Abstract
Marketers often think that co-branding is a good strategy to bring benefits for their brands, especially the neutrally perceived brand likes to release new products with a positively brand logo. Would consumers’ evaluation toward positively perceived brands be influenced under co-branding strategy? Fewer people discuss this situation. Therefore, in this study we want to know if a positively perceived brand can still be evaluated so positively after co-branding? The present study uses Reciprocity Hypothesis, an extended application of context effect, to examine under what condition the consumers’ judgments of positively perceived brand will be influenced by the neutrally perceived brand and assimilation or contrast effect will occur when context and target brands work together under co-branding. As a result, the findings of experiments in the present study demonstrated that when positive brand was a piece of information included in the neutral brand, and there was an overlap between the interpretation of positive and neutral brand in product quality, assimilation will occur. That is, under above conditions, the positive brand would be evaluated less positive. However, under the other conditions, such as that when positive brand was the information excluded in the neutral brand, and there was a non-overlap between the interpretation of positive and neutral brand, the contrast will occur. Therefore, when marketers of positively perceived brands cooperate with those of neutrally brands through co-branding strategy, they need to consider carefully to avoid brand dilution happening.