Consumer Brand Perception

Another important risk to consider is consumer brand perception. Opposite of the “halo of affection” is the “halo of infection”. Negative feelings toward one brand or brand owner may extend to its co-branding ally affecting its own brand integrity and reputation. Some people perceive CrossFit owner, Greg Glassman as unconventional, contrarian and “rough-edged” — and his libertarian views carry the potential for negative reactions. “Glassman doesn’t behave the way he’s supposed to. Sometimes he rebels out of cunning, other times for the sheer petulant fun of it” (9, 14). If consumers choose not to pursue CrossFit products simply because they do not like Greg Glassman, this can negatively affect Reebok as well.

Others may question Glassman’s management style. While there is a training program in place for affiliate gym owners (referred to as “box” owners), the quality and experience of coaches and the method of delivery differ throughout each box since there is no defined management system in place. Moreover, each CrossFit box has its own structure. This could potentially be problematic due to inconsistencies, quality issues, lack of defined CRM systems, and limited communication amongst boxes. Consumers may have a bad experience at one box, causing a bad impression of all CrossFit boxes, and consequently the “halo of infection” could spread to Reebok.

Brand Dilution

When two brands are combined, consumers may begin seeing the two as one. When the co-branding partnership between Reebok and CrossFit ends in 2020 it will become important to ensure brand messaging remains consistent so that it does not become diluted in consumers’ minds. It’s possible for original brand messaging to get lost in co-branding at the risk of losing core customers.

Mitigation of Risks

Management of Co-branding

In a recent conversation with Bryant Mitchell, Reebok Affiliate Relationship Manager, he stressed the importance of regular communication between upper management of both parties in establishing clear goals of the co-branding alliance and in working toward those goals for achieving optimal results. Also crucial is a good legal team who acts on behalf of each company, making certain the co-branding contract passes legal guidelines and is acceptable for both parties involved. Clear guidelines and contractual agreements that provide safeguards for participating companies are essential. These safeguards should include indemnification, warranty, and termination clauses that specify protection in worst-case liability scenarios.