Umbrella Branding and External Certification

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Umbrella Branding and External Certification

In a market environment with random detection of product quality, a firm can employ umbrella branding as a strategy to convince consumers of the high quality of its products. Alternatively, a firm can rely on external certification of the quality of one or both of its products. We characterize equilibria in which umbrella branding fully or partially substitutes for external certification. We al...

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Linking Reputations through Umbrella Branding

This paper develops a theory of umbrella branding as a way to link the reputations of otherwise unrelated products. My 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 q...

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Umbrella Branding and the Provision of Quality

Consider a two-product firm that decides on the quality of each product. Product quality is unknown to consumers. If the firm sells both products under the same brand name, consumers adjust their beliefs about quality subject to the performance of both products. We show that if the probability that low quality will be detected is in an intermediate range, the firm produces high quality under um...

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Article history: In a framework of repeatedReceived 12 April 2007 Received in revised form 2 July 2008 Accepted 10 July 2008 Available online 17 July 2008

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ژورنال

عنوان ژورنال: SSRN Electronic Journal

سال: 2008

ISSN: 1556-5068

DOI: 10.2139/ssrn.1117491