RT Journal Article
T1 Brand value in horizontal alliances : the case of twin-cars
A1 Esteban Bravo, Mercedes
A1 Lado, Nora
AB Rival firms often cooperate horizontally in order to share risks and achieve scale advantages inproduction or in their research and development projects. The output of these strategic alliances isusually sold by the individual ally company under its own brand and using its own marketing mixstrategies. Marketing strategies create a cumulative effect that is reflected in brand value. Althoughhorizontal alliances often have a significant overall impact on firm profitability, undesired brand valuedilution is a worrisome possibility for the partners and therefore a relevant subject of study. In thispaper, we consider brand value to be the economic added value of a brand, and propose two marketbasedmeasures of brand value: (1) price premia (which are relevant for a unit sale) and (2) revenuepremia (which also account for the premia in sales volume). We apply this analysis to the Spanish marketfor new automobiles, in which successful and long-lasting horizontal alliances have formed. Our findingssuggest that, during the introduction stage of the product life cycle, horizontal allies did not chargedifferent price premia, but that horizontal allies profit from differences in brand reputation obtainedfrom demand side effects such as revenue premia (specifically, the impact on sales volume).Consequently, horizontal cooperation among brands does not dilute their value at the introductionstage. Furthermore, our results suggest that horizontal allies do charge different price premia during thegrowth stage of the product life cycle. Consequently, horizontal allies have recognized strategies that donot dilute brand value in intense competition mitigating the brand value diluting risk
PB Palgrave Macmillan
SN 0160-5682
YR 2011
FD 2011-08
LK https://hdl.handle.net/10016/12259
UL https://hdl.handle.net/10016/12259
LA eng
DS e-Archivo
RD 20 may. 2024