This is a short version of my master's thesis.

1. "Impact of Co-Branding on Brand Equity and Luxury Perception (A Short Version)"
by
Eun Hee Ko and James J. Kellaris, University of Cincinnati
2007
Abstract
There are little facts about the role of the co-branding in brand perception when two brands
have partnership until now. Our study tested consumers’ perception toward co-branded
products in terms of brand equity and luxury perception. The results showed that luxury
perception of a necessity good’s brand partnered with a luxury brand increases. Brand equity
of a necessity good’s brand doesn’t change after the pairing whereas luxury perception of a
luxury brand participating in co-branding strategy with a necessity good’s brand decreases
after the alliance.
Introduction
Co-branding is an increasingly popular strategy a marketer uses in attempting to transfer the
positive association with partner brands. The purposes of co-branding strategy can be diverse
depending on a company’s situation, but in general the philosophy behind co-branding is to
attain advanced market share, increase the revenue streams, and improve competitive
advantages through customer awareness (Chang, 2009). Recent study (Bouten, Snelders, and
Hultink, 2011) investigated that consumers’ perception toward a new product with two
brands and found out that consumers prefer a new co-branded product that can be clearly
associated with one of the brands in the partnership so that it can be categorized
unambiguously. The paper is organized into two studies. The first study explores consumers’
perceptions’ toward a co-branded product and measures the perceptions using a brand equity
scale and a luxury perception scale. The second study further explores the differences
between two distinct cultural spheres. The experimental survey will test how consumers
perceive a co-branded product, when a necessity good’s brand has partnership with a luxury
good’s. The expectation is that consumers perceive that a co-branded product has higher
brand equity and luxury perception than a necessity product due to its pairing with a luxury

2. product.
Methods
Participants
There were 405 participants participating from American and S. Korea. 207 participants in
America were recruited in undergraduate classes at University of Cincinnati Business School
and given extra credits as reparation for their participation. 198 participants in S. Korea were
recruited through the most popular social media, Cyworld, and were paid cyber money
valued at $5.00.
Procedures
The present study used an experimental questionnaire including an imaginary scenario, where
two brands have partnership, where one band is a necessity good and the other is a luxury
good. Participants were first instructed to read the scenario and then asked to answer to the
questions regarding how they perceive the partnered brands. Respondents were also asked
how they perceive each of the brands participating in the paring before and after the pairing.
Two measurements scales were used to assess consumers’ perception, one is brand equity
scale by Yoo and Donthu (2001) and the other is luxury perception scale by Vigneron and
Johnson (2004).
Hypotheses
H1: Low-equity brands partnered with high-equity brands will have higher brand-equity
ratings than prior to the paring.
H2: Low-luxury perception brands partnered with high-luxury perception brands will have
higher luxury perception ratings than prior to paring.
H3: The brand alliance between high-equity brands and low-equity brands will not affect the
brand equity of the brands which have low brand equity.
H4: The brand alliance between high-equity brands and low-equity brands will not affect the
brand equity of the brands which have high-brand equity.
H5: The brand alliance between high-luxury perception brands and low-luxury perceptions
brands will not affect the luxury perception of the brands which have low luxury perception.

