An empirical study of the co-branding partner selection strategy

A perception from the negative perspective combing with consumer psychology

PAPER WITHIN Bachelor thesis in Business Administration

AUTHOR: Tongda Lu, Jiawen Ji, Jingming Zhang
TUTOR: Lucia Pizzichini
JÖNKÖPING May 2020

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Bachelor Thesis Project in Business Administration
Title: An empirical study of the co-branding partner selection strategy

A perception from the negative perspective combing with consumer psychology

Authors: Tongda Lu, Jiawen Ji, Jingming Zhang

Tutor: Lucia Pizzichini

Date: May 2020

Key terms: Co-branding, cross-branding, brand identity, consumer psychology

Abstract

In recent years, the fashion industry has set off a trend of co-branding, and co-branding
has become a unique marketing strategy for major brands to obtain benefits. However,
there are potential risks when brands are selecting joint partners. The literature in this
paper addresses both the positive effects of co-branding and how it is viewed from a
business and customer perspective related to customer loyalty. Besides, previous
researches on how to correctly select joint partners have not been explored in the
collected literature. Therefore, the purpose of this study is to provide a deeper
understanding of the strategy of choosing partners for brands from a negative aspect
under the current trend of brand cooperation，and to propose relevant implications
through case analysis. The research method used in this paper is qualitative research by
conducting case studies and four focus groups. The findings indicate that
communication and connection are the basis for two brands to having success.
Furthermore, the enterprise needs to evaluate and estimate the capabilities of the
partners by analyzing the external environment and opportunities. Besides, with the
help of co-brand partners, brands can make up for their shortcomings and work together
to achieve the expected goal.

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Words of acknowledgement

First and foremost, we would like to express our deepest gratitude to the teachers and
tutorsat Jönköping University International Business School. You have guided us for
the past three years of studies and laid the foundation for the writing of our thesis. We
would like to especially thank Lucia Pizzichini as our tutor, who has taken her time to
guide us and share suggestions with us.

We would also like to extend our gratitude to the friends and classmates, especially to
those who have supported us and guided us through the whole process of our thesis
from group 35, group 39 and group 41.

Finally, we would like to thank the participants who joined our focus groups and took
their time to take part in our interviews. We really appreciated the contribution from
them which enable us to explore our topic in a deeper and more comprehensive way. It
has been an enriching experience which we believe will help us in our future careers.

Without all these people, this thesis process would not have been made to be possible.
We are thankful for the positive experience forever and are proud of the final result.

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Table of Content

1. Introduction ......................................................................................... 6
1.1 Background .......................................................................................................................... 6
1.1.1 The Trend of Co-branding ................................................................................................... 6
1.1.2 The Type of Co-branding..................................................................................................... 7
1.2 Problem Statement ................................................................................................................. 9
1.3 Purpose ............................................................................................................................... 10
1.4 Definition .............................................................................................................................11

2. Theoretical Background .................................................................... 12

2.1 Co-branding ....................................................................................................................... 12
2.2 Co-branding from a Consumer Perspective Related to Consumer Loyalty ..................... 13
2.3 Co-Branding from a Business Perspective ........................................................................ 14
2.4 Positive Association ............................................................................................................ 17
2.4.1 The Resources dependence Theory .................................................................................... 19
2.4.2 Institutional Theory ........................................................................................................... 19

3. Methodology& Method ...................................................................... 21

3.1 Research Philosophy .......................................................................................................... 21
3.2 The Research Approach ..................................................................................................... 21
3.3 Research Strategy .............................................................................................................. 22
3.4 Method for The Research of the Theoretical Background .............................................. 23
3.5 Data Collection ................................................................................................................... 23
3.5.1 Primary data...................................................................................................................... 23
3.5.2 Secondary Data ............................................................................................................... 24
3.5.3 Case Study ........................................................................................................................ 24
3.6 Procedure ........................................................................................................................... 30
3.7 Data Quality ....................................................................................................................... 32
3.7.1 Reliability ......................................................................................................................... 32
3.7.2 Validity ............................................................................................................................. 32
3.7.3 Generalizability................................................................................................................. 33
3.8 Ethical Consideration ........................................................................................................ 33
3.9 Data Analysis ...................................................................................................................... 33

4. Findings ............................................................................................... 33
4,1 Support ............................................................................................................................... 35
4.2 Opposition .......................................................................................................................... 35
4.3 Neutrality ........................................................................................................................... 36

5. Analysis................................................................................................ 38
5.1 Revelation from Different Groups Comparison ................................................................ 40
5.2 The Advantage and Disadvantage of Co-branding ........................................................... 40

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5.3 The Standard of Co-branding Partner Selection Strategy................................................ 45

6. Conclusion ........................................................................................... 46

7. Discussion .......................................................................................... 49
7.1 Implication ......................................................................................................................... 50
7.1.1 Take Advantage of Both Sides-Strong Brand Equity Strategies .......................................... 50
7.1.2 Value and Needs of Consumers ......................................................................................... 50
7.1.3 Attribute Complementary Strategy .................................................................................... 51
7.2 Limitation of The Research ............................................................................................... 52
7.3 Future Research ................................................................................................................. 52

8. Reference ............................................................................................. 54

9. Appendixes .......................................................................................... 69

Appendix 1 .............................................................................................. 69

Appendix 2 .............................................................................................. 72

Appendix 3 .............................................................................................. 73

Appendix 4 .............................................................................................. 74

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1. Introduction

This thesis is an empirical study to explore the co-branding strategy when selecting
partners. To do so, this chapter discusses about the background of the co-branding
trend, briefly introduces the main topic by familiarizing the reader with the current
situation and studies about co-branding strategies. Further, this chapter states the
problem and finally proposes the purpose of our research.

1.1 Background

1.1.1 The trend of co-branding

In recent years, there are several cooperation cases appears between different
companies. Various co-branded series and co-branded methods have emerged endlessly
and the corporation between different brands have also expand to other industries in
despite of fashion industry. Besides, the co-branding has also been favored by other
industries as a new marketing strategy. Chang (2009) states that co-branding is a
marketing arrangement since it utilize brand names from mulitiple brands in terms of
labling on a single product or service. Around 2017, co-branded marketing methods
have become more common and many brands have successively adopted them. The co-
branding strategy can help the company to increase consumers’ perceived quality and
image toward their brands (Keller, 2003). It is beneficial to the organizations involved
to alleviate costs when entering new markets by using the established equity of the
second brand (Aaker, 2004; Kapferer, 2004; Keller, 2003). In the common
understanding, each brand has its own brand value and many brands used to corporate
with other brands or designers to increase brand awareness, so that both of them can
achieve the win-win situation, which is as same as the concept of one plus one greater
than two. There is no doubt that there are many are many highly successful co-branding
cases, but there are some cases that have little effect and a few that nobody pay attention

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with. Co-branding is not a formulaic business practice. When co-branding is rampant,
the meaning and the effect of co-branding will decrease in consumers’ mindsets.

"Topic level" is one of the common characteristics of co-branding strategies. If the

brand was mentioned seldomly by people, it is hard for brands to grow. Therefore, the
brand needs constant exposure in the sight of consumers(Acevedo, 2018). Co-branding
is a noteworthy event because it will bring positive publicity to both brands. Also when
brand application and co-branding strategy, if the product logo and attribute co-
branding are launched, the product may have the added value of two brands, such as
cooperative products of H&M and Versace. Fast fashion awareness and luxury and high
quality make consumers have more positive impression about these two brands. This
can make the brand achieve the effect of one plus one greater than two. Based on the
concept that one plus one is greater than two, companies often form strategic
partnerships. People can also derive interaction from these positive partnerships
(Personal Branding Blog, 2015).

1.1.2 The types of co-branding

To apply with the co-branding strategy, there are different ways that have been used by
different brands. First type is different brands both invested to establish a totally new
brand which can be recognized as a joint venture brand. The key is that a brand may be
worth more as part of a wider portfolio than standing alone (Patrick, 1992). For example,
the brand of Y-3 is one of the most typical co-founding case. It is a new brand co-
branded by the world's famous Japanese designer Yoshimoto Yamamoto and Adidas.
Yoshimoto was acted as the creative director. It officially entered Chinese market in
spring and summer of 2006. The brand's Y stands for Yoshimoto Yamamoto, while 3
stands for the Adidas' three-line logo. The the design styles of the new brand Y-3
combines the quintessence of Yoshimoto Yamamoto and Adidas these two brands. By
combining the two brands' unique design style and different understanding of sports
style, the two brands finally launched a co-branded series with a sense of quality and
design, which also attracted many consumers to buy this series. Therefore, co-branding
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is a long-term cooperation between brands, and during this period of cooperation, trust
and mutual support from both sides are needed to make the cooperation between the
two brands firm.

The second type is the co-branding actions taken by brands in different fields which
can be recognized as cross-border cooperation. The well-known beverage brand Coca-
Cola and a Chinese local clothing brand co-branded. The unexpected cooperation
between the two made their products quickly attract people's attention. After the
collision and fusion of brand culture, an interesting design was produced. In the series
of cooperation products, the design team boldly adopted Coca-Cola's classic logo, retro
fonts and colors, fabric stitching and other design methods. The designs directly
restored Coca-Cola's joyful and relaxed brand style, and at the same time highly
matched the local Chinese brand's young and fashionable brand concept.

