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Co-Branding and Purchase Intention

Introduction

Since the emergence and popularity of the concept of corporate branding in the late 1990s (Burt & Sparks, 2002), scholarly discussions on branding has been increasing within the literature. For many researchers, scholars and practitioners, branding is an important part of marketing management (Xie & Boggs, 2006; Fan, 2005), and even treated as an important tool that can assist a firm to achieve competitive advantage or corporate success (Rooney, 1995; Horan, O’Dwyer & Tiernan, 2011; Meulenbroek, Havermans, Janssen & Anneke, 2010). As the business environment is becoming more competitive, it is believed that a brand will be something that must be managed as the brand will enable a firm to effectively distinguish itself from the rest of the competitors (Uggla & Filipsson, 2009). Under that paradigm and with greater acknowledgement on the importance of branding, studies on branding is gaining greater and greater interests from scholars.

It can be observed that scholars have been trying to propose many different varieties of branding strategies, which are aimed to enhance the marketing effectiveness, reputation of a firm and the financial performance of a firm (Najmi, Atefi & Mirbagheri, 2012; Ogba & Tan, 2009). For that, one of the branding strategies increasingly receiving attentions from scholars is about the use of co-branding in the context of corporate branding (Seno & Lukas, 2007; Kippenberger, 2000). Indeed, the use of co-branding strategies is increasingly common in the new business landscape. Just to name a few examples, the co-branding strategies had been employed by these entities: InterContinental Hotels Group (IHG) and All Nippon Airways (ANA), Marriott and AC Hotels (Lin, 2013), British Museum and Seiko (D’Astous, Colbert & Fournier, 2007), Flash and Febreze (Kalafatis, Remizova, Riley & Singh, 2012), Kudo and Snicker, Ford and Eddie Bauer, Betty Crocker and Hershey, McDonald’s and Disney (Washburn, Till & Priluck, 2000), and lastly (but not limited to) Adidas and New Zealand Rugby Union (Motion, Leitch & Brodie, 2003).

Therefore it is undeniable that it can be observed that the use of co-branding is increasingly common in current commercial landscape. For that, it is well acknowledged that the literature concerning co-branding is increasing, but studies on this area however are still lacking (Lin, 2013; Kalafatis, Remizova, Riley & Singh, 2012; Cornelis, 2010). Indeed, as discussed within Thompson & Strutton (2012), it is argued that academic research on co-branding’s impact on consumer decision making is still in its infancy. For that, it is important to conduct a research to better understand about co-branding as a valid strategy to influence the purchase intention of consumers.

“Brand” Explained and Defined

“Brand”, as defined by Rooney (1995: p. 48) is “a name, symbol, design, or some combination which identifies the product of a particular organization as having a substantial, differentiated advantage”. However, that definition is just a simple view or description on the term “brand”. It is crucial to aware that a brand can mean many things to different people, and it can play several roles within the context of business management (Urde, 2003). For example, a brand is a promise, of which the promise is made by an organisation or an entity to the public or other stakeholders. It is through the ability to keep that particular promise that a brand may be strengthened or weakened (Foster, Punjaisri & Cheng, 2010; Thompson & Strutton, 2012; Muzellec & Lambkin, 2006). Then, the brand is also part of the identity of an organisation or a firm. It represents and communicates about the identity of the firm to the rest of the world (Foster, Punjaisri & Cheng, 2010; Balmer, 2001). Yet, and perhaps more importantly, a brand is useful to differentiate one organisation from the other organisations or competitors. It is through a brand that the consumers able to distinguish one firm from the other; or the product/ service offered by one firm from the product/ service offered by the other firm (Foster, Punjaisri & Cheng, 2010; Kalafatis, Remizova, Riley & Singh, 2012). From these discussions, it is obvious that a ‘brand’ is an important issue to be managed, especially when the business environment is competitive. For that, the importance of branding strategy will be further discussed in the next section.

Importance of Branding Strategy

Branding efforts by a firm means the “systematic efforts on management of behaviour, communication, and symbolism in order to achieve a favourable and positive reputation with target audiences of an organisation” (Foster, Punjaisri & Cheng, 2010: p. 409). Given that branding is crucial for the performance of a firm, companies competing under a competitive business environment have been trying variety of branding strategies to achieve their intended objectives or goals. This is not surprising given that the use of branding strategies is becoming more important in enabling a firm to compete in the ever competitive business environment in the new economy people are facing nowadays (Bikram & Kaur, 2013; Kalafatis, Remizova, Riley & Singh, 2012). However, there are several branding strategies that can be leveraged or employed. These will be discussed in the next section.

