Saturday, September 12, 2009

Differentiating Fungible Products Through Brand Alliances

Brand alliances can be an effective method for differentiating especially a fungible product, say like bananas. In a commodity war of declining profits and upstart retail chains, one tactic a marketer and distributor like Chiquita Banana can use to differentiate itself is by co-branding its wares with Gerber baby food, Ben & Jerry's, or Mrs. Smith's Banana Cream Pies.

Keller (2008, p 289) says that co-branding can both broaden the meaning of a product and increase its access points. Co-Branding can (p. 290) create "compelling points of difference" and create access to a higher profit margin category. Spiller and Baier (2005, p 320) note that often a manufaturing intermediary has an inelastic demand for the price of a banana in comparison to shoppers at Wal-Mart (be nervous about any 800 pound gorillas in a closet with you). This is because the cost of a banana in a Cream Pie is a small part of the total cost of the ware.

Keller, K (2008), Strategic Brand Management. Pearson/Prentice-Hall.

Spiller, Lisa and Martin Baier (2005). Contemporary Direct Marketing. Pearson/Prentice-Hall

No comments: