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Linking reputations through umbrella branding

  • Jeanine Miklós-Thal


This paper develops a theory of umbrella branding as a way to link the reputations of otherwise unrelated products. The analysis predicts that umbrella branding can credibly signal positive correlation between the qualities of the included products to consumers, but cannot certify high quality or signal negative quality correlation. Moreover, whenever umbrella branding signals perfect positive quality correlation, firms that already sell a high (low) quality product have stronger (weaker) incentives to invest in developing another high quality product than new entrants. Copyright Springer Science+Business Media, LLC 2012

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Article provided by Springer in its journal Quantitative Marketing and Economics.

Volume (Year): 10 (2012)
Issue (Month): 3 (September)
Pages: 335-374

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Handle: RePEc:kap:qmktec:v:10:y:2012:i:3:p:335-374
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  18. Birger Wernerfelt, 1988. "Umbrella Branding as a Signal of New Product Quality: An Example of Signalling by Posting a Bond," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 458-466, Autumn.
  19. Sappington, David E M & Wernerfelt, Birger, 1985. "To Brand or Not to Brand? A Theoretical and Empirical Question," The Journal of Business, University of Chicago Press, vol. 58(3), pages 279-93, July.
  20. David Kreps & Robert Wilson, 1999. "Reputation and Imperfect Information," Levine's Working Paper Archive 238, David K. Levine.
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