The third type is the famous brand to co-brand with famous individuals such as Nike
with Travis Scott, Adidas with Kanye West etc. This is related to the concept of fan
economy. The term of fan ecnomy refers to the value and revenue generated via
interactions between individual fans is in its broadest sense (Liang, 2017). The fan
economy takes emotional capital of human beings as the core and uses the fan
community as a marketing tool to add the emotional capital. The fan economy is
dominated by consumers, based on consumer emotions, achieve the purpose of adding
emotional capital to brands and idols. Brand identity has the potential to formulate
cultic myths around the brand which is sustained by its loyal customers and followers
(Belk& Tumbat, 2005). Young people usually like to chase stars. Some avid fans will
imitate the dress of idols, and in order to give a kind of support to idols, the fans will
buy their endorsement products. It is obvious that stars and famous individuals with a
large number of fans will undoubtedly have great potential to drive consumption, so
some of the famous brands often invites celebrities to co-brand with them to maximize
the profit and influences. The one representative example is Nike. The price of co-

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branded Nike shoes is often several times or even ten times higher than that of ordinary
shoes, and they will be sold out immediately.

1.2 Problem Statement

As an alternative brand proposition, co-branding is rapidly developing in almost all
industries around the world and in the field of international marketing. (UKessay, 2018)
Current studies about co-branding and its partner selection strategies always conceive
it as a good way to bring more benefits to the firms. It is widely believed that the co-
branding will always bring positive effects to both brand and can maximize the profits.
Guided by this common view, some current studies focus on analyzing the motivation
of brands to choose the co-branding strategy. As mentioned above, the brands using the
co-branding strategy are all tend to increase brand awareness and influences, also to
increase the value of the brand (Keller, 2003). Co-branding can not only enrich the
brand image, but also provide consumers with more choices. Every independent brand
has its own brand culture and style, which may be fixed and not easily changed. The
co-branding of two brands can show different product styles and bring more surprises
to consumers.

Moreover, channel resources and marketing models controlled by various brands are
different. When the two brands are united, resource sharing can be achieved, and the
advantages of complementary advantages can be achieved to enhance each other's
competitiveness. Sharing customer resources and expanding target market are two
important prerequisites for brand co-branding to succeed. Different brands mean that
brand positioning and target customers are different. After the cooperation between the
two brands, the relationship is gradually established, so each party can invlove a new
consumer group, which means the organization of consumer groups is growing.
Secondly, compared with the traditional marketing model, when two brands launch a
new co-branded series of products, each brand can reduce production costs and labor.
In addition, co-brands are more likely to attract consumers' attention and curiosity in

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the promotion process, which is also one of the biggest advantages of co-branding
(Acevedo, 2018).

In general, we discovered that current studies are always focus on discovering the co-
branding and its partner selection process from a positive side. Also, the researchers
found out that the focus of research is often concentrated in the apparel and fashion
industries, and co-branding names and cases in other industries are rarely mentioned.
At the same time, there is not much analysis of failure cases in the existing research
and there is no analysis based on consumer psychological perspective. It is a good
opportunity to discover the co-branding strategy and the partner selection process from
a negative point of view and the consumer psychological perspective.

The topic about the co-branding strategy and its partner selection processes are well
deserved to be discussed. It will be interesting in discovering the brand management in
relation to co-branding. It is important to discover the negative side of co-branding and
study failure examples; it can help us to learn about the topic in a more comprehensive
way. It enables us to draw lessons and experiences from failed cases and may be
recognized as suggestion to future potential cooperation between brands in common
practices.

1.3 Purpose
Our main purpose is to clarify what is the value of co-branding in relation to the brand
management. It will be interesting to discover more about the co-branding partner
selection strategy from a negative perspective and combining with the analysis from
the consumer psychological perspective which enable us to learn this strategy from a
more comprehensive angle. Also, it can be suggestions for how the organizations and
brands can avoid failures and obtain a benefit through this method and strategy in future
potential cooperation.

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1.4 Definition

Co-branding: Co-branding is one of the marketing strategies, it is also known as a

partnership between different brands. It means two or more companies joining forces
to collaborate with different types of brands. (Kenton, 2018).

Cross-branding: The cross-branding strategy refers to a strategy of combining two

products from different brands to sell complementary services or goods to increase the
audience. When the two brands come together, they can not only help them to attract
more audiences, but also help them enter new industries or cater to new target customer
groups (Mbaskool, 2020).

Brand identity: Brand identity is the visible elements of a brand, such as color, design,
and logo, that identify and distinguish the brand in consumers' minds. Brand identity is
distinct from brand image (Tarver, 2020).

Consumer psychology: Consumer psychology is the study of why people buy things.
Psychologists try to find the underlying cognitive processes that explain consumers'
choices and how they respond to the influence of marketing, as well as the external
stimuli that convince people to purchase certain items (Study.com, 2016).

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2. The Theoretical Background

This chapter reviews the existing literature. We selected the literatures related to the
subject by searching the keywords on some academic website, in the university library
and on the Google Scholar. We selected the literatures of different researches which
the time span is nearly 30 (from 1990s to now) years. It can enable us to learn about
the topic from the origin of its existing time. Firstly, the understanding of co-branding
is presented, then the discussion is presented about the advantages of co-branding
strategies, and finally an explanation of positive association where related theories are
displayed.

2.1 Co-branding

In recent years, many scholars have made different interpretations of brand alliances,
but have not yet concluded. Among them, Interbrand, the world's most authoritative
brand consulting and evaluation agency, believes that brand alliances are the business
cooperation model between two or more brands which are highly recognized by
consumers (Casey & Julie, 2018). The product retains some of the individual brand
names involved. Some researchers divide the field of brand syndication from a business
perspective and divide the brand syndication into six types: product syndication, logo
syndication, advertising syndication, promotion syndication, public relations
syndication and channel syndication (Zheng, 2010). As mentioned in the research, the
narrow brand joint refers to a new joint brand formed by two or more corporate brands
through mutual cooperation, and their respective brand names are retained in the joint
brand (Casey, 2018). The broad brand joint means that two or more corporate brands
cooperate in a certain way, and through the combination of brands, to form a
competitiveness that a single brand does not have which rely on mutual advantages
(Venkatesh, 2018). Brand syndication is a form of collaboration that includes many
different forms and not just a new brand model.

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Co-branding is defined as a win-win strategy for two or more brands which is to achieve
the commercial purpose negotiated by both parties (Wugon, Sujin & Haeyoung, 2006
& Anders, Per, 2005). Rao and Ruekert (1994) pointed out co-branding is more than
just a partnership; it involves later aspects of brand names, product design and
intellectual property. The authors also stated that in the case of a joint brand, the brand
culture of both sides is integrated. At the same time, the process of co-branding will
involve more strategies such as advertising and positioning. Furthermore, according to
Blackett and Boad, they also argued that co-branding is a creative way for two parties
to reach profitable objectives. In Co-Branding: The Science of Alliance, it analyzed
that co-branding is an opportunity for enterprises, the benefits or disadvantages of the
cross-brand that bring to the company includes increasing revenue and enhance brand
value (Blackett & Boad, 1999).

2.2 Co-branding from a consumer perspective related to brand loyalty

Many earlier researches have studied the impact of co-branding on customer needs and
it was largely examined by both quantitative and qualitative approaches. To be
illustrated, Bin and Tsan indicate that the brand loyalty of the customer will be
influenced by the cooperating brand. The authors used fast fashion and luxury brand as
an example and provide a mathematical model to examine the degree to which co-
branding will affect two different brands (Bin and Tsan, 2017). There are seven
propositions and proofs provided to prove co-branding is one of the most influential
factors on customer attitudes in several marketing strategies. The result effectively
shows customer loyalty, buying decision as well as revenues will be positively
influenced by the situation of the brand alliance. Also, it was presented in the research
that certain types of co-branding, such as price concessions and post-purchase services,
may be an effective marketing strategy that can enable certain products and brands to
establish customer satisfaction and brand loyalty. (Wugon, Sujin & Haeyoung, 2006)
Besides, Yuhui, Lisa and Kewei argues that cross-board brand alliance can positively
influence consumers pre and post attitude which is closely related to brand loyalty
(Yuhui, Lisa & Kewei, 2012). However, the difference between Bin and Tsan is this
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study is based on the effect of country of origin and elaborate with a conceptual and
structural model. The authors collected data from conducting 100 questionnaires
respondents, and the result shows the majority of consumers are willing to buy co-
branding products. In addition to demonstrating that co-branding affects consumer
behavior, they also discussed how companies can gain a competitive advantage in the
domestic market when organizational leaders decide to partner with foreign brands.
Besides, to a certain extent can increase the brand's international visibility and gain
consumer loyalty (Yuhui, Lisa & Kewei, 2012). Through these two articles, the theory
that co-branding affects consumer attitudes and customer loyalty can be proved. Also,
the reasons for the organization to choose joint branding are obvious. The contents of
these two articles mainly mentioned two aspects: from the perspective of consumers,
the strategy of using brand loyalty to make joint branding to attract more customers;
the other is to use joint branding to increase the competitive advantage of the brand
itself. In 2009, the authors adopted the concept of brand personality and its
measurement scale (Aaker, 1997). They hypothesized and verified the positive
correlation between functional and symbolic fit and consumers' evaluation of co-
branding combing with the consumer loyalty to the brands.

