Launching a new brand: Is partnering with a popular brand a good idea?

If you're trying to sell a new brand of cereal, teaming up with Kellogg's or General Mills would seem like a really great idea. However, a new study in the Journal of Consumer Research shows that partnering with established brands may not always benefit new brands.

"Our findings call into question a cornerstone of marketing practice. There are times when partnering with an existing brand can actually be detrimental to a new brand. Because an established brand gets more attention from consumers, this can prevent consumers from associating any benefits of the partnership with the new brand," write authors Marcus Cunha Jr. (University of Georgia), Mark R. Forehand (University of Washington), and Justin W. Angle (University of Montana).

In three studies, consumers either learned about a new brand announced as part of a partnership with a popular brand or they learned about the new brand in isolation. When a new brand partnered with an existing brand and announced this immediately, consumers viewed the new brand less favorably than when they learned about the new brand in isolation. However, when the announcement was delayed, consumers viewed the new brand that had partnered with an existing brand more favorably.

Companies should carefully manage the presence and timing of performance promises when promoting brand partnerships. When including brand partnership and performance information in a single advertisement, performance promises should be made at the end of the advertisement. However, new brands may want to avoid print advertisements when advertising brand partnership performance because there is no delay between announcing the partnership and its promised benefits.

"Partnering with an existing brand can be beneficial for a new brand, but this is not always the case. New brands should avoid announcing partnerships with established brands that immediately communicate information about the benefit of the partnership because consumers will not associate the new brand with that benefit. Companies should understand when partnerships help and when they hurt," the authors conclude.

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Marcus Cunha Jr., Mark R. Forehand, and Justin W. Angle. "Riding Coattails: When Co-Branding Helps versus Hurts Less-Known Brands." Journal of Consumer Research: February 2015. For more information, contact Marcus Cunha Jr. (cunhamv@uga.edu) or visit http://ejcr.org/.