Abstract
Ingredient branding, or the use of two or more brand names on a single product, is widely seen as providing significant benefits in terms of increased product differentiation and greater market share. The association between two brand names can both enhance and dilute the brand equity of the host brand name and the ingredient brand name. This research examines the behavioral spillover effects associated with cobranded strategies across segments of consumers that vary in their prior brand commitment or loyalty. Different from previous research, this paper uses A.C. Nielsen scanner panel data to investigate the behavioral spillover effects of ingredient branded products on choice of the host and ingredient brands in a field setting. The results suggest that there is a significant behavioral spillover impact of trial of the cobranded product on the purchase probability of both the host and ingredient brands. This effect is greater among prior non-loyal users and prior non-users of the host and ingredient brands and when there is a higher degree of perceived fit between the host and ingredient brands.
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Notes
Simonin and Ruth (1998) do not explicitly manipulate perceived fit but instead measure the extent of perceived fit and incorporate this as a covariate.
Hershey’s may be viewed as a “stand-alone” ingredient because it has an independent presence in its own category and sells directly to consumers. In contrast, Intel does not have an independent presence and cannot sell directly to the consumer.
Prior users are defined as those having bought the original host or ingredient brand at least once prior to the 6-month period in which the dependent variable P hpur was estimated. Prior non-users refer to households who did not purchase the original brands even once in the time period preceding the same 6-month period.
Please note that in the model estimated for prior non-users, the prior loyalty variable is zero and is therefore not included.
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Swaminathan, V., Reddy, S.K. & Dommer, S.L. Spillover effects of ingredient branded strategies on brand choice: A field study. Mark Lett 23, 237–251 (2012). https://doi.org/10.1007/s11002-011-9150-5
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DOI: https://doi.org/10.1007/s11002-011-9150-5