2.3 Co-branding from a business perspective

Retailers are increasingly adopting the strategy of using two or more brands for
consumption at the same time (Robert, 2008). In 1999, Bob and Tom published a book
called co-branding. The second chapter of the book describes in detail the interests of
the co-branding and opportunities. The owner of the brand "ingredients" has identified
several different ways, co-branding can be converted into an advantage. For the old
brand, co-branding can create a new source of income or promote the sales
opportunities of existing products, for the new brand, it often leads to suspicious market
credibility (Bob, 1999). Co-branding reduces the need for expensive investments in
target markets and overcomes barriers to entry. Bob mentioned in the section of

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communication opportunities that "co-branding can provide brand owners with
opportunities to communicate with co-brand customers". WEIGHT WATCHERS used
the opportunity to detail how to contact them and participate in their weight loss
program on the label of their co-branding line with HEINZ to promote packaging and
literature related to co-branding services. For industrial enterprises, co-branding
provides a new source of revenue (Bob, 1999). When two brands combined,
manufacturers can get extra payment through consultation, the additional payment is
co-branding new revenue sources. Manufacturers can cooperate with partners to share
in this way the brand of additional benefits, achieve a win-win situation. The
cooperation brand effect, the factors affecting the cooperation between brand fit or
logical link is considered to be decided the cooperation of the basic factors of the
success of the brand. If the fit is not high, the joint brand has a chance of failure, the
"extra payment" will also disappear. Sunil and Thomas claimed that under the threat of
competitors who cannot observe the cost to entering suppliers, they will establish a joint
brand relationship, thereby reducing the possibility of entering. The co-branding
arrangement benefits both existing suppliers and downstream manufacturers (Sunil &
Thomas, 2007). The author took ford motor company in the United States as an example
to show that joining a co-brand can significantly improve the sales potential of products
and services.

For new markets, Co-branding can help brand owners enter new markets. The Ford
Motor Company introduced a special version of its Explorer sports utility model
(Explorer sports utility model) and outfitter Eddie Bauer. As a result, the co-branded
Explorer sports utility model and outfitter Eddie Bauer far outsold their previous stand-
alone models. In other words, people who like The Ford Motor may buy outfitter Eddie
Bauer products because of The Ford Motor alliance with outfitter Eddie Bauer. Existing
suppliers benefit from the reduced likelihood of competitors entering the market, while
downstream manufacturers receive lower prices. In addition, due to the mitigation of
double marginalization in vertically integrated solutions, we found that the cost of co-
branded products is lower (Sunil & Thomas, 2007). Launch services such as Banks to

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repay credit card debt, the cardholder can find many different aspects of the brand joint,
they can be found that can be turned into advantages. Co-branding reduced in the target
market for the need of expensive investment, and overcome the entry barriers, it also
provides a way to overcome non-financial barriers to entry into new markets (Bob,
1999). The best way is through legislation to limit the number of licensed businesses.
When manufacturers launch new product activities, such activities are always
dangerous, but co-branding can reduce the risk of entering new markets. It was also
discovered that from the business perspective, role pressure is a catalyst for the various
effectiveness standards outlined in the competitive value framework and developed in
the organizational culture. Co-branding will change the role, which is likely to affect
the culture (Dahlstrom, 2016). The enterprises can cooperate with established
enterprises to avoid competition and reduce the possibility of failure. Two enterprises
conduct co-branding, there are no competition relations between them, so for them,
they are less each other for a competitor. For enterprises, reduce the results of the
competition is to reduce the risk of the enterprise. Companies can take risks together,
once the joint brand failed, with great loss of enterprise will reduce the loss to a
minimum. The promotion of such activities can also increase the value of an already
licensed brand (Bob, 1999). If two enterprises carry out joint promotion, the effect is
greater than the individual promotion. In the case mentioned by Bob that CONIG's
"healthy choices" brand was licensed to "KNORK style", the promotion of new
breakfast cereals can increase the value of co-branding. In general, from the business
perspective, the studies generated that brands with the same asset level share the
benefits of co-branding equally, while brands with lower assets receive higher returns
from alliances than partners with higher assets. It is also shown that very dominant
partners can derive a greater percentage of functional benefits (such as technical
expertise) from the co-branding strategy (Stavros & Natalia, 2012).

2.4 Positive Association

Co-branding is a technology that is becoming more and more popular when marketers
try to transfer the positive association of partner (composition) brands to newly
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established co-branding (composite brands) (Judith, 2000). It was informed that when
celebrity co-brand partners do not provide information about partner brands or brand
interests, consumers’ ability to provide benefits to partner brands, purchase intentions
and counterpoint judgments are less positive (Jasmina, 2013). Additionally, Jasmina
(2013) also found out that there is one kind of positive association is related to the
cooperation with the celebrities. Both of he relevant characteritics of celebrity and
irrelevant information will affect the perception of consistency. It is the responsibility
of the brand manager to ensure that celebrity brand partners refrain from providing
information unrelated to the brand in their advertisements in order to enhance the brand
interest belief, purchase intention and match dilution. To maximize the profit of one
brand, different companies are always seeking various ways to reach the target. The
brand name usually tells the consumer about the manufacturer of the product and who
should be punished if the product performs poorly (Rao & Ruekert, 1994). To any kind
of brands, the quality of the product may come to be the first consideration. Some of
the brands selected to use the concept of brand syndication. As mentioned above, brand
syndication is a combination of two or more brands to form a new brand, focusing on
some aspects of cooperation. Some researchers pointed out that the second brand name
should give the same signal as the single brand name because the first name of the
product already gives a certain quality signal (Rao & Ruekert, 1994). McCarthy and
Norris (1999) claimed that co-branding will also provide customers with quality signals
about new products in the market so that the quality perception of one partner brand
affects the quality perception of another brand. Firms have to compare the relative costs
and benefits to the parties in an alliance by using a simple but powerful way. As
generated by the scholars, different brands should find proper alliance depending on
the nature of the product. In the process of cooperation between the two brands, having
a reputable ally can help the brand itself to improve the quality and stability of products.
At the same time, a strong ally can enhance and enhance the attributes of the product
(Rao & Ruekert, 1994). It is very clear that to co-brand with right and carefully selected
retailers can be very beneficial to the brands. As Besharat found in his study, when the
two companies carry out joint brand strategy, the existence of a brand with high asset
17
value has a subtle influence on consumers' evaluation (Besharat, 2010). The result has
shown that different forms of co-branding strategies with at least one high asset value
brand do not necessarily change consumer attitudes (Besharat, 2010). It means that as
far as consumer attitudes and quality concepts are concerned, high-asset brands cannot
benefit from co-branding strategies for new products. Instead, consumers' attitudes and
quality perceptions of high-asset brands that are allied with low-asset partners will not
differ from those of the same brand paired with another high-asset owner. It has been
suggested that the co-branding strategy can enable companies to enhance the overall
quality, corporate reputation and visibility of participating brands. Though the strategy
is widely regarded as an effective method of positioning new co-brand products and a
potential source of market competitive advantage, we cannot say that the strategy is
suitable for all conditions. Therefore, as the researcher claimed, it is very important for
brands to choose the proper and carefully selected partners. Cooke and Ryan (2002)
found that based on two different strategic goals, brand alliances tend to fall between
two main forms: reputation recognition and cooperation on core competencies. It is
recommended that these extreme forms of brand alliances form a continuous process
rather than a discrete choice. It is obvious that co-branding strategy can serve many
consumers in the market, from recognizing reputations, improving existing quality and
image recognition to collaborating on product competitiveness. Therefore, based on the
knowledge of the selected literature, Co-branding is an increasingly popular marketing
technique because it exists to transfer positive associations of one company's product
or brand to another (Chang, 2008). One brand should carefully select partner when
using the co-branding strategy to build good quality products and well reputation. A
clear co-branding strategy is crucial for both sides of the brand. To be illustrated,
positioning a new co-brand and try to find the right co-branding strategy to achieve
common goals and create a win-win situation.

2.4.1 The Resource dependence theory

The Resource dependence theory points out that the degree of an organization's
dependence on its resources will affect its behavior (Anheier & Toepler, 2020). The
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resource dependence theory is based on the principle that the resources related to the
organization interact with each other. For example, a business company that wants to
obtain beneficial resources so that ther is a need to make transactions with other partners
and organizations in its environment (Matthew, 2007). This theory focuses on how an
organization's external resources affect its behavior. The globalization of markets has
been recognized as one of the most important changes in the business environment in
the previous years (Earley and Gibson, 2002). The main point of this theory is that
organizations are not independent, and organizations depend on the resources of other
organizations to survive and succeed. If organization A depends on the resources of
organization B, the power of organization B will increase. In order to survive and
succeed in the long run, according to the theory, an organization should try to reduce
its dependence on others and increase others' dependence on itself. The organization
will take action based on its environment to reduce dependence on certain resources
and maintain independence from other resources (Arifin, 2012). Co-branding are not
only restricted in the brands’ logos, but also available in the supply chain co-operation.
Acquisition of one company by another can also be adopt to the co-branding strategy.
The resource dependence theory can be discussed further more about how can
organizations find balance when they apply the co-branding strategy and share
resources.

