The feasibility of a Co-Branding effort between Tata Motors and Fiat India in the Indian context.

Brand extension and co-branding strategies both attempt to strengthen the parent brand and extend customer value perceptions for a new product (reference).
However, a co-branding strategy might be more beneficial than a brand extension strategy, because a second brand can contribute a perception of additional value to both the co-branded product and the primary brand that the primary brand cannot achieve on its own.
In addition to this potential advantage states (reference), negative effects might occur if the combination of the two brands, either does not fit or prompts negative value perceptions (e.g. negative publicity) about one brand. This may spill over to the partner brand.
Furthermore, managing co-branded products results in greater complexity from an operational point of view, because it requires aligning the interests of at least two different stakeholders.
There are various other brand alliance strategies that can be implemented whenever co-branding is not thought to suit the purpose of the company’s objective.
These include:
- Joint sales promotions
- Advertising alliances
- Dual branding with a well known brand.
Advertising alliance strategies relate closely to co-branding strategies. Similar to a co-branding strategy, the main reasons to use other brand alliance strategies include the interdependent image improvements that accompany collaboration with a complementary partner, and signalling benefits these strategies may bring to the overall operations (Blair and Innis 1996).
Moreover, Levin (1996) finds that aligning with a well-known brand improves consumer product evaluations of unknown or well-known host brands more than does adding an unknown brand.
Therefore, consumers’ brand awareness of the partner brands has a positive and direct effect on the evaluation of the new co-branded product. Charter, Peattie and Polonsky (2002) show that perceptions of an unknown brand paired with a well-known, high-quality partners, are enhanced and translated into an increase of positive brand perception.
As we previously stated and also supported by other academics such as Hillyer and Tikoo (1995), consumers’ evaluations of a co-branded product improve if an unknown foreign brand partners with a well-known domestic brand.
Cegarra and Michel (2006) have distinguished between three different co-branding strategies.
1) The Separated development strategy, which is the alliance of several brands at the stage of the product concept development or at the assembly process phase. It is the synergy of several know-how without having to brand or sign the product at that stage.
2) The direct co-branding strategy consists of associating a second brand or invited brand to the primary brand or receiving brand. This way both brands label their products during the production phase and offer a final product that is effectively a collaboration of two brands rather than the collaboration of two firms.
The third strategy is the joint communication strategy, in which there is no actual collaboration in terms of production or product development. Both brands agree to mutual join their efforts and resource for a promotional campaign only. The purpose of this in normally to develop a more positive association to the co-branded product given a higher or more positive perception will arise in the consumer(Blair and Innis 1996).