Consumers' evaluations of co‐branded products: the licensing effect

Purpose – This paper seeks to establish the importance of studying the effects of licensing brand alliances from a customer's standpoint, to investigate the effectiveness of licensing as a strategy by comparing it with a brand extension of a well‐known parent brand, and to provide a theoretical explanation for the licensing effects. Design/methodology/approach – In Study 1, subjects' attitudes were measured towards a lesser known brand with and without licensing by Sony, and Sony alone in a three‐factor (licensing, no licensing, and Sony) between‐subjects design. Study 2 compared a licensed brand with a brand extension of a well‐known brand using the Chow test. Findings – A brand “licensed by Sony” was evaluated higher than without licensing. Moreover, no difference was found between evaluation of a brand licensed by Sony and Sony alone. Study 2 revealed no significant difference between the data collected from a licensed brand and a well‐known brand extension, suggesting that being a licensed brand in some cases may be as effective as being an extension of a well‐known brand. Research limitations/implications – The research examined the effects of strong brand names (e.g. Sony). It would be interesting to extend the findings by examining the brand names that are perhaps less strong (e.g. Samsung) to test the generalizability of the research. Practical implications – For lesser‐known brands, licensing could be a viable strategy to increase their brand evaluation. Originality/value – For new brands, this paper provides evidence that licensing is a viable strategy, and also provides a theoretical explanation for the licensing effects.