| This dissertation, composed of two chapters, provides theoretical frameworks for analyzing branding strategies from perspectives of reputation management. Brand is one of the most valuable intangible assets a firm can possess, and many firms invest heavily to build and maintain strong brands. In particular, brand can serve as a vehicle of reputation if quality of a product is unobservable to consumers. Provided with consumers' uncertainty, the firm can build a reputation for quality with its brand, which can convey some information to consumers. Therefore, in order to identify the optimal branding strategy, firms need to understand how the strategy will affect its reputation.;The first chapter, a joint work with Zvika Neeman and Aniko Oery, examines a branding decision of multiple firms in a single product market. Firms can decide between selling their products under different (i.e. individual) brands and under the same (i.e. collective) brand. Consumers interacting with a collective brand cannot distinguish between the identity of its firms who consequently have incentives to free-ride on one another's efforts required of maintaining good collective reputation. Despite the free-riding incentives, this chapter shows that a collective brand may provide more investment incentives than an individual brand can. It also provides economic implications for which market and industries firms benefit more from a collective brand.;The second chapter explores branding decision of a single firm in multiple product markets. The firm decides whether to sell its products under the same brand (umbrella branding) or different brands (independent branding). If the firm used an umbrella brand, its performance in one product market induces spillover to other markets because through the same brand name consumers are able to pool their experiences across different products. As a key tradeoff in using an umbrella brand depend on the relatedness between product markets, this chapter investigates how the firm should make branding decision based on market-relatedness. Based on stylized patterns, it provides a new theoretical framework for market-relatedness. It is shown that umbrella branding is optimal for an intermediate market-relatedness. However, if the product markets are closely related, independent branding can be optimal. This chapter also provides managerial implications for a firm's brand architecture choice between a branded house (umbrella branding) and a house of brands (independent branding).;If a brand name is shared with another firm (the first chapter), or with another product (the second chapter), the firm's reputation is exposed to a certain externality, for which it needs to account in order to manage its reputation optimally. This dissertation contributes to the literature in reputation and branding by investigating settings with these reputational externalities through consumers making inferences based on the same or different brand names. |