Types of Branding Strategies

Overall, there are many branding strategies that can be employed by a manager. Some of these include: internal branding (Foster, Punjaisri & Cheng, 2010; Mahnert & Torres, 2007; Punjaisri & Wilson, 2011), ethical branding (Fan, 2005), brand alliances and even and brand extensions (Lin, 2013). Each of these different branding strategies has respective advantages and disadvantages. The use of co-branding, is actually also a form of branding strategy, of which co-branding is actually one of the branding strategy fall under the category of “brand alliance”. In the next section, the use of co-branding as a branding strategy will be discussed.

Co-Branding as a Branding Strategy

As discussed earlier, brand alliances is an increasingly popular branding strategies in contemporary business management. As discussed in Rao & Ruekert (1994), brand alliances is about a strategy of using two or more brand in a single entity (product or service) in appealing to the consumers. There are many types of branding alliance strategies. Some of these variations of brand alliance strategies include: advertising alliances, bundling, co-branding, ingredient branding, as well as joint sales promotions (Lin, 2013; D’Astous, Colbert & Fournier, 2007; Cornelis, 2010; Gammoh, Voss & Fang, 2010). Among these many brand alliance strategies, co-branding is one of the most often used brand alliance strategies in commercial settings (Seno & Lukas, 2007; Kippenberger, 2000). In this section, the use of co-branding strategy in the context of marketing management will be discussed.

‘Co-branding’ explained. Overall, co-branding is the act of combining two or more independent (i.e., different) brand into a new product, service or venture (Kippenberger, 2000), with the aim to improve the value of co-branded products and services (Lin, 2013). Often, the two brands engage in a co-branding arrangement are known as the constituent brands, while the new co-brand (associated to a separate and unique product) is known as the composite brand (Washburn, Till & Priluck, 2000; Park, Jun & Shocker, 1996; Hillyer & Tikoo, 1995).

The benefits of co-branding. There are various benefits of engaging in a co-branding arrangement, of which these benefits largely explain the phenomenon of increasingly use of co-branding strategies in the current business environment. Some of these benefits of co-branding will be discussed below. First of all, it is possible for the various firms to share the costs of the branding activities or promotional exercises, in which enable the firms that engage on co-branding activities to lower their marketing costs (Spethmann & Benezra, 1994; Grossman, 1997). Then, co-branding also allows a firm to leverage on the partnering brand to gain easier access to the new markets. This is especially when a brand able to co-brand with another much more reputable, prestigious and well-known brand; as that particular brand will gain greater awareness aside from enhance its brand equity through leveraging on the more prestigious brand, while the better known brand can further strengthen its brand awareness and brand familiarity through the co-branding exercise (Krishnan, 1996; Seno & Lukas, 2007; Thompson & Strutton, 2012). Apart from that, there are also views that co-branding can enhance the brand recognition of the new product being marketed (under the co-branding arrangement). This is because when the two partnering firms engaging in a co-branding arrangement are involved in offering a new product, people will likely perceive the new products offered under the two reputable brands as something more favourable (D’Astous, Colbert & Fournier, 2007). For that, in a way, co-branding can be an effective way to gain more marketplace exposure as well as to fend off the threat of private label brands (Kippenberger, 2000; Farquhar, 1994). Yet, aside from that, co-branding can be useful to enhance other branding related construct, such as brand image and brand awareness of both the brands involved in a co-branding arrangement (Xiao & Lee, 2014). Indeed, the use of co-branding is not limited to the partnering firm from two independent business entities. It is also widely acknowledged that co-branding can be used between the parent brand and the new extension brand, to transfer the positive attributes of the parent brand to the new brand, which would greatly enhance the brand name of the new brand greatly within the marketplace (Washburn, Till & Priluck, 2000). In a way, that means co-branding strategies can be an effective corporate strategies to enhance the brand name of one of the business unit or subsidiary. Last but not least, co-branding can be used to affect consumer perceptions, attitudes and even behaviours. Some of the possible positive outcomes of co-branding efforts towards affecting consumer outcomes include the following: increase brand salience, expand brand extension scope, as well as improve perceived product performance (Kalafatis, Remizova, Riley & Singh, 2012).

Nevertheless, it is crucial to aware that co-branding can carry certain degree of risks, and that a firm might not be able to yield any advantage from a co-branding arrangement. For example, as discussed by D’Astous, Colbert & Fournier (2007), the nature of combining two different brands may possibly create some confusion among the minds of the consumers. Yet, it is also possible that a brand is being affected adversely by another brand (within a co-branding exercise). For that, the brand equity of the brand may be affected negatively when the other brand are being associated negative elements or perceptions by the public or consumers.

