Abstract
Retailers have used celebrity endorsement (CE), an advertising strategy, for several decades to advertise the retailer’s brand or their private labels (PL); however, the emergence of celebrity co-branding (CCOB), a branding strategy, in combination with PL is a relatively new trend worldwide. Evidence from practice indicates that the most successful co-branded premium PL are the ones offering a wide range of products. Apart from superior brand management, this trend might be a result of consumers’ perceived impact of CCOB increasing with the number of products co-branded by the same brand allies. The existing CE, CCOB, and traditional co-branding literature have not yet addressed the effect of multiple applications of any of these strategies on a range of products within the same brand (i.e., celebrity application frequency). However, applying existing findings on the effect of one endorser recommending many different brands to our research context, we hypothesize a negative impact when a spokesperson endorses multiple products within a brand. We propose that consumers perceive CE and CCOB differently when the number of endorsed or co-branded products increases. Indeed, our experiment reveals an interaction between celebrity application type and celebrity application frequency but no main effects. This finding indicates that when either strategy is applied multiple times within the same brand, product evaluations increase in the case of CCOB and decrease in the case of CE.
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- 1.
Regarding the appropriate quality level of the supermarket chains that should consider CCOB for their premium PL, we made the following observations: (i) industry examples show that such cases are most successful for service-oriented retailers; (ii) in turn, service-oriented vis-à-vis price-oriented retailers are more likely to chain-label their premium PL (Kumar and Steenkamp 2007). Therefore, service-oriented retailers are more likely to realize benefits from the spillover effects of co-branding than price-oriented retailers. If chain-labeling is applied, CCOB might not only improve the sales of the co-branded products but also affect the image of a retailer, via spillover effects on store image. Furthermore, second-order spillover effects on the whole PL portfolio might occur (Reimann and Wagner 2016a). We also assume that retailers who use the same PL name for all categories instead of category-based labelling (e.g., price-oriented retailers like ALDI or LIDL who employ the same brand names only within a category) will further boost such benefits.
- 2.
Previous research indicates a convergence between perceived quality perceptions of PL and NB in some countries and some product categories (Steenkamp et al. 2010). This raises the question whether marketing strategies to improve quality perceptions of PL are still relevant. However, a recent study by Rossi et al. (2015) shows that at least for premium PL, the perceived quality gap still exists. Although premium PL are perceived to be of better quality vis-à-vis NB in a blind test, NB dominate in informed tests. Furthermore, some retailers position their premium PL as superior to the leading NB with regards to quality and price (Kumar and Steenkamp 2007). Hence, we believe it is relevant to investigate strategies to improve quality perception beyond the level of leading NB.
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Reimann, O., Wagner, U., Reisinger, H. (2017). The Impact of Celebrity Endorsement and Celebrity Co-branding on Perceived Quality: The Role of Celebrity Application Frequency Within a Brand. In: Martínez-López, F., Gázquez-Abad, J., Ailawadi, K., Yagüe-Guillén, M. (eds) Advances in National Brand and Private Label Marketing. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-59701-0_7
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