shall be conducted to enhance the marketers understanding of co-branding so that they develop a better brand strategy for co-branded products. (Huynh) BIBLIOGRAPHY Asian Market Research Techniques. Orient Pacific. 4 November 2010 . Begemann, Frederic. Co-branding as a Brand Strategy. Germany: Druckand Bindung, n.d. "Brand Management." The Creative Company. 4 November 2010 . "Brand Management ." Changing Minds. 4 November 2010 . Co-branding - Meaning, Types and Advantages and Disadvantages. Management Study Guide. 4 November 2010 . "Co-Branding: Advantages And Disadvantages." OPPapers.com. 4 November 2010 . Crawley, Deena and Steve McKee. "Twenty Co-Branding Examples." Bloomberg Businessweek. 4 November 2010 . Doshi, Gaurav. "Co-branding." Ezine Articles. 4 November 2010 . Huynh, Michelle. "Thesis Proposal." Slide Share. 4 November 2010 . Juda, Budi. "Brand Extension." January 2007. Bloomhead. 4 November 2010 . "Put a Little LUV in Your Logo!" 2 September 2007. Competing for Customers and Capital. 4 November 2010 . Slavkina, Olga. "Brand partnerships." Schmoozy Fox. 4 November 2010 . "The Marketing Aesthetics of Co-branding and Joint Ventures." Per Strömberg. 5 November 2010 . Read More