2.4.2 Institutional theory

Institutional theory is a research tradition and has been discussed in previous articles.
In these articles, previous researchers have discussed how organizational creation and
change is driven by functional considerations rather than theoretical considerations. It
is more driven by symbolic behavior and external influences (Greve & Argote,2015).
The main idea is that all organisations survive under "institutional pressure". Some
decisions and organizational designs are not necessarily rational, but are forced by
external "isomorphic pressures." Therefore, a legitimate organization is responsible to
abide by institutional theory. A growing subfield of institutional theory involves
institutional logic, which is widely (but not universally) shared assumptions and
19
patterns of action (Thornton, 1995).According to the theory, this assimilation
performance helps organizations to promote legitimacy and survive in the larger
environment. According to institutional theory, an organization should design its
organization and make decisions consistent with other overall norms in the overall
domain. Specifically, when many similar organizations do something, a company is
likely to do so under the pressure of assimilation, even if it is not a rational decision.
Applying with the co-branding strategy, when a company's behavior in co-branding is
consistent with the main norms in the field, this agreement may increase the legitimacy
of the company in the field, enhance the company's reputation and status, and thus make
the company more relaxed to survive in the environment. But to some of the firms, if
the whole industry is using the strategy, brands that has not involved in it may try to
utilize it even if it is not a good choice. Institutional theory provides a valuable
perspective on how organizations resist regulatory changes in different cultural and
institutional contexts (Bovey & Hede, 2001). It can be a suitable theory when analysis
the brands’ co-branding behaviors.

20
3. Methodology & Method

The research philosophy, the research approach and research methods are presented
in this chapter.

3.1 Research Philosophy

For researching the established topic, we tend to reach an in-depth understanding from
the collected data and interpret the reason behind the co-branding behaviors. Therefore,
this research follows the philosophy of interpretivism because it the topic of this
research is more about thinking and analysis, so that interpretivism is more suitable in
this situation (Crossan, 2013). Besides, it enabling us to learn deeper and reflect more
on the topic in a more comprehensive way. This study will follow the philosophy of
interpretivism, because it explains social phenomena in a certain context (Crossan,
2013). Interpretivism enables us to have a more comprehensive and in-depth
understanding and reflection on this topic and obtain an objective research conclusion.
At the same time, it allows the researchers to maintain our values when we do research
and research subjects. Collis and Hussey(2014) point out that interpretivism assumes
multiple societies rather than being limited to a single reality, because it is shaped by
different people's perceptions. In our research, our goal is to gain a deeper
understanding of the co-branding strategy and partner selection process and to identify
the key factors that determine success or failure. Saunders,Lewis,Thornhill (2012)
discuss this in phenomena that the qualitative method is also applied in our study, since
a quantitative approach with statistical data would not accurately describe the
experiences of analyzed individuals. According to one study (Collis and Hussey, 2014)
it seems clear that the limited sample size is believed to help bring out more relevant
comparative factors during the analysis. We believe the interpretivism and the
qualitative method will help us to reach an in-depth understanding when we interpret
our empirical data.

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3.2 The research approach

In this paper, we choose to use the approach of inductive research due to our research
philosophy is interpretivism. Gabriel (2013) states that interpretivism tends to be
inductive, because it is mainly through the study of different fields, and finally draw a
conclusion. According to one study, it can also be argued how the authors are hoping
to gather an understanding of the observed phenomenon to get a better understanding
of the identified problem, which according to follow the inductive research approach
(Saunders, Lewis, & Thornhill, 2012). However, in line with an inductive approach, an
abductive one is similarly presumptive and based upon presumptive results (Mantere
& Ketokivi, 2013). It could then be argued there are certain attempts to convert
unanticipated findings into a logical consequence. However, while the study is strictly
based upon interpretations, we are not primarily attempt to explain what has been
identified, but instead combine observations with an explanation of deriving a rule
through generalizations about the co-branding and partner selecting behaviors.

3.3 Research strategy

Qualitative method will be used to operate our research. Firstly, there will be two
different cases selected for our research. A case study is an intensive study that
examines an event from multiple perspectives and focuses on a particular unit (Jacobsen,
2002). Robson states (2002) how a multiple case study proves more generalizability
which is commonly an issue with qualitative research. The purpose is to gather the
amount of in-depth qualitative data as much as we can while at the same time to some
extent upholding a level of generalizability. The multiple case study also helps us to
study the co-branding strategy and partner selection process through multiple sources
of evidence. Also, the method of focus group is applied. The content of focus group
questions is designed in a general to specific order. More specifically, it is derived from
the research question of this study, and deliver each question to each focus group.
According to one study (Morris and Wood, 1991), it seems clear that combining the
multiple case study and the focus group, the researchers can get a more comprehensive

22
understanding of the background and process for the research without sacrificing too
much generalizability (Morris and Wood, 1991).

3.4 Method for the research of the theoretical background

The frame of reference was established from the review of the literature primarily found
in the database of ProQuest and Science Direct by using the access given by the
university. Google Scholar was also used to search for the related journals. The initial
search included phrases such as “co-branding strategy,” “partner selection,” and
“consumer psychology.” The further search involved adding words such as “benefits”
or “negative perspective” to narrow down the scope of the upcoming results. Other
various ways used during most of the academic exploration were to find the
publications of the results published across the past 3 decades which can help us to
learn about the co-branding trend from the very beginning and in a more comprehensive
way. The number of literatures with relevant titles for the study was then selected. After
reading the abstract part of each literature and evaluated the key ideas and key findings
of the literature. Finally, about 20 highly relatable literature was then chosen which was
presented in appendix 1. In this study, the relevant and concerned content from the
remaining literature has been retained and used.

3.5 Data collection

Both primary data and secondary data are gathered and used in the data collection
process of our research. Primary data is obtained from our empirical findings which are
mainly derived from the focus groups which participated in the online meetings that
were convoked by us. The secondary data is used for generating background
information of our interviewed groups and consolidate the collected data. The primary
data collected from the focus groups combining with the support of information from
secondary data, this research will get a better answer to the research question.

23
3.5.1 Primary data

Primary data is data collected from first-hand data by researchers using surveys,
interviews, or experiments. Stephanie (2018) states that the research project is taken
into account when collecting this information directly from the main source. According
to one study (Robson & McCartan, 2016) it seems clear that the primary data represents
higher credibility. Our primary data are obtained through the online meetings with
participators who were selected for our focus groups. One advantage of the zoom online
meeting is that it assists us in overcoming the long distance and time difference between
our participators and us. Also, it followed the suggestion of social distancing and
protected all the people from the COVID-19 virus. The lag, bad connections and
relevant technical issues may occur during the meetings which become a disadvantage.
So we held the meeting with a stable wireless network connection to ensure the quality.
One reason for collecting primary data is that the results may be more trustworthy than
secondary data because it is collected directly by the researchers, it was objectively
collected through detailed planning and collected scientifically for the intended purpose
of the study.

3.5.2 Secondary data

Secondary data is data that has been collected through primary sources and is available
to researchers for their own research at any time. This is a type of data that has been
collected in the past. In our research, we include company websites, the annual reports
of some brands, and data shown on third-party marketplaces. Company websites
present an overview of the details and an overview background that may be useful to
our analysis. Companies 'annual reports also provide comprehensive information that
enables us to learn the co-branding strategy of the firm objectively. In the process of
our case study, we need multiple sources except the primary data to acquire credible
data and these secondary data allow us to check the facts mentioned by the participators
from the focus groups.

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 3.5.3 Case Study

In this study, two co-branding cases will be selected with opposite results, among which
the successful cases are LV with supreme, and the other one is H&M collaborated with
designer Erdem Moralioglu. The reason for choosing them is that they are both brands
in the luxury and fashion clothing industries, which is more conducive to the
comparison of similarities and differences between them. Moreover, this study mainly
summarizes the reasons of failure cases by comparing two examples.

LV x Supreme
Supreme and Louis Vuitton collaborated for the first time in autumn/winter 2017,
creating a collection of clothing, accessories and jewelry that was displayed in the
Windows of their respective stores. The company is looking to boost its street
credibility through a partnership with skateboard brand Supreme. (Fregne, Björck &
Dimitrova, 2018).

Starting as a skateboard brand in New York in 1994, Supreme has become one of the
coolest brands in the world, with an avid and loyal following. The brand developed
greatly is because Supreme is builting on a clever marketing. To be illustrated, Supreme
usually sells limited-edition products to whet customers' appetites, and they are tend to
communicate with consumers on social media platform, rather than traditional
advertising on commercial channels like magazines, so as to show to customers that
they are distinctive and irreplaceable brand (Fregne, Björck & Dimitrova, 2018). In the
combination process of Supreme and LV, LV provides Supreme with high quality, high
reputation and relatively high price, while Supreme brings LV a richer brand image and
brand culture, even extend to the millennials’ market. In the following content, there
are three main reasons discussed that why LV and Supreme achieved the big success.

