Making the invisible visible: a study on ingredient branding in the automotive industry : An experimental study in the automotive industry

Abstract: In a competitive environment, ensuring to provide high quality can be considered as one of the key objectives of the organizations. For guaranteeing that, the firms should communicate efficiently regarding quality, in order to influence the consumers´ perception towards quality. A high perception of quality requires a strong brand, which should guide the consumers in their choice and let them to refuse the competitors. Among the different strategies that can be put in place by the firms, co-branding is a joint strategy that is trying to combine the value of both brands in a synergy effect. Ingredient branding is a type of branding that entails the use of a component from one brand in a product of another brand, moreover these stimuli that are influencing the consumers´ behaviour. This stimulus will impact the quality perception of the brand and the consumers´ willingness of choosing the brand, therefore the brand would be preferred to other brands and make the consumer be loyal to the host brand. This study was conducted by employing a quantitative approach based on an experimental design with a focus on the automotive industry. A survey was distributed among students and young professionals, which are considered as actual or prospective car buyers. A total of 116 responses contributed to the sample of this research. The findings show that an ingredient brand with high perceived quality can increase the perceived quality of the host brand and that the increased quality of the host brand can lead to brand loyalty.