3. H6: The brand alliance between high luxury perception brands and low luxury perception
brands will not affect the luxury-perception of the brands which have high luxury perception.
Results
Study 1 – General Analysis
(i) H1 - Brand Equity: Samsung vs. Samsung partnered with Porsche (Table 1)
Analysis results showed that Samsung brand partnered with Porsche has higher brand
awareness than Samsung brand (t = - 3.076, p < .05), whereas Samsung brand partnered with
Porsche has lower brand loyalty than Samsung (t = 7.862, p < .05). In addition, Samsung
brand partnered with Porsche has higher perceived quality than Samsung but it is not
statistically significant enough (t = -0.394, p > .05).
(ii) H2 – Luxury Perception: Samsung vs. Samsung partnered with Porsche (Table 2)
Both luxury perception 1 (t = -4.375, p < .05) and luxury perception 2 (t = - 9.222, p < .05)
are higher in Samsung brand partnered with Porsche than in Samsung. Therefore, it can be
said that Samsung brand partnered with Porsche has higher luxury perception rating than
prior to the paring.
Table 1. Brand Equity: Samsung vs. Samsung + Porsche Table 2. Luxury Perception Samsung vs. Samsung + Porsche
Group N Mean S.D. p Group N Mea S.D. t-value p
t - value n
Perceived Control group 103 5.44 1.10 -0.394 0.694 Luxury Control Group 102 3.84 1.64 -4.375 0.00
quality Perception 0***
Samsung+ 111 5.50 1.23 1
Porsche Samsung + 110 4.80 1.54
Awareness Control Group 100 3.77 1.69 -3.076 0.002 Porsche
** Luxury Control Group 98 4.09 1.06 -9.222 0.00
Samsung+ 111 4.49 1.74 Perception 0***
Porsche 2
Samsung + 107 5.43 1.01
Loyalty Control Group 95 5.58 1.33 7.862 0.000 Porsche
***
Samsung+ 109 3.81 1.87
*
Porsche p<0.05 ** p<0.05 *** p<0.05
*
p<0.05 ** p<0.05 *** p<0.05
(iii) H3 - Brand equity of Samsung after the paring (Table 3)
The results revealed that Samsung’s perceived quality (t = 1.166, p> .05), brand awareness (t
= -0.403, p>.05), and brand loyalty (t = 1.901, p>.05) do not change after the brand pairing
with Porsche.
(iv) H4 - Brand equity of Porsche after the pairing (Table 4)

4. Perceived quality (t = 2.431, p < .05) and brand awareness (t = 2.572, p<.05) of Porsche
have declined after the brand participated to the brand alliance with Samsung. On the other
hands, it turned out that its brand loyalty (t = -1.271, p>.05) does not change after the pairing.
Table 3. Brand Equity of Samsung after the pairing Table 4. Brand Equity of Porsche after the pairing
group N Mean Standard t-value p group N Mean Standard t-value p
Deviation Deviation
Perceived Control 103 5.44 1.10 1.166 0.245 Perceived Control 99 6.40 1.09 2.431 0.016*
Quality Group Quality Group
Samsung 103 5.24 1.34 Samsung 97 5.99 1.26
+ +
Porsche Porsche
Brand Control 100 3.77 1.69 -0.403 0.687 Brand Control 98 5.66 1.42 2.572 0.011*
Awareness Group Awareness Purpose
Samsung 102 3.85 1.40 Samsung 96 5.05 1.81
+ +
Porsche Porsche
Brand Control 95 5.58 1.33 1.901 0.059 Brand Control 98 3.65 1.88 -1.271 0.205
Loyalty Group Loyalty Purpose
Samsung 103 5.19 1.53 Samsung 96 3.99 1.84
+ +
Porsche Porsche
*
p<0.05 ** p<0.05 *** p<0.05 *
p<0.05 ** p<0.05 *** p<0.05
(v) H5 – Luxury perception of Samsung after the pairing (Table 5)
It is discovered that there is not a significant difference between the Samsung’s luxury
perception 1 (t = - 1.880, p> .05) and luxury perception 2 (t = -0.727, p>.05) measured by
control group and the ones measured by the group who was exposed to the brand alliance
scenario.
(vi) H6 – Luxury perception of Porsche after the pairing (Table 6)
The analysis showed that Porsche’s luxury perception 1 (t = 2.733, p< .05) and luxury
perception 2 (t = 2.568, p<.05) have declined after the brand alliance with Samsung.
Table 5. Luxury perception of Samsung after the pairing Table 6. Luxury perception of Porsche after the pairing
group N Mean Standard t- p group N Mean Standard t-value p
Deviation value Deviation
Luxury Control 102 3.84 1.64 - 0.061 Luxury Control 94 5.87 1.21 2.733 0.007**
Perception 1 Group 1.880 Perception 1 Group
Samsung + 102 4.26 1.52 Samsung + 97 5.29 1.69
Porsche Porsche
Luxury Control 98 4.09 1.06 - 0.468 Luxury Control 97 6.35 0.73 2.568 0.011*
Perception 2 Group 0.727 Perception 2 Group
Samsung + 102 4.21 1.27 Samsung + 95 5.97 1.24
Porsche Porsche
*
p<0.05 ** p<0.05 *** p<0.05 *
p<0.05 ** p<0.05 *** p<0.05