Firstly, complementary functions. LV is one of the most famous fashion and luxury
brands in the world. Most of the target customers are middle-aged and mature. However,

25
Supreme as an outstanding street popular brand in the market, is mainly consumed by
young people who pursue trends. Regardless of the brand's consumer group or market
positioning, these two brands have several difference. Nevertheless, it is precisely
because of the so that cooperation that brand connections are established. For example,
both parties expanded customers market to the partner's consumer market and share
customer resources, which is effective. On the other hand, LV's fashion, leisure and
business brand image to some extent will arouse the curiosity and culture shock of
consumers and occupy a major position in the market. The biggest characteristic of
Supreme is trendy and fashion. Therefore, the two brands represent different styles of
products, and the joint product of the two brands combines the most distinguish features
of the two brands. Moreover, with the aid of the competitive advantage of each other,
created jointly by the partnership to millennials preferences products as well as opened
the market of young people. Under the classic brand culture background of LV, the
brand awareness of Supreme also improves greatly in the world as well as mutual
benefit and win-win results were achieved.

Second, high brand awareness. Co-branding is not only the simple choice of partners,
but also the choice of appropriate brand partners for cooperation is crucial to having a
success of co-branding, because brand awareness is the main condition. If the two
brands to be cooperated have high brand awarness, it means that the co-branded
products can be more widely known and even loved by more consumers. LV is one of
the most famous luxury brands in the world due to its rich brand connotation, distinct
brand image and high product quality, and it also has a large consumer group and more
loyal consumers. Supreme's influence is also not to be underestimated in, since its
consumers are mostly young people who pursue fashion and trends. Therefore,
Supreme occupies a major consumer market for young consumers. Both parties are well
known and have large consumption groups, which lays the foundation for the success
of their cooperation.

26
Third, brand culture is different. LV is famous for its high quality leather goods. LV
can always maintain the image of high-end luxury brand is because LV is a historic
brand in the mind of consumers. While Supreme is a young brand. It was born less than
30 years ago, and skateboard is the core of production, so that it attracting many young
people who love street culture and skateboarding. At the same time, the brand culture
of Supreme also became the street trend of New York. Therefore, the cultures of the
two brands are quite different and there is no cultural connection. However, it is also
because of different cultures that consumers become curious about brands. It is worth
noting that co-branding is a double-edged sword, but LV and Supreme were lucky not
to be adversely affected. Instead, they became famous all at once and set off the craze
of co-branding and became classics.

H&M x Designer Erdem Moralioglu

Designer Erdem Moralioglu established his personal brand Erdem in London in 2005.
Although the brand was not established for a long time, it quickly became an important
exhibition brand in London fashion week. The same echelon includes more mature
designer brands such as Christopher Kane, Roksanda and Simone Rocha.

From 2012 to 2014, Erdem Moralioglu has won several awards from the British Fashion
Council, including the most important women's wear designer of the year in 2014.
Erdem's revenues were £9.5million in the previous year, and the brand has grown at an
average compound annual rate of 40 per cent. The brand's profitability is sufficient to
cover the cost of opening a new store in London without outside investment.
Nevertheless, the brand's main market is the United States and it is starting to make
inroads in Europe. Erdem's signature designs are romantic prints and tuxedos. His
designs are popular among celebrities and many of whom have also become famous for
wearing the brand's dresses. With an average price tag of between £500 and £4,000, the
collaboration with H&M will give consumers celebrity haute couture at fast-fashion
prices. Some of Erdem's signature designs, such as a leopard-print jacket and a classic

27
print dress, are revealed in the latest H&M joint announcement (Mrad, Farah & Haddad,
2019).

Firstly, the brand partners lack of international recognition and social media
controversy, which cannot attract the majority customers. Erdem is a low-key brand
and it is not active on the platform of social media. Therefore, apart from some
professional fashions who know about this brand, most of consumers may not know
much about this brand, or even have never heard about it. Therefore, it is difficult to
arouse consumers' purchase desire and interest. In addition, in this co-branded series,
H&M overestimated the market recognition of co-branded objects in Asian markets,
and the low public response also resulted from this market misjudgment. To be
inllustrated, large print designs are not suited to the needs and preferences of Asian
consumers. It has also been a major drag on the collection's sales in Asia, which
includes China, is becoming an increasingly important market for fast fashion. It is
worth noting that Erdem is the first young designer brand besides Alexander Wang to
cooperate with H&M in recent years. Despite its excellent profitability, Erdem still lags
behind Alexander Wang in terms of brand recognition. The reason is that Alexander
Wang has a Chinese identity and a populist movement style, so that the brand itself has
a high degree of recognition in the Asian market and is favored by most Asian
consumers. The popularity of partners directly affects the image of co-branded products
in the minds of consumers, so it is not simple to catch customers interests in Erdem as
Alexander Wang, which is unfamiliar to Asian consumers and not active on social
media platforms.

Secondly, the price was higher than that of fast fashion, but the quality did not reach
the desired effect. Fast fashion co-branded collections are often criticized for their
quality. Consumers believe that without the support of quality workmanship, the design
of luxury brands is not much different from that of common brands. The case of the
H&M with Erdem co-branding is affected by a mismatch between quality and price.
From the design point of view, the collection has many dresses, such as long skirts,
28
thick coats and suits. If at the expense of fast fashion, the final quality is really worrying.
As a result, consumers are not willing to pay the same money for low-quality products.
What's more, poor quality will not only disappoint consumers, but also damage the
original image of the designer brand, and ultimately lose the original meaning of co-
branded design. If consumers first learn about Erdem through this co-branded series,
their impression of the brand will overlap with that of the co-branded series. Therefore,
the combination of high fashion and cheap fashion is not appreciated by most
consumers. There is no doubt that the quality of light luxury goods is different from
that of fast fashion. As a result, this will enable consumers to produce a self-denial
psychology, that is to say they do not want to use high price to buy fast fashion products,
because of the fast fashion products production level and quality are not up to the
standard of the light luxuries. Furthermore, it cannot even reflect the characteristics of
the product, which is why increasingly luxury brands no longer cooperate with fast
fashion. Despite its recent efforts to environmental-friendly, H&M has been dogged in
the past by scandals over its supply chain and the burning of recycled clothes in the
name of environmental protection. Therefore, consumers' love for fast fashion brands
gradually declines. It may be the reason why designers cooperating with H&M are
becoming more and more exclusive and have less space for cooperation, and it is also
one of the reasons why H&M failed to cooperate with Erdem this time.

3.6 Procedure

In order to produce a high degree of consumer compatibility, the co-branding needs to

have a steady flow, and it needs to use a large flow to support sales volume, solve the
brand aging problem. Product structure is one of the fastest ways to solve these
problems. It can be said that the common way is co-branding. The co-branding series
is the added value of the product itself. Aiming at different target groups, co-branding
has demonstrated various attractive extents. The main consumer for co-branding are
youngers who are working or at school.

29
The focus group is divided into four categories, which are Chinese customers, foreign
consumers, young workers, and middle-aged practitioners. Before the meeting with
participators, the guideline was made by the researchers. It remained flexible which
allowed the follow-up questions to emerge during the meeting process. There are some
open questions in order to receive insightful and deep thoughts and answers from the
participators. In the beginning, the research topic and purpose will be introduced and
also asked for permission for the recording. Some of the participators are not willing to
be recorded, so recording was stopped for the entire group and wrote down notes. In
order to gain trust and leave a good impression against participators, we primarily
checked the anonymity with them as well. After that, by asking some simple and easy
questions which make the participators feel relaxed and feel positive to join the
conversation. The average time of our one meeting for a single group is around 30
minutes.

Table 1 provides a brief instruction of our participating groups.

Groups The nature of Location The age The number The major of
the range of the of the the
participators participators participators participators

Group Chinese China 20-26 10 Bachelor and

A customers (Online) master students

Group Foreign Sweden, 21-29 10 Bachelor and

B customers Germany, master students
(Out of Japan,
China) America
(Online)

30
 Group Young China and 24-32 9 People who
C workers Sweden currently
(Online) working in
fashion
industry or
famous brands
companies

Group Middle-aged China 33-46 8 People who

D practitioners (Online) has worked in
the fashion
industry for
about 10 years
and some of
the relatives
from Group A

Table 1 Participating groups’ instruction.

Generating the information we received from the participants, consumers of different

ages and at home and abroad will have different purchasing needs and psychological
changes when purchasing products. Hence, co-branding has various attractions for
different groups. It is conducive to analyzing and summarizing customers’ consumption
patterns and psychology for co-branding.

3.7 Data Quality

3.7.1 Reliability

31
According to one study(Collis & Hussey, 2014) it was claimed that reliability means
that researchers can repeat the study many times and still reach the same conclusion.
However, the focus group meetings conducted by us are complex and based on real
time events with different people with various ideas, combing with the development of
the co-branding and partner selection strategy, where it may be difficult to achieve exact
and definite answers in the future. It can never be assured that a repeated study would
result in totally same answers. To minimize deviation and to increase reliability of the
data collection, we use the transcripts and record most of the meetings, after we sort
out the data, we sent the data back to the participants to ensure that the information we
have are accurate.

