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Patience Motlana
Graduate Researcher, Graduate School of Business, University
of the Witwatersrand, Johannesburg, South Africa, and
Marketing Director, Malaika Farms, Johannesburg
Co-branding is an important
strategy for the transition of
brands. For multinational
companies with global brands, it
raises the chances of success in local
markets. For local firms with strong
brands, it secures their future through
foreign investment and access to technology
while maintaining consumer franchise and
loyalty. In this review of co-branding and its
relationship to consumer choice behavior, two
case studies in the food industry lead to a set of
guidelines for managers who want to use a cobranding strategy in brand transitions.
key issue in evaluating the effectiveness of cobranding as a strategy is to determine how the
impressions of one brand are transferred to or
affected by the brand to which it is strategically linked.
Levin and Levin (2000) argue that dual branding provides a
potentially strong context for evaluating the separate
brands. A dual branding situation involving a new component that is not well defined, yet is assumed to share the
same values as the other component, is likely to achieve the
greatest level of assimilation. The unknown brand has no
position in the minds of consumersthat is, no positive or
negative associations. It usually takes on the identity and
values of the known one. The consumer has not formed
any attitudes about it and thus associates it with the wellknown co-brand. It is important, then, for the unknown
Business Horizons / September-October 2002
brand to have the same quality and attributes as the wellknown one. If it does not, it could end up with dissatisfied
consumers, which will hurt the equity of the well-known
brand in the long run.
Park, Jun, and Shocker explored the effects of using a dual
brand and found that by combining two brands with complimentary attribute levels, the composite brand appears to
have a better attribute profile than a direct brand extension. This improved profile seems to enhance composite
brand effectiveness in influencing consumer choice and
preferences.
In making a choice, consumers are guided by a products
brand name, which serves as a cue for consumers and represents images they have formed based on past experience
with it, or on information they have obtained about it. A
variety of associations may have been developed around
brand names that are subsequently paired in a co-branding situation. Although the product may be new to the
consumer, the constituent names may not be. As a result,
the constituent brand names are used to help the consumer judge the co-branded product in the absence of any
other information. Co-branding and the links it creates
can either enhance or detract from consumer perceptions
of each constituent brand, and can create a new, unique
perception of the co-branded products.
Washburn, Till, and Priluck (2000) found that consumers
attitudes toward a particular brand alliance influenced
their subsequent attitudes toward the individual brands
that were part of the alliance. They also found that attitudes toward the partner brands prior to the alliance significantly affected attitudes toward the alliance.
Simonin and Ruth evaluated consumer attitudes toward
brand alliances and concluded that prior brand attitudes
as well as product and brand fit are related to attitudes
toward the brand alliance. They also found that brand
familiarity plays a key role in understanding brand
alliance evaluations and their spillover effects. In cases
where one brand in the co-branding situation is more
salient because of familiarity through advertising, it will
exert more influence on an evaluation of the composite
brand. If both brands are highly familiar, they contribute
equally to consumer evaluation of the alliance.
The study
ur study focuses on two cases in which co-branding was employed to introduce new international
brands into the South African market. The brands
were Danone, a French maker of yogurt, and McCain
Foods, a Canadian frozen food company. The choice of
local companies was determined by the fact that both
have huge brand equity with their current brands. Clover
McCain Foods
In the year 2000, the total frozen vegetable market was valued at around R371 million (US$37 million). I&J dominated the market with a 66 percent volume share, while
the next biggest players, the retailer brands (Pick n Pay,
Shoprite Checkers, and Woolworths), accounted for
another 15 percent. From 1999 to 2000, the market experienced a steady decline in overall market
volume. Simultaneously, the fresh vegetable category was experiencing both
volume and value growth, mainly
because consumer preferences were
changing as consumers became more
health conscious. Frozen vegetable woes were further
compounded by the fact that fresh vegetables were receiving a lot of support from most major retailers.
Market penetration of frozen vegetables was fairly low at
around 35 percent. Despite this low penetration, however,
I&J was a very well recognized name among both consumer buyers and non-buyers. Spontaneous awareness
among buyers was in excess of 90 percent. Previous consumer research had indicated that I&J was synonymous
with frozen vegetables among consumers who had them
in their consumption profile. In fact, the I&J brand name
was closely associated with frozen foods in general.
There was relatively little activity in the frozen vegetable
market, and although I&J was the market leader it showed
virtually no evidence of innovation. With the market in
decline, I&J had to refocus its strategy on its core business,
frozen fish, so it placed its frozen vegetable division on
the market.
In July 2000, a deal was clinched
between I&J and McCain Foods of
Canada for McCain to become the new
owner of the frozen vegetable division. A world-renowned producer of
french fries and other frozen products, McCain
acquired the frozen vegetables and potato section of I&J
in an acquisition that involved both the food services
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division and the retail division. Foreign-owned and foreign-based, McCain was virtually unknown in the South
African market. Moreover, although it was internationally
famous for its potato products, it was fairly new to frozen
vegetables. (Apart from Australia, the South African market
was the only place where it had taken on that category).
This meant there was no equity for the McCain brand
name in South Africa, whereas the I&J brand name had
substantial equity there. I&J products themselves were
sold under a spread of well-known names such as Young
and Tender, Harvestime, Table Top, and Catercraft. In
terms of I&Js brand portfolio, the sales volume share
structure was as follows: Young & Tender had 25.4 percent, Table Top 15.3 percent, and Harvestime 15 percent.