5. Study 2 – Cross-cultural analysis
(i) Brand equity: Samsung vs. Samsung partnered with Porsche: America vs. S. Korea
(Table 7)
The results said that Korean consumers perceived that Samsung brand has a higher quality
rather than Samsung brand partnered with Porsche (t = 2.181, p <.05), whereas American
consumers perceived the partnered brand has a higher quality than Samsung (t = -3.257, p
<.05). In case of brand awareness, Korean consumers showed lower awareness of Samsung
partnered with Porsche than Samsung but the difference is not significant enough (t = 1.261,
p>.05). On the other hands, American consumers showed higher awareness of the partnered
brand rather than Samsung brand (t = -7.225, p<.05). Lastly, brand loyalty of Samsung
became significantly lower after the brand alliance in the results both from Korean consumers
(t = -8.268, p<.05) and from American consumers (t = 2.787, p <.05).
Table 7. Brand equity: S. Korea vs. U.S.
Variables Groups S. Korea U.S.
Mean S.D. Mean S.D.
Perceived Quality Control group 5.64 0.93 5.15 1.27
Samsung + Porsche 5.20 1.30 5.93 0.97
t-value 2.181 -3.257
p 0.031* 0.002**
Brand Awareness Control group 4.39 1.47 2.90 1.60
Samsung + Porsche 4.02 1.83 5.19 1.36
t-value 1.261 -7.225
p 0.210 0.000***
Brand Loyalty Control group 6.01 0.98 4.99 1.53
Samsung + Porsche 3.65 2.05 4.05 1.55
t-value 8.268 2.787
p 0.000*** 0.007**
Perceived Quality Brand Awareness Brand Loyalty

6. Figure 1. Brand equity: S. Korea vs. U.S.
(ii) Luxury Perception: Samsung vs. Samsung partnered with Porsche: America vs. S. Korea
(Table 8)
Korean consumers perceived that Samsung partnered with Porsche has higher luxury
perception 1 than Samsung does, but the difference is not significant (t = -0.136, p>.05),
while American consumers perceived that the partnered brand is more luxurious rather than
Samsung in terms of their luxury perception 1 (t = -6.829, p<.05). In case of luxury
perception 2, both Korean consumers (t = -4.644, p<.05) and American consumers (t = -9.602,
p<.05) perceived that it is significantly higher in the partnered brand than in Samsung.
Table 8. Luxury Perception: S. Korea vs. U.S.
Variables Groups S. Korea U.S.
Mean S.D. Mean S.D.
Luxury Control group 4.42 1.38 3.05 1.65
Perception1
Samsung + Porsche 4.45 1.52 5.32 1.44
t-value -0.136 -6.829
p 0.892 0.000***
Luxury Control group 4.50 0.82 3.51 1.10
Perception 2
Samsung + Porsche 5.31 1.08 5.60 0.89
t-value -4.644 -9.602
p 0.000*** 0.000***
Luxury Perception 1 Luxury Perception 2

7. Figure 2. Luxury perception: S. Korea vs. U.S.
Discussion/ Conclusion
Several themes have emerged from the data collected, but the clearest ones are three. First,
luxury perception of a necessity good’s brand partnered with a luxury brand increases (H2).
Second, brand equity of a necessity good’s brand doesn’t change after the pairing (H3). Third,
luxury perception of a luxury brand participating in co-branding strategy with a necessity
good’s brand decreases after the alliance (H6). The other results are rather unclear. For
example, the change of brand equity of the brand created through co-branding strategy is
rather controversial, because the three elements consisting of brand equity, which are
perceived quality, brand awareness, and brand loyalty, showed different results in their
changes of brand equity (H1). In addition, the results from cross-cultural analyses are also
rather contentious, since the differences between Americans’ perception and S. Koreans’ one
are not transparent. For instance, Americans and S. Koreans show different luxury
perceptions toward each of the elements (luxury perception 1 and luxury perception 2) being
composed of luxury perception (Cross-cultural analysis of H2). This study has several
important practical and theoretical implications. The most important one, however, is that
when marketers want to enhance a general brand to a luxury brand, co-branding with an
existing luxury brand can be an effective strategy.

8. References
Chang, W.L. (2009) Roadmap of Co-branding Positions and Strategies. The Journal of
AmerAmerican Academy of Business, 15(1).
(Bouten, Snelders, and Hultink, 2011)
Yoo and Donthu (2001) and the other is luxury perception scale by Vigneron and Johnson
(2004)