Many businesses today strive to build complex ecosystems that enable them to tap into a wide range of partners throughout the value chain. Research from the University of Illinois at Chicago explains how these ecosystems can enable firms to reach new markets.
The authors explain that the use of things such as brand extensions and co-branding can provide access to interesting new markets. They suggest that while co-branding is far from a new thing, precious few studies have been done into the benefits of it, especially between brands from different product categories.
Brand networks
The researchers utilize Twitter followership data to propose potential opportunities for brand extension and co-branding, with their approach identifying potential brand overlap between two brands.
They make these suggestions in either brand-brand or brand-category form. Brand-category connections tend to result in entering new categories, and the researchers believe these show that certain categories tend to be more viable for extensions than others. By contrast, brand-brand connections provide a more granular view of transcendence and reveal the opportunities for co-branding.
“The transcendence vector of Mercedes shows that the strongest brand-category connections of Mercedes are to luxury, technology, and sports– making them suitable categories for extensions,” the authors explain. “Then, at the brand-brand level, we find brands such as Louis Vuitton, Nike, Tissot, and Chanel to have strong connections to Mercedes, making them potential candidates for co-branding.”
Asymmetric relationships
The authors also identify the various asymmetric relationships that may provide greater benefits in a co-branding arrangement. This is because relationships between users and brands may change, so the researchers wanted to gauge the impact of such fluctuations on co-branding partnerships.
Any cross-category connections that are revealed can then be used to analyze the effectiveness of any previous marketing campaigns undertaken by the firm while also helping them to discover new partnership opportunities. They also believe that the method could help with competitor analysis so that they can understand the type of consumers their rivals might be attracting.
“Overall, the core contribution of our study is a new digital approach to analyzing audiences’ interests across a broad brand ecosystem,” the researchers conclude. “The cross-category insights generated by this approach can help researchers and practitioners avoid marketing myopia by identifying nontraditional branding opportunities that are difficult to infer from traditional survey-based approaches.”