Best practices on co-branding. There are also many views on how to actually launch an effective co-branding campaign or how to leverage on co-branding for better marketing performance or effectiveness. Some best practices are suggested indeed. For example, in Lin (2013), the two brands selected in a co-branding arrangement must be compatible or mutually supportive – as that is critical in influencing consumers’ perceptions more positively. Yet, in Washburn, Till & Priluck (2000), it is discussed that the attributes of the brand engaged in co-branding must be related or compatible with the particular product marketed under the ‘co-brand’. Nevertheless, best practices on co-branding are yet a common topic discussed within the field of academic. In the next section, some of the previous studies being conducted by scholars concerning co-branding will be presented and discussed.

Previous Studies on Co-Branding

As mentioned above, the issues pertaining to co-branding deserve further investigation from researcher because the act of combining two or more different brands will affect the evaluation process of the consumers (Lin, 2013; Simonin, & Ruth, 1998; Hillyer & Tikoo, 1995; Thompson & Strutton, 2012). In this section, some of the previous studies available will be presented and discussed. This is crucial as to add value to the research process to be carried out within this dissertation.

Benefits, Usefulness and Risks of Co-Branding

It is discussed earlier in Section 2.2.2 that co-branding can offer various benefits and advantages to a marketer or a firm, but there are some risks pertaining to co-branding arrangement that worth the attention from the practitioners. Indeed, these views are supported, as there are some empirical evidences that support how co-branding will benefit a firm, while in what way a co-branding strategy can be risky. Such few studies will be presented accordingly below.

In the research performed by Motion, Leitch & Brodie (2003), the use of corporate co-branding within the context of a case study of the sponsorship relationship between Adidas and the New Zealand Rugby Union. It is found that not only co-branding can contribute to enhancement of brand equity of the partnering brand, but it also can be used to redefine brand identity. In a way, it is found that co-branding can be very useful in the execution of the branding strategies of corporation, as it offers corporate brands access to the brand strategy of the partnering brand, the alignment of brand values, the marketing communication association and brand reach and network of relationships.

Next, in the research conducted by Cornelis (2010), the effects of co-branding within the theme park industry were explored and investigated. From the study, it is found that the attributes of the respective brand within a co-brand arrangement can affect the eventual co-branding outcomes. Indeed, weak or negative attributes of a brand can affect the eventual outcomes of the co-brand (i.e., the combined brand) negatively. It is found that even the strongest brand may be affected by negative elements or weaknesses on the partnering brand. The research herein thereby provide support to the view that co-branding can sometimes be very risky, and not all co-branding arrangement can resulted in positive or pleasant outcomes.

Yet, in the research conducted by Kalafatis, Remizova, Riley & Singh (2012), the benefits to the respective brands involved in a co-branding arrangement were examined. The various brands examined were categorised into high-, medium- and low-brand equity levels. From the research, it is found that brand of lower brand equity tend to benefit more from the brand that possess higher brand equity. From the study, it is shown that a brand can be further enhanced from the brand equity perspective, when the particular brand able to partner with another more prestigious brand.

Overall, the studies available indicate that co-branding can be beneficial to firm performance and marketing effectiveness, but there are risks to be aware of – as co-branding may also bring adverse impacts to one of the brand involved in the co-branding arrangement. Nevertheless, there are also many studies on how the various factors can affect co-branding outcomes or effectiveness. These studies will be presented in the next section.

Factors Affecting Co-Branding

Theoretically, many factors can affect consumers’ attitudes toward co-branded products. For instance, according to D’Astous, Colbert & Fournier (2007), some of these factors include the following: (i) perceived quality of the original brand, (ii) perceived congruence between the original brand and the extension product, (iii) perceived complexity of the co-brand, (iv) attribute complementarity of the partner brands, and (v) congruence between the partner brands and the co-branded extension. Yet, in a similar way, several factors (from the perspective of “perceived fit”) that can affect co-branding outcomes were discussed by Xiao & Lee (2014). Accordingly, the few variables that are postulated as crucial in affecting co-branding outcomes include: product category fit, brand image fit, as well as brand identity fit.

There are some studies on the issues related to causal effects in the context of co-branding. Typically, scholars interested in examining about the factors that may affect the co-branding effectiveness, or the factors that can affect the eventual outcomes of a co-branding arrangement. For example, in the research carried out by D’Astous, Colbert & Fournier (2007), the impacts of co-branding exercises towards consumers’ attitudinal outcomes were examined and investigated. The study focus within the art industry (which are: museums and symphonic orchestras). It is found that there are certain ‘principles’ or ‘best practices’ that should be adhered to when trying to adopt a co-branding strategy. Specifically, the product selected for co-branding exercise must be congruent with the arts organization’s activities and should be of low complexity. Without fulfilling these two points, the co-branding effects can be unsatisfactorily.