3.7.2 Validity

Validity is the ability for a researcher to be able to actually measure what they want and
to successfully gain insight to the participators skills and capability of accurately
answering the questions (Collis, 2014). Combining the primary data and secondary data,
the validity of our study has increased. We have a basic understanding to the field of
our study after collecting and analyzing the secondary data (the literature review and
the case study) which laid the groundwork for what type of data we need to collect and
how to accurately collect it. Another key point is the tutor and the opponent groups
provided valuable suggestions and comments on our data collection which can increase
the validity of our data.

3.7.3 Generalizability

Saunders, Lewis and Thornhill (2012) discuss this in phenomena that generalizability
refers to whether the findings can be applied to other settings or if it can draw general
conclusions. It is an important point to us because the sampling size of our qualitative
study is much smaller than quantitative researches. In our four focus groups, we have
about 40 participants with a comprehensive characteristic. They have different jobs,

32
titles, nationalities and from different age ranges. Therefore, the researchers will choose
the samples that are qualified and reliable.

3.8 Ethical considerations

Maxwell (2012) states that potential ethical issues must be considered throughout all
steps of the way of the research. Within a qualitative study, there are multiple levels
where ethical issues could become a barrier to the research. Firstly, informing and
explaining to the participants about their roles, benefits, risks of the online meetings
and about the purpose of this research, structure of the focus groups before interviewing
Throughout the meetings, assuring the participants that they did not have to answer any
questions which they felt uncomfortable with. Fully respect will be provided for all the
participants. The participants were asked about how they felt at the end of each meeting.
They are also informed that they can read anything we wrote before the submission of
the study due to their names or information may occur in the part of empirical findings.
They have the authority to delete any information that they would not willing to be
presented which is related to themselves. With regard to ethical considerations, all parts
of the conference are fact-based and faithfully stated and presented.

3.9 Data Analysis

In the data analysis, the researcher mainly use the thematic method. Thematic learning
means there is one theme which includes several perspectives together. According to
one study (Varun, 2014) it seems clear that when all subjects are integrated there will
be a lot of occasions to communicate with people, and strong community interaction.
It was conducted into six steps. Firstly, the notes and information will be generated into
a much formal transcript from online meetings. In the third stage, extracting the highly
related and useful information to this study. Information and opinions about the co-
branding strategy and partner selection processes were mostly selected. Separating the
information into different themes as the next step and reviewing the themes to see how
they fit with the data set. In the fifth stage, the advantages and disadvantages, revelation

33
and the standard will be defined. Finally, all pieces were in place and tightly integrated
with the high-quality data obtained, so that it enabled the researchers an in-depth
understanding based on the common themes and the theoretical framework.

34
4. Findings

In this chapter, combining with the primary data collected from four participating focus
groups of our online meetings, the empirical findings are presented.

Main 1.Codes 2. Description

categories

Support Strong-buying willingness; This theme refers to the participants

Excitement; Interested; curiosity; who are favorable about co-
Fashion; Engaging branding

Oppose Big expenditure; Wasting money; The opposition of support, and it

unnecessary; Lack of trust represents those who are
unfavorable about co-branding

Neutrality Depends on the design, cost and This theme is the group who are
the brand etc. taking a neutral attitude

Based on the focus group, the findings and discussion could be proposed as following.
Co-branding wins both domestic and foreign markets. Young people are the main target
for co-branding for their consumption characteristics. At the same time, because young
women occupy a unique position in the consumption of young people, they are listed
separately for analysis. However, it seems that it has a relatively low appeal to the
middle-age group.

4.1 Support
"I have bought several co-branded products. I think they are very fashionable and
it suits my aesthetic standards."
"Something about co-branding makes me want to own this product very much, and
I am willing to buy it. "
35
 "I think the joint style looks better than the ordinary one. It has a sense of design
and will make me look very special."

The participants who mentioned these three opinions were all young people, and they
supported co-branding and expressed their interest in the idea of co-branding products,
which they thought had characteristics and could make them look different.

"Although the joint product is expensive, I still want to buy it."

This participant is also a young consumer. It is clearly showing that there is a strong
willingness to buy co-branding products even though it is expensive.

According to the discussions from the above participants, it suggests that most of the
young generations are interested in co-branding products and they have strong willing
to spend money on it. Some of them discussed that they are just beginning to be
financially independent, and their desire to buy has been suppressed for a long time,
and exploded in a short period, especially for the stimulating consumption of co-brands.
Additionally, by summarizing their views, the researchers found that most of them had
a strong curiosity and desire for a new thing. According to their description of
themselves, the majority of young generations are not married yet and have a little
burden from the family. They even have a strong consumer background. Besides, in the
consumption process, this group of young people also show the personality
characteristics that this age group wants to match. They tend to choose products directly,
usually because of the style, colour and shape and it is more tend to impulse
consumption.

4.2 Opposition

"I know this product exists, but I have never tried to buy it."

36
 "I've heard a lot about co-branded products, but I usually just look at them and
stop."

According to the comments made by these two participants, it can be seen that they are
not very interested in joint products and have no strong desire to buy the products.

"In my opinion, joint name means that the brand parties join together to make
money for consumers, not to bring better products to consumers."

The participant who gave this opinion was a middle-aged worker, and his opinion
implied his distrust of the co-signer. In addition, it can be seen that the participant are
unfavorable about co-branding because some of them thought mentioned that the brand
wanted to gain more benefits from the consumers.

"Family expenses are too much, plus the monthly loan, the rest of the money can
not afford to buy other joint products."
"I think some co-branded products just change the color and logo of the partner,
which is nothing new and it is too expensive for me."
"Most of the co-branded products are a little expensive, just like the famous LV
and supreme before, I didn't buy them, so I was not willing to spend too much
money on them."

All three participants mentioned that the co-branded products were expensive, and they
could not afford them. Also, there is one of them also discussed that the co-branded
product is nothing new, just a change in appearance but no real change.

The researchers found that above opinions were most expressed by middle-aged
participants, their consumption patterns are different from those of young people, and
middle-aged people's consumption patterns are relatively practical and managing. It
also fits the social role of the middle-aged. On an analytical level, most middle-aged
37
participants in this age group were married and had children. Therefore, in terms of the
consumer demand they express, they are more focused on the needs of their families.
The needs of children are another key word mentioned many times, followed by food,
clothing, housing and transportation. In terms of consumer demand, they said that
because of the current stage of employment has been stable as well as the income.
Therefore, the consumption patterns and consumption concepts of middle-ages group
are different from the younger generation.

In addition, the study found that middle-aged Chinese women in focus group D were
able to analyze their thoughts separately. Middle-aged women believe that their family
attributes determine that they not only buy the goods they need, but also play the role
of family shoppers, that is, the main buyers of children's products, old people's products
and household goods. In addition, they mentioned that they are more cautious in
choosing and buying products as the variety and flexibility of their products increase.

4.3 Neutrality

"As far as I am concerned, there is no need to buy those expensive ones. I dont
think it makes any sense to me if the price is acceptable within my budget."
"I agree with him. If it was a memorable joint, I'd buy it."
"it depends. If the joint product is really good, ill consider buying it."

In the above discussion, young people and middle-aged people are included. Some
mentioned that they would consider buying a product based on its price and availability.
Some also mentioned how the appearance, color and design of a joint product can
influence their buying decisions. The researchers found that many of the participants
indicated that they would evaluate whether the purchase was worth it from multiple
perspectives.

38
 "Although co-branded is very popular now, it also depends on which two brands
are co-branded. If it is a brand I like or I often buy, then I will probably buy it."
"I'm neutral about co-branded brands that I don't usually buy, I don't like them but
at the same time I don't hate them, and like they just said if I like that co-branded
brands , for example, I like converse shoes, last time I bought a co-branded pair of
converse and hello Kitty shoes, and I was so happy with it."

Participants pointed out that in the case of co-branding, the decision to support or not
is based on the brand they like. From the perspective of consumers, these participants
have a high degree of customer loyalty to their favorite brands and are willing to support
co-branding. On the contrary, if they are not the brand they like, they will treat them
with a normal and neutral attitude.

Some of participants' opinion are related to customer loyalty and customer needs
aspects. They clarified that they have fixed needs for certain brands, and most people
in this group believed that the brand can meet their needs, so they have a long-term
understanding and emotion for the brand. For this group, the researchers found that the
participants are mostly made up of young students and people with basic knowledge of
fashion so that they have their own criteria for co-branding. In addition, some of the
brands mentioned in the participants' statements have their own unique styles and brand
personalities like converse and hello Kitty mentioned above. At the analysis level,
participants would support their loyal co-branded brands, but this does represent that
they support all co-branded phenomena.

In the whole, by analyzing the statements of the four focus groups, the researchers
found that most young people prefer co-branding to middle-aged people. Furthermore,
the four groups of participants were classified into three groups: supporters, opponents
and neutrals. The supporters are mostly young people. On the contrary, most middle-
aged people formed opposition groups. In addition, the researchers found that neutrals
are worth to studying as this type of participants are highly loyal to their favorite brands.
39
In addition, based on the information expressed by the participants, the researchers
found that customer loyalty and the value the brand brings to consumers could influence
consumers' purchasing psychology.

