The Comparison Of Brand Extension And Co-branding Based On The Technical Intersection And Brand Awareness

The rapid development of information technology, increasingly fierce marketcompetition, a constantly changing market environment and the high cost to enter a newmarket, is forcing companies to seek innovative brand strategies to make full use ofexisting brand value or to promote the new product into new market. As the most twoimportant strategies of brand management, Brand extension and the brand alliance hassuccessfully made use of existing brand value to promote the new products and toimprove the efficiency of entering a new market. At present, both The Theoretical Circleand The Practice World pay a close attention to the two brand management strategies.Based on the brand awareness and the technical intersection of new product andexisting product as the breakthrough point, This paper compare the brand extension andco-branding of well-known and unknown brand in the case of completely technicalintersection, component intersection and technology without intersection. Through thecomparison we get following meaningful conclusions:①The consumer assessment scale shows significant two-dimensional construction.Through the Exploratory Factor Analysis, we have found that both brand extension andco-branding of consumer evaluation include two-dimensional of perceived quality andpurchase intention. The Perceived quality reflects overall product quality perception andthe product functional attributes of perception, and the purchase intention displays theprocess that consumers change their behavior from passive to active.②To get a higher consumer evaluation, the prerequisite of co-branding is that theremust be a well-known brand in the alliance. The empirical results show that when twounknown brands get to be combined, the perceived quality and purchase intension is greatless than the alliance which consists of a well-known brand. This conclusion furtherconvinces the interpretation of consumer evaluation of co-branding in emotion transfermechanism, which the scholars have convinced.③The market effects of two well-known co-branding is not significantly higherthan that of a well-known and a unknown co-branding. Therefore, if there is no significantdifferences in perceived quality and purchase intension, a well-known brand should selectan unknown co-branding partner, so as to enjoy more power during contract negotiationsand likely more profit premiums.④When the existing corporate brand is well-known, and the new products and existing products is full technical intersection, the consumer evaluation of brand extensionfor the new product is higher than co-branding. According to the ceiling effect, thefamous brand has been established a high quality and function image, if the new productsis in the existing technology range, brand awareness will decide the consumer’s purchaseintention at last. Compared to the new united brand, consumers will believe that the singlebrand could provide a better quality assurance.⑤When the new product and the existing product is completely technologyintersection, and the existing brand is not famous, with a well-known brand combinationcan significantly improve the perceived quality and purchase intension for the newproduct of consumer. Statistical results indicate that, in the case of intersection of fulltechnology, brand awareness is the most important factor that affecting consumerevaluation, combining with a well-known brand can effectively enlarge the market andachieve brand value.⑥Whether the existing brand is famous or not well-known, in the case ofintersection of component technology, the best choice is to co-brand with a brand withrelevant technology. In the high-tech industry, the technology intersection is the mostimportant factor which affects the consumer evaluation. When the new product and theexisting product is only part of technical intersection, combination with a brand intechnology could bring a greater surprise for the company.⑦If the new product and the existing product is completely without technicalintersection, in order to achieve the expansion of the market, a well-known brandenterprise should co-brand with a unknown brand in the relevant industry. The studyindicates that, in no technical intersection, Even a famous brand goes cross-industryextensions, it will damage the brand image which has been built in the market. Theconsumers will be sensitive to its extended purpose, and then they will feel cheated,resulting in resentment.