Then, in the study performed by Tsantoulis & Palmer (2008), the impacts of co-brand alliance among airline operators towards affecting service quality were examined. Through the use of longitudinal, quantitative methodology, it is however found that co-brand alliance did not exert significant impacts on the service quality provided to the consumers. The researchers argued that the impacts are indeed indirect and subtle, and that such impacts are not typically picked up through quantitative research.

Aside from that, in Thompson & Strutton (2012), research on co-branding strategies effects upon consumers’ perceptions was examined. It is found that partnering with brands possessing higher perceived degrees of fit (within a co-branding arrangement) in the intended product extension category is crucial for eventual marketing or branding effectiveness. From that, it is argued that fitness between the co-brand and the new extension product is critical factor that must be considered when trying to engage in a co-branding exercise or strategy to reach the consumers.

Yet, in the study by Xiao & Lee (2014), the importance of brand identity (BI) fit as one of the critical factors that can affect co-branding outcomes was examined. The scholars had also use the consumer-brand (C-B) identification as the moderating factor. Based on the study, it is found that consumer-brand (C-B) identification is a moderator of the relationships between brand identity (BI) fit and co-branding outcomes. It is found that consumers’ co-branding evaluations and the loyalty of the focal brand are higher in the low BI fit condition than those in the high BI fit condition, when C-B identification is low. However, such relationship does not exist when C-B identification is high.

Overall, it can be observed that co-branding is indeed a complex branding strategy, which can be affected by various factors. Understanding on how these different factors may affect the outcomes or results of a co-branding arrangement is critical. This is particular true for any marketer that wishes to leverage upon the co-branding strategy for better firm performance or in influencing the attitudes and behaviours of consumers.

Purchase Intention

Defining “Purchase Intention”

Within the context of business management, understanding about consumers’ behaviours and attitudes are critical issues that have been receiving great attention from both scholars and practitioners. This is because under the competitive marketplace, the ability to meet consumers’ needs and wants as well as the ability to influence the attitudes and behaviours of consumers are crucial for attainment of better performance and competitive advantage for a firm (Bounagui & Nel, 2009; Faryabi, Sadeghzadeh & Saed, 2012; Zhu, Lee, O’Neal & Chen, 2011; Ilicic & Webster, 2011). Yet, under the context of consumer behaviours, one of the very critical issues that demand attention from scholars is about the study concerning ‘purchase intention’ of consumers (Sahoo & Bartaria, 2011; Kwek, Tan & Lau, 2010; Raturi & Parekh, 2012). For that, the purchase intentions is included as one of the item or construct to be investigated further.

To explain, the concept of ‘purchase intention’ can be defined as “attempting to buy a product” (Ho & Svein, 2012). This is a simple definition of ‘purchase intention’. However, there are even more complex version of definition of ‘purchase intention’ available. For example, within the journal by Khan, Ghauri & Majeed (2012), ‘purchase intention’ is defined as “individual’s intention to buy a specific brand, or individuals who want to buy a specific brand which they has chosen for themselves after certain evaluation”. As discussed by De Cannière, De Pelsmacker & Geuens (2010), research into purchase intention is critical as that will provide insights to marketers on how to sell more effectively to the consumers. It is through such understanding that a firm can perform better, through the increase of revenue and profitability of a firm. However, as will be seen later, purchase intention is a complex construct that may be affected by a variety of different factors. In other words, the study into purchase intention or the attempt to understand purchase intention can be challenging. To illustrate the point, the various factors that may affect purchase intention of consumers will be presented and discussed in the next section.

Factor affecting purchase intention

From a review of the literature, it can be easily observed that the study concerning purchase intention is abundance. This is especially true when the literature related to how certain factor or factors may affect purchase intention is concerned. In order to provide greater understanding to reader on how the various factors may affect purchase intention, some of the latest studies in the recent years, on how some factors or determinants of purchase intention may affect purchase intention will be provided and presented in Table 1 below.