5. Analysis

5.1 Revelation from different groups comparison

For Chinese consumers, consumption patterns have changed over the years. It is also
indicated from the statements of some participants that the majority of Chinese
consumers are tend to save their income. The consumption patterns in western countries
are different from China, because most of the consumption patterns in foreign countries
are based on credit cards ather than saving money. As a result, Chinese consumers tend
to pursue practical and conservative consumption patterns. While policies to encourage
consumption and boost domestic demand are becoming clearer, Chinese consumers
will still be constrained by restrictions on credit card spending. Despite the rising
disposable income of Chinese households, most Chinese consumers are still not blindly
buying more expensive goods. Consumers' pursuit of practical and simple consumption
patterns is characteristic of China, which has deep-rooted cultural traditions. However,
in recent years, the results of the research on the consumption concept of Chinese
consumers indicate that although Chinese consumers are still the most consumer groups
in the world who believe in brand products, they will become the best group in the
pursuit of product value and hope to get most of the products. The value of the money
paid matches.

Unlike Chinese consumers, foreign consumers tend to live within their means and pay
more attention to investment and comfortable consumption. The United States is a high

40
income, high consumption, low savings country. Participants from the United States
who joined in the focus group said most of the spending was on food (including food,
beverage, tobacco) and clothing consumption in the total consumption expenditure is
relatively low in the United States. The medical expenditure of American residents has
become the largest consumption expenditure of American residents, which is an
exception in western developed countries, mainly due to the highly market-oriented
medical services in the United States. The proportion of transportation expenditure of
American residents is also relatively high, indicating the high degree of modernization
of life. The Swedish model is also known as the high-consumption model, and its
consumption level is in the forefront of developed countries. Sweden has a relatively
low household savings rate compared with other developed countries, but its model of
high consumption and low savings is markedly different from the American model
based on high welfare. Social security and welfare policies are the biggest features of
the Swedish economy. Japan's consumption patterns are markedly different from those
of the United States and Europe. From the perspective of consumption pattern, since
Japanese people are not inclined to borrow and consume, the credit consumption and
overconsumption in Japan are far lower than those in the United States, and the cash
consumption pattern still occupies an important position. Japan's strong sense of
resource crisis leads it to pursue a comfortable life and moderate consumption pattern
at the same time.

From the point of view of age. First of all, the characteristics of the young group are
enthusiasm, active thinking, fantasy and adventure and they shopping online. This is
also why young people like to pursue fashion and novelty and are willing to make
consumption contributions to new products (Vigneron & Johnson, 1999). According to
focus group participants, young people are willing to accept new things and adapt to
them more quickly. To be illustrated, they like to buy products with characteristics of
trendy in terms of satisfying themselves. Some participants said independence is what
young people have always sought about. They look for opportunities to show their
individuality. Therefore, the consumption patterns of young consumers are influenced

41
by this psychology. For example, buy new electronics or try a new restaurant. Most
young consumers have a certain income source and they will not put too much financial
pressure on themselves, so they will pursue their favorite products and consume.

For middle-aged workers, they are usually at the peak of their lives and careers. They
have a lot of work pressure, the highest income level, the strongest purchasing power.
Psychological characteristics change coupled with the growth of age. In this group of
middle-aged consumers, the biggest characteristic is rational consumption. In addition,
the characteristics of rational consumption distinguish middle-aged people from young
consumers, because middle-aged people reflect the characteristics of rational
consumption in the psychology and behavior of purchasing decisions. For example,
according to the participants' statements, when they buy goods, they tend to pay more
attention to the three main factors of the goods: practicality, quality and price, rather
than appearance. Before making a purchase decision, they will consider and judge
whether a product is worth buying from multiple perspectives to avoid impulse
consumptions. Therefore, when middle-aged people buy goods, the factors that affect
their purchase are mainly the brand, price, performance requirements, and even the time
and place of purchase. As a whole, it is in line with the characteristics of rational
consumption. In addition, they are less likely to buy unnecessary and inappropriate
goods, so there are few unplanned expenditures and impulse purchases. Second, another
difference between middle-aged people and young people is that young people pay
more attention to fashion than middle-aged people. Most middle-aged people have
families to support. Different from young people, they need to consider family factors
before making consumption, so that their consumption concepts and patterns need to
be adjusted. In addition, the practicality of products is one of the main factors that
middle-aged people pay most attention to when buying products. For example, the
structure and convenience of the product or whether there a more cost-effective option
in the same production category. Another important reason is that middle-aged people
are more likely to plan ahead before making a purchase decision. This also leads to
their rich consumption experience and strong product recognition ability. Most middle-

42
aged people are willing to choose products they have bought many times, and brand
promotion cannot influence their purchasing decisions.

5.2 The advantage and disadvantage of co-branding

Co-branding is where two or more brands collaborate to learn from each other's design
elements or complement each other to launch new products, thereby occupying a wider
potential market (Hillyer & Tikoo, 1995). Consumer aesthetics are constently changing,
so brands want to deeply understand and meet customer needs. At the same time, in
order to attract more consumers' attention, brands choose to cooperate with other brands
so that co-branding become increasingly popular. (Stegemann, 2006). Due to the
sluggish growth of luxury brands, the growth of the global luxury market began to slow.
The rapid development of the fashion brand market is in stark contrast to the slowdown
in the growth of the luxury brand market. It is precisely because of the popularity of the
trendy market that many luxury brands have seen market prospects.

The advantage of co-branding is to expand the target consumer market. As mentioned

in the case study, LV's main consumer group is mature and mature middle-aged people,
while trendy brands like Supreme are mainly targeted at young people. Luxury brands
and fashion brands are not related at first, but due to the joint cooperation, the
relationship between the two different styles of brands is closer. In the process of
cooperation, both parties share customer resources, thus expanding their consumer
market (Leuthesser, Kohli, & Suri, 2003). Through cooperation with other brands, the
product design and style of both sides are integrated, which enhances the value of the
brand and thus attracts more consumers.

However, there are still some problems in brand cooperation, the depth of cooperation
is not enough. In the current brand association, there are many cases of cooperation that
do not deeply understand the significance of co-branding. For example, in the design,
it is more to provide the use right of each other's logo and interchangeability of design
elements, but it does not really integrate the design concept of each brand into the joint

43
series. In marketing, resource integration and channel sharing have not been realized.
Instead, it relies more on the media and celebrities to grab more consumers' attention.
Co-branding is hard to price and has only one channel. There is an unbridgeable gap
between luxury brands and fashion brands in product prices because designer clothes
are expensive, but fashion brands are more affordable (Oeppen & Jamal, 2014).

5.3 The standard of the co-branding partner selection

Regarding the cooperation in the field of product development, enterprises are

participating in the alliance, from which they should make full use of the
comprehensive advantages of the alliance, share management resources, coordinate
with each other, and jointly develop new products. In the co-branding strategy when
selecting partners, due to the short-term cooperation, the brands are supposed to focus
on the cooperative effects and market demands. The core competitive advantage
between partners must produce synergy. The joint partners should have their own core
competitive advantages that can be used. By combining these core competitive
advantages with each other, the promotion effect of the brand can be improved. At the
same time, they complement and strengthen each other in resources and capabilities to
achieve a strong alliance. Furthermore, Partners should use some modern information
transmission methods, such as Internet and e-commerce. The information required by
the partners is shared, the brand communication and cooperation between the partners
are strengthened, the response speed of customer needs is increased, and the joint
product has an advantage in the competition. More generally, the co-branding is a new
idea. It emphasizes how companies use their core capabilities to find partners. Each
company concentrates on developing its core capabilities or core business and uses its
own advantageous resources. Through the rapid reorganization of business, the
company can create special value and achieve a win-win goal with its partners. For the
two brands, the partners must have clear goals and action plans as the direction of the
joint efforts of various enterprises to achieve the purpose of further promotion. The
joint name requires companies to break the original organizational boundaries and use

44
the idea of mutual assistance to reconsider cooperation and operations between
companies.

Measuring partners includes many aspects, such as the specific content of cooperation,
the driving force of cooperation, and the form of cooperation. It is not comprehensive
to determine the criteria for selecting partners from a certain angle, and all aspects
should be considered comprehensively. In choosing the partnership, what needs to
consider is to find a rule to investigate the value that the co-branding would bring given
that the association between two brands builds. First and foremost, both sides are strong,
and both have something valuable to contribute to this relationship. Their motivation
for being involved in this relationship is to actively pursue future opportunities, rather
than passively covering up weaknesses or avoiding difficulties. The importance of the
cooperative relationship has become the main strategic goal of each partner. Both
parties have a short-term common interest. This relationship plays a key role. Based on
clear and specific requirements, short-term cooperation meets specific needs. There is
no need to establish a common business vision with partners, but only need to maintain
effective contact to serve the current business. Co-branding believes that both partners
have developed a method of sharing benefits so that they can work together smoothly,
and they have established extensive contacts between many people at many
organizational levels. The partnership has been institutionalized, with clear
responsibilities and precise processes.

