Consumers often choose particular products, services, and activities over others because they are associated with a certain lifestyle (Brandon et al. 2003). The purchase of goods or service comprises a number of factors that could cause impact on each decision (Hiu S. Y. et al. 2001). Moreover, from the consumer characteristics approach, it assumes that consumers follow particular decision-making traits in order to deal with their shopping tasks. These characteristics that have been identified are, such as, quality consciousness (Darden and Ashton, 1974) or brand and store loyalty (Moschis, 1976).
To begin with, decision theory has developed from psychology, organizational behavior and marketing perspectives, in order to understand the decision-making of individual for different purposes (Lye A. et al. 2004). There are three major groups of consumer decision theory. Normative decision theory (von Neumann and Morgenstern, 1947; Savage, 1954) framed how a decision maker should behave to gain maximum utility (Edwards, 1954; Simon, 1955; Fischhoff et al., 1983; Beach, 1998). Normative decision theory “hypothesized that decision makers to be uncertain about the occurrence of events in the external environment, but assume that decision makers certain understand their own preferences” (Fischer et al., 2000, p. 89). Nonetheless, some researchers argued that decision makers' rationality are limited (March, 1978) and are seeking to be “satisfied”, not maximize. Behavioral decision theory researchers claimed that consumers are adaptive decision makers (Payne et al., 1988, 1993) and their preferences are highly dependent on person-, context-, and task-specific factors (Edwards, 1961; Tversky, 1969; Lichtenstein and Slovic, 1971; Simonson, 1989; Slovic, 1995; Luce et al., 1997; Luce, 1998; Swait and Adamowicz, 2001). In reality, however, not all decision makers have well-established preferences. Therefore, researchers argued that contingent use of decision strategies result from consumers' preferences are uncertain (Payne, 1976, 1982; Christensen-Szalanski, 1978; Payne et al., 1995) and contingent weighting of attribute importance (Tversky et al., 1988; Fischer et al., 2000) by consumers. In addition, naturalistic decision theory (Klein et al., 1993) claimed it should be observed in the natural settings from real-life decision behavior to develop the decision models (Beach, 1998). Moreover, naturalistic decision theory approaches claimed that decision-making would be from both a process and outcome perspective. It assesses the situation and offers multiple paths to a purchase decision in the beginning which depend on the consumer's assessment of that decision situation. Hence, it encompasses decision-making in changing conditions, using ambiguous information, with shifting goals and objectives (Lye A. et al., 2005). Furthermore, all normative decision strategies fall within the “additive” group, reflecting a process of analyzing each option in detail (Lye A. et al., 2005). No single strategy, however, is efficient to cover all decision environments (Payne et al., 1995). The consumers, therefore, adjust their behavior and their decision strategy continuously in a way that represents reasonable accuracy-effort trade-offs (March, 1978; Payne et al., 1990). In addition, the consumers are adaptive decision makers (Payne et al. 1988). Consumers do not have a master list of preferences, creating challenges when they choose in an unfamiliar environment (Lye A. et al., 2005).
Simonin and Ruth (1998) indicated that a brand could be affected by the “company that it keeps” in its brand alliance relationship. The spillover effects can be defined as the influence of consumer attitudes toward the brand alliance on subsequent impressions of each partner's brand (Rodrigue C. and Biswas A.2004). They also further confirmed an inverse relation: the less familiar brands cause minor impact on consumers' attitude toward the brand allied product, but receive stronger spill-over effects from a co-branding than do familiar brands (see Lafferty et al. (2004)). Washburn (1999) and Washburn et al. (2000; 2004) suggested that co-branded products have the potential to bring winning to both two high-equity partner brands, which leads to greater spill-over effects. In addition, the brands with lower brand equity could benefit more from co-branding. Nonetheless, those brands with high brand equity would not suffer from a reputational downgrading. Voss and Tansuhaj (1999) also indicated the similar result; co-branded products can improve the evaluations of a previously unknown brand if the unknown allies with a famous brand. Musante (2000) further claimed that the perception of personality and attitude of a partner brand can be improved by co-branded products, when the brand allies with a second brand that is perceived to be superior on those dimensions.
Helmig B. et al. (2006) conclude a numbers of success factors of characteristics of constituent brand (1) Brand awareness; (2); Brand personality/attitude (3) Brand equity; (4) Brand familiarity; (5) Brand stability and characteristics of co-branded product (1)Products attitude; (2) Quality; (3) Production information; (4) Closeness.
”Product trial”, defined as an experience of consumer's first usage with a brand which would be a crucial factor to the manufactures in determining brand beliefs, attitudes, and intentions of purchasing (Kempf and Smith, 1998, p. 325). In Washburn J. et al. (2004) research of brand alliance and customer-based brand-equity effects, they predicted allying brands result in consumers to expect certain outcomes which would cause significant impact on experience attributes. They also claimed high-equity combinations are expected to produce more positive attribute performance before the actual product trial. When positive trial occurs, however, the evaluations of the cooperation branding are tempered. This study found pairing brand can provide consumers information that improves a product's attribute perception even before such performance be actual observed. They also suggested that an evidently function of the pairing brand that contributes most to the performance on the attribute being evaluated would be the differences in the credence attributes. In addition, Swait et al., (1993) suggested that relationship between co-branding and brand equity, and associative learning from a product's brand name which provide information for consumers and also represents images that have been developed based on their past experience with a brand or information they have gained about the brand. The pairing of particular brands could provide unique advantages to the dual-branded product. In general, the lead brand implies quality; the brand partner may play a role to prove certain product attributes. The stronger brand partners had no influence on these evaluations. The reason of this might be explained by the halo effect. The positive attitude which perceived from the well-known brand name and the likelihood of recognizing the particular product, not