(Catercraft was very small at around 0.9 percent, and was
focused mainly on the catering industry).
The main concerns McCain had to contend with in
launching its brand in South Africa were:
I&J continuing to own the frozen fish category as well
as prepared foods. The fact that the I&J brand name
would still appear in frozen food retail outlets might
cause some confusion in consumers minds.
The challenge of efficient and effective brand transition. McCain wanted to make the transition as soon as
possible so that consumers would adjust fairly quickly
to the change. It did not want to prolong the process.
The issue of how to package the McCain brand name
to increase the chances of consumer acceptance.
The question of how to maintain the current consumer
base in I&J frozen vegetables, while at the same time
creating buy-in for the McCain brand.
Qualitative research was conducted in September 2000,
the primary focus of which was to understand (a) levels of
brand awareness for I&J frozen vegetables, (b) consumer
perceptions of the frozen vegetable market, (c) consumer
product preferences, (d) brand usage, and (e) consumption patterns. The researchers held eight focus group discussions with about 10 participants in each. Respondents
were taken from both buyers and non-buyers and were
spread across various demographic groupings. Apart from
the specific objectives mentioned above, the research was
also used as an opportunity to test the waters for the
McCain brand. In the initial research stages, consumers
were asked to respond to a number of questions about
their views on frozen vegetables and their favorite brands.
It became clear that I&J was a first choice in terms of
frozen vegetables for all consumer buyer groups.
Having completed the brand-specific research, consumers
were asked to sort the following brand packages into similar groups: Woolworths, Pick n Pay, Shoprite Checkers,
Top Crop, Young and Tender, Table Top, and Harvestime.
Consumers tended to group the better-known retailer
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brands together, with the exception of Woolworths (perceived as premium quality), which was grouped together
with the I&J brands. The exercise was repeated shortly
after, but it now included a McCain package, whose
graphics were very similar to those of I&J Young and Tender. The researchers found consumers again grouping the
retailer brands (Shoprite Checkers and Pick n Pay). Harvestime and Table Top, with similar pricing, were grouped
together, whereas Woolworths was classified alone. The
tinue to enjoy the same quality as they had come to expect from I&J. At the end of the third month after launch,
the 40mm strip was to be removed from the packages.
Advertising research suggested that after three months
there was still confusion as to what the brand name was.
Some consumers had clearly not made the mental switch.
Many still believed the brand was I&J. They had not fully
grasped the fact that a brand transition had occurred,
mainly because of the similar package colors and designs.
Clover Danone
Danone entered into the South African market in December 1995 through the purchase of a share in the Clover
company, South Africas leading fresh dairy producer. In
December 1997, an agreement was
signed with Clover to start up a company called Danone Clover, with 55
percent of the capital held by Danone
and 45 percent by Clover. At that time,
Clover was the biggest yogurt producer in South Africa,
with a 48 percent volume share. The next largest competitor had only a 15 percent share.
Although unknown in the South African market, Danone
was a very strong brand internationally. Similarly, Clover
was a solid brand in the South African market, having
very strong positive associations with dairy products. Previous consumer research had also indicated that consumers perceived Clover to be a high-quality brand.
In March 1998, Danone launched its first brand in South
Africa, Danone Corner yogurt. It was perceived as a very
innovative product for South Africans and helped gain
some brand recognition for Danone. The launch was
heavily supported on television and in print media, which
probably helped in terms of creating awareness for the
Danone brand. Danone still needed to co-brand with
Clover, however, because it could not maintain the high
cost of promotion and advertising for all the products,
especially the more mature ones. Co-branding, it believed,
would be the most cost-effective approach.
The strong launch of this new product, and the fact that
Danone owned more stock than Clover, convinced
Danone to capitalize on its success, and it began to
research the possibility of incorporating the Danone brand
name into all the traditional
Clover fruit yogurts. Consumer
studies, both qualitative and
quantitative, were conducted
in order to explore a number
of consumer perceptions of the two brands
involved. The research primarily sought to understand
consumers views on Clover the brand as well as Clover
yogurts. In terms of branding, the specific questions
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Figure 1
Comparative analysis of company co-branding strategies
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McCain / I&J
Clover Danone
Packaging implications
Implementation of process
Evaluation of process
Figure 2
Brand transition process using co-branding
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50
Park, C. Whan, Sung Youl Jun, and Allan D. Shocker. 1996. Composite branding alliances: An investigation of extension and
feedback effects. Journal of Marketing Research 33/4: 453-466.
Rao, Akshay R., Lu Qu, and Robert W. Ruekert. 1999. Signalling
unobservable product quality through a brand alley. Journal of
Marketing Research 36 (May): 258-268.
Simonin, Bernard L., and Julie A. Ruth. 1998. Is a company
known by the company it keeps? Assessing the spillover effects
of brand alliances on consumer brand attitudes. Journal of
Marketing Research 35/1 (February): 30-83.
Washburn, Judith H., Brian D. Till, and Randi Priluck. 2000. Cobranding: Brand equity and trial effects. Journal of Consumer
Marketing 17/7: 591-604.