The effects of value chain expanded brand communication on innovation acceptance

Ingredient branding (IB) is a strategy between a component supplier and an original equipment manufacturer (OEM) where both companies promote components and final products together. The purpose of this paper is to analyse the spill-over effects from the consumer perception of the supplier, the component and final product and how these effects influence the end user's intention of buying. Therefore, the study uses Partial Least Squares as a method to evaluate causal dependency between different perceptions of the component and final product. The findings show that the perception of innovativeness of the supplier changes the perception of the component and a positive expectation of the component allows the consumer to judge the final product positively. These effects have an impact on the intention of buying. One limitation of this work is that the study only analyses material innovation in the sports markets. However, it could be shown that supplier and OEM should, in order to increase the adoption of their joint offering, not only focus on technical or physical aspects of the material but also on the metaphysical enrichment and the possible spill-over effects. Therefore, this study throws light on the partnerships created between suppliers and OEMs.