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During the last decade branding has developed to be one of the main focus areas in consumer marketing. In the industrial marketing area there has only been limited attention to this phenomenon. In this paper we focus on how co-branding can be used on industrial markets to increase value. Through an empirical study of professional purchasers' attitudes towards co-branding activities between two companies, we explore the potential of this strategy

Classical theories of brand management generally focus on how companies can build strong consumer brands that differentiate one seller from another (e.g., Aaker, 1996 and Kapferer, 1997). Traditionally brands have been considered as the means of establishing a desired position in the minds of the customers that through perceived added values ( Brown, Shivashanker, & Brucker, 1989) could attract loyal customers that willingly pay a price premium for the product or service ( de Chernatony & McDonald, 2003). The majority of contemporary branding theories have been developed with an eye to consumer markets. While brand management is recognized as a core competence in consumer marketing that can determine the success of a company, its significance in industrial markets is far less explored ( Martinez & de Chernatony, 2004 and Mudambi, 2002). Although many of the branding principles that apply for consumer markets also can be applied on industrial markets, there are however significant differences, especially with regards to the buying process. Among brand builders, we have seen an increasing interest for engaging in brand partnerships. Through the use of co-branding, where two or more brands endorse each other in the marketplace, companies seek to build brands more successfully compared to what each of the partner brand could do on their own hand. Co-branding is used extensively in consumer markets, especially on the U.S. market where it is a common strategy among food manufacturers. As the importance of brands has spread to industrial markets, there are also examples of co-branding activities between firms whose customers are industrial buyers. In this article, we will explore the potential effects of co-branding on industrial markets. First, we will provide a review of co-branding research. Thereafter follows a discussion of branding and its relevance for industrial markets. We will then present a case study of two Danish companies and their co-operative branding activities. Implications and future research is discussed.

The results from the empirical study vividly illustrate that co-branding on industrial markets can be a viable strategy. Instead of being rational, utility maximising decision makers, we can see how purchasers of these particular products can be influenced by co-branding activities. In the particular case of co-branding between DEVI and JUNCKERS, it is interesting to observe that both companies can gain a different position in the network from the cooperation. DEVI gains some credibility through co-operation with the somewhat stronger brand JUNCKERS. As the results indicate, JUNCKERS market position is not necessarily improved through co-branding with DEVI. However, it helps to eliminate the myth about the incompatibility of wooden floors and floor heating and gives more trustful relations to the buyers. Given the importance of branding on industrial markets, more studies focusing on industrial purchasers and the perception of brands and image is desirable. In the area of co-branding, most prior research has focused on consumers exclusively and there is therefore an interesting avenue to further examine the effects of this strategy on industrial markets particular on the identity and position of firms in networks. When researching brand strategies and their potential effects, it is important to consider this in a broader stakeholder perspective. Consumers are clearly one stakeholder, and indeed an important one, that it is necessary to have knowledge about in order to build strong brands. However, besides consumers, there are many other stakeholders, such as industrial purchasers, which rely on brands they trust. Branding of course also has some limitations. As mentioned earlier branding cannot eliminate tangible aspects of the product, but it can highlighting some aspects of the offer and is an important factor in reducing the uncertainty by buyer. On the other hand inducing brands not known to the buyers could also be a hazardous affair. In the case of DEVI and JUNCKERS if DEVI was producing unreliable products JUNCKERS would be in serious trouble trying to endorse these products on the market and perhaps even destroy their own brand in the long run. In the empirical study we have only studied two firms' co-branding activities and the perception of the buyers. Since there are more producers of wooden floors and electrical heating systems it would be of interest to study their reaction to this initiative of co-branding and what kind of long term effects that could have occurred in relation to the position of the actors in the network. Finally we have been studying the perception of independent buyers in relation to branding and co-branding initiatives. As stated previously buying decisions are seldom made independently by buyers in the procuring firms, hence it will be necessary to study the perception by the members of the buying centre of the co-branding initiatives. Hence an interesting area of further research would be investigate into the different perceptions of co-branding initiatives not only by internal buying centre members but also by external members and above all to analyse the interplay between the different opinions held.