In summary, on this basis, co-branding conducts an empirical evaluation and effective

selection of its cooperative brands from six aspects of technical strength, resource level,
intellectual property rights, anti-risk capabilities, reputation and compatibility. Hence,
with the help of partners, co-branding makes up for its own shortcomings, forming a
joint force to achieve the goals that its own conditions cannot achieve. By analyzing
the external environment and opportunities, the core capabilities of partners are
evaluated. Co-branding needs to select companies that have the core capabilities
customers need. Besides, two brands need to be able to adapt to the alliance quickly

45
and have good communication connectivity, cross-organizational participation, and the
ability to reorganize an organization.

6. Conclusion

The purpose of this study is to investigate and explores the strategy of co-
branding selecting partners. In this research, there are two main implementations of
methods, focus group and case study. With a third-party perspective, objectively
summarize and classify the opinions from different participants. The result shows that
the strategy of selecting co-branded partners will be influenced by the provided value
from business perspective and consumer psychology. Besides, through comparing the
similarities and differences between two different cases and the researchers came to the
conclusion related to the failed reasons. In addition, this study is to express that there
are many articles studying the benefits of co-branding, but few analyzing its
disadvantages and potential risks. therefore, there is a need to investigate on the
negative aspects of co-branding. Additionally, the failure case aims at enumerating the
points that will be ignored easily when co-branding and provide related suggestions and
strategies to learn of. Furthermore, by exploring the subject and the analysis of the
difference between brand cooperation, readers can understand the co-branding is not
simple randomly select a partner, instead the interaction of two brands between
resources and brand culture, the integration between the for how to make the
cooperation will exert positive effects on both sides, how to choose the thought that the
right partners and find out how to avoid risks. Planning and evaluation are essential,
this including studying the psychology of consumers, adjusting the perception of both
internal and external brands, and what managers hope to achieve through cooperation.
Two strong brands can combine the advantages of the brand or take advantage of each
other to achieve a win-win situation.

46
7. Discussion

7.1 Implications

After exploring and analyzing two representative examples, it is clear that there are
similarities and differences between these two cases. The main purpose of this paper is
to analyze these two examples, list the places that need to be paid attention to when
brands need to cooperate with the others, and put forward suggestions from an objective
perspective.

7.1.1 Take advantage of both sides' strong brand equity strategies

When a brand chooses another cooperative brand as its partner, it is particularly
necessary to measure whether the brand has strong brand equity, which includes
product quality, brand awareness, brand image. In other words, identify what is the
advantage of the brand. For example, LV has established its foothold in the luxury
industry as a top fashion and luxury brand. On the other hand, although Supreme has
young history, it is deeply pursued by the young people who pursue individuality, and
its popularity around the world is relatively high. Strong brand equity is an important
prerequisite for the successful cooperation between LV and Supreme, which also
provides consumers with reasons to buy and stimulates their desire to buy the co-
branded products. In addition, it is also beneficial to improve sales performance on both
sides of the customer resources than the original expansion. Supreme has opened up
another new market for Louis Vuitton, combining luxury and streetwear to meet
millennials' demand for product diversity. On the other hand, LV provides Supreme
with high quality and high price, and because of its brand awareness, Supreme has
expanded its brand to the global. On the contrary, if the brand does not have an
advantage, then joint brand may become a challenge or risk for the brand. Take H&M
and Erdem for example, H&M is one of the well-known fast fashion brands, while
Erdem is in a tepid state in terms of brand awareness and brand image. As mentioned
above, it is a low-key brand, and few non-professionals know the brand. Therefore, the
joint collaboration of H&M and Erdem failed to achieve the expected effect, because it
47
was not attractive enough in the eyes of consumers. The resources and market potential
of a single brand are limited. Brand alliance can give play to their respective core
competitive advantages to open up new markets, such as distinct brand culture, while
also sharing huge operating and marketing costs.

7.1.2 Value and needs of customers

In the process of co-branding, the brand also needs to focus on the consumers
themselves, because the starting point of co-branding is to attract more consumers to
buy products. The success of co-branding depends on whether enterprises can touch
consumers and make them need their products. By foucusing on what value or needs
can bring to the consumer, brands with such a starting point, is the basis of when they
are extending brand marketing. When consumer needs the value, which is the value
of brand will stimulate short-term sales and enhance the brand reputation, make
enterprise and brand influence in cross-brand marketing complete precipitation.
Enterprises should understand that co-branding is not cooperation with one or several
fixed enterprises, but an interactive mechanism established between brands that can be
trusted. The object and theme of co-branding should be constantly changed with the
strategic adjustment of the enterprise, like LV and Supreme, which brings the cultural
fusion of classic and street trend to consumers, and consumers have a strong desire to
buy it. In the case of H&M and Erdem, it is possible that consumers are reluctant to buy
it because the co-branded products do not bring value to them. Consumers can buy
better products at the same price instead of the low quality at a high price.

7.1.3 Attribute complementary strategy

In the evaluation of brand association, consumers are motivated by interests to

distinguish, consumers will consider the two brands will bring their own benefits and
superiority, as mentioned in the second point, will bring their own value. For example,
the products jointly produced by LV and Supreme have both the mature and prudent of
LV and the young fashion of Supreme. The combination of the two brands makes

48
consumers feel that this product is worth buying. H&M and Erdem, although H&M
makes up for the shortcomings of Erdem's brand awareness, it is Erdem's general
performance in terms of brand awareness and brand culture that fails to stimulate
consumers' purchasing desire. Therefore, the cooperative brand should have the
attributes that its own brand does not have, and such attributes are also important to
consumers when they buy new products, thus increasing their desire to buy.

7.2 Limitation of the research

The sample we chose in our study is limited to the students and practitioners who are
related to the co-branding products or brands. Therefore, specific settings are
determined in our research. However, with the development of the co-branding strategy
and the background of globalization, the needs and goals of both customers and brands
may be changed by time. A deeper understanding of different contexts and types of co-
branding could broaden and enrich the findings of our research.

Moreover, the number of participants for each focus group are also limited in our study.
Our participants are mainly Chinese citizens and a few foreigners from some countries.
We have a limitation on the diversity of the nationality of our sample. To have more
participants and interview more people from various industries who are in different age
groups may provide us more detail information which enable us to have more deeper
and wider findings.

7.3 Future research

Since our study is based on a relatively small number of samples, if there would be and
future research, we suggest that the author could test our findings with larger number
of samples which can make the results become more accurate. To get a more deeper
understanding on the co-branding strategy and how brands select the partner, future
researcher can adopt the concept to a wider range which means that they can discover
the strategy in various industries. With the fast pace of development worldwide, co-

49
branding may become more popular and be used in more industries or even cross
industries, so it is worth to research more on this topic for future researchers.

50
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of Quality Assurance in Hospitality and Tourism, 8(2), 1-23.
https://doi.org/10.1300/J162v08n02_01

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Woiceshyn, J., & Daellenbach, U. (2018). Evaluating inductive vs deductive research
in management studies. Qualitative Research In Organizations And Management:
An International Journal, 13(2), 183-195. doi: 10.1108/qrom-06-2017-1538

Yuhui, T., Lisa, Y. C., & Kewei, C. Dai. (2012). The Influence of Cross-Border Brand.
Alliance on Attitude of Consumers: A Conceptual and Structural Model
Perspective. Annual SRII Global Conference, San Jose, CA, 927-935.

Study.Com (2020). Retrieved 12 May 2020, from.

https://study.com/academy/lesson/consumer-psychology-definition-
behavior.html

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Appendix 1 : Journals and articles which has been reviewed in the section of literatures review.

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Appendix 2: Focus Group Consent Form
Procedure:
As part of this study, you will be divided into groups of 8 to 10 people. The host will
ask you several questions were raised in furthering the discussion. The focus group will
be recorded, and a recorder will be present. However, your answers will be kept
confidential and your name will not be included in the final report. You can choose
whether or not to participate in a focus group, and you can stop at any time during the
meeting.

Information:
⚫ Note that there are no right or wrong answers to focus group questions.
⚫ Different points of view are encouraged, and hope everyone can do so.
⚫ Contribute your ideas and fully respect will be provided.
⚫ Please don't interrupt when other participants are speaking.
⚫ Be honest, even if your answers are contrary to those of other panelists.
⚫ If you choose to participate, you will be asked to respect the privacy of other focus
group members.
⚫ Do not disclose anything discussed during the study. A researcher in a unit or unit
name
⚫ The department] will analyze the data, but -- as described above -- your response
will remain confidential, no names will be included in any report.

Contact
If you have any questions or concerns about this research, please contact:
Name: Jiawen Ji
Email address jijiawen2016@126.com

Signature:
Sign name: ---------------- Date: ------------------------

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Appendix 3: Basic information about participants

1. What is your gender?

• Male
• Female

2. What is your age?

• 18-25
• 26-30
• 31-35
• 36-40
• Above 40

3. What is your job?

• Bacholor/Master Students
• Workers
• Others

4. What is your monthly income?

• 8000-10000
• 10000-12000
• 12000-15000
• 15000-20000
• Above 20000

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Appendix 4: Focus Group Questions (Opened Question)

A. What are the main expenses of consumption?

B. whether you will arrange your money properly?

C. How do you view the phenomenon of joint brand? Do you support it or not?

D. What is your most impressive co-branding collaboration?

E. Have you ever bought a co-branded product? How about your experience

F. Which part will you most focused on the co-branding product, such as the brand or
the price?

G: Do you have any suggestions for co-branding?

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