An empirical study of the co-branding partner selection strategy A perception from the negative perspective combing with consumer psychology

An empirical study of the co-branding partner selection strategy

PAPER WITHIN Bachelor thesis in Business Administration AUTHOR: Tongda Lu, Jiawen Ji, Jingming Zhang

TUTOR: Lucia Pizzichini JÖNKÖPING May 2020

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.

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.

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

5. Analysis ... 38

5.1 Revelation from Different Groups Comparison ... 40

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

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

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 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 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

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-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

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.

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).

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.

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

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-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

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

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

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

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

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

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.

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.

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

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.

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.

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,

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.

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

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,

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-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.

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 the

participators

Location The age range of the participators The number of the participators The major of the participators Group A Chinese customers China (Online) 20-26 10 Bachelor and master students Group B Foreign customers (Out of China) Sweden, Germany, Japan, America (Online) 21-29 10 Bachelor and master students

Group C Young workers China and Sweden (Online) 24-32 9 People who currently working in fashion industry or famous brands companies Group D Middle-aged practitioners China (Online) 33-46 8 People who 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

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,

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

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.

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 categories

1.Codes 2. Description

Support Strong-buying willingness;

Excitement; Interested; curiosity; Fashion; Engaging

This theme refers to the participants who are favorable about co-branding

Oppose Big expenditure; Wasting money;

unnecessary; Lack of trust

The opposition of support, and it

represents those who are

unfavorable about co-branding Neutrality Depends on the design, cost and

the brand etc.

This theme is the group who are 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. "

"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'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

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.