Co-branding in the FMCG sector: Investigating the relation between brand association transfer and perceptual fit in co-branding

Abstract

Co-branding is a popular strategy for new product introductions. The main goal is to transfer brand equity from the constituent brands to a new composite brand. The strategy draws from research in brand extension and recent academic focus has been on the concept of perceptual fit. The purpose of this article is to increase knowledge of brand equity transfer in co-branding by addressing the relation between the strength of brand-specific association transfer and the degree of perceptual fit. Therefore, the article combines the theories of brand association transfer and perceptual fit and applies them on newly introduced composite brands on the Swedish market. 401 university students and employees participated in an online survey regarding three products from the FMCG sector. The findings suggest that there is a low to medium, but highly significant, correlation between brand association transfer (Full association transfer, FAT) and perceptual fit (new-product brand fit, FIT). This correlation is discussed in the article and managerial implications include that a co-branding partner should be chosen based on individual assessment, and recommendations for when to position a composite brand close to or far from the constituent brands. Suggestions for future research are provided.