Businesses can use co-branding as a leveraging strategy over their competition. Kevin Keller, author of Strategic Branding Management, maintains that brand equity is fundamentally determined by the brand knowledge created in consumers’ minds by the supporting marketing program.
Here’s an example of this approach. Seeing our last child graduate from high school and progress to college, my wife and I are able to drive something other than a minivan. Currently, I drive an Infiniti I30t to work on my commute. Although it has over 100,000 miles, the vehicle runs like a luxury sports car. Infiniti is a luxury division of the Japanese automaker Nissan. Nissan’s marketing strategy is to provide premium status to its vehicles with luxury content and high performance. What is interesting is this Infiniti brand is not promoted within Japan. Given this reality, brand equity is critical.
Nissan is building from this premise. In fact, its business strategy is to target the luxury segment in the United States that would not fit with Nissan’s mainstream brand. In fact, the Japanese government imposed voluntary export restraints for the United States markets so that it is more profitable to export cars abroad. Therefore, Nissan is building its sub branding through the premium Infiniti brand.