 

Table 1: Factors Affecting Purchase Intention

Scholars Factors Found to be Significant in

Affecting Purchase Intention

Wang & Liu (2010) ·         Service innovation
Ashton, Scott, Solnet & Breakey (2010) ·         Perceived value

·         Perceived brand image

·         Perceived quality

·         Perceived sacrifice

Long-Yi & Ching-Yuh (2010) ·         Corporate image

·         Relationship marketing

·         Trust

Li, Ahn, Zhou & Wu (2009) ·         Country image
Nel, Raubenheimer & Bounagui (2009) ·         Gender differences
Chiu (2009) ·         Perceived incentive

·         Perceived service quality

·         Perceived ease of purchasing

·         Perceived usefulness

Wu & Chen-Lien (2009) ·         Core-brand attitude

·         Consumer perception fit

Bounagui & Nel (2009) ·         Perceived usefulness

·         Perceived enjoyment

·         Perceived trust

Ling, Chai & Piew (2010)

 

·         Shopping orientations

·         Online trust

·         Prior online purchase experience

Kwek, Tan & Lau (2010) ·         Impulse purchase intention

·         Quality orientation

·         Brand orientation

·         Convenience orientation

Gottlieb, Brown & Drennan (2011) ·         Perceived service quality
Ilicic & Webster (2011) ·         Consumer-celebrity attachment

·         Endorsement by celebrity

Zhu, Lee, O’Neal & Chen (2011) ·         Perceived ease of use

·         Perceived usefulness

·         Trust

·         Perceived risk

Faryabi, Sadeghzadeh & Saed (2012) ·         Price discounts

·         Perceived store image

Rahman, Haque & Khan (2012) ·         Service quality
Paul & Rana (2012) ·         Satisfaction of Consumers

·         Health Concerns

·         Availability of Relevant Information

·         Education

Mo & Wong (2012) ·         Age of the consumers

·         Race of the consumers

Rezvani, Dehkordi, Rahman, Fouladivanda, Habibi & Eghtebasi (2012) ·         Country of origin
Kiliç (2012) ·         Perceived innovation

·         Service innovation

·         Consumer attitudes

Mei, Ling & Piew (2012) ·         Government initiative
Bester & Jere (2012) ·         The way in which the message is framed
Hsu, Chang & Chen (2012) ·         Website quality
Eze, Yee & Wamala (2012) ·         Country of origin

·         Advertising

·         Brand image

·         Product knowledge

·         Product quality

·         Price of products

Thamizhvanan & Xavier (2013) ·         Impulse purchase orientation

·         Prior online purchase experience

·         Online trust

Son, Jin & George (2013) ·         Attitude toward brand

·         Perceived behavioural control (PBC)

Chen & Teng (2013) ·         Online store image

 

From the review presented above, it is obvious that purchase intention among consumers can be affected by a variety of different factors. In the context of this study, such awareness is crucial as to better inform the researcher on how purchase intention as a complicated construct, and how that complexities may affect relationships between co-branding efforts to the purchase intention of consumers. Interestingly, it is also found that there is one previous study on how co-branding may affect purchase intention of consumers (i.e., there is a serious lack of study on co-branding impacts towards purchase intention). This study was conducted by Lin (2013).

To explain, the study by Lin (2013) investigated the effects of brand familiarity and brand fit on purchase intention towards the offerings of co-branded hotels. The data were obtained from a total of 198 consumers of hotels in Taiwan. Based on the study, it is discovered that the fit between co-brands mediate the relationship between brand familiarity and purchase intention (i.e., more specifically, it can be explained as a reputable co-branded hotel with a high level of brand fit could directly or indirectly affect consumer decision-making processes regarding purchase intention towards the co-brand).

Based on the study presented by Lin (2013), it can be somewhat deduced that co-branding is indeed something essential that may affect purchase intention. However, that notion is not conclusive as there is actually still lacking of studies on such area. In other words, more studies are actually required. This research conducted within this dissertation will be able to add more insights to the discussions. Nevertheless, the research method employed within this study will further be articulated in the next chapter.

Summary

Overall, it can be understood that co-branding is one of the increasingly employed branding strategies, albeit research on this area remain scarce. Then, the use of co-branding strategies can actually benefit a firm, but there are some risks due to the use of co-branding strategy. In such view, it is necessary to better understand about the co-branding strategy, so that to enable a manager to truly leverage on that strategy for better firm performance. Then, there are many factors that can affect the effectiveness of co-branding strategy. One of the critical issues is about the brand selected into a co-brand arrangement. Specifically, when the brands participated in the co-branding arrangement is compatible or reputable; it will add value to the overall co-branding strategy. However, when one of the brands is weak or carry certain negative elements, the partnering brand may be hurt. Then, from another perspective, the studies of purchase intention are common and many – given that purchase intention is indeed an important construct within the context of business management and consumer behaviours. However, through the review of the literature available, it is found that the studies concerning impacts of co-branding to purchase intention are very limited, and indeed insufficient. Only a single study was identified, and there are some evidences that co-branding can indirectly affect purchase intentions. The materials provided here in will provide some useful references and insights to the other researchers on studying about issues pertaining to co-branding and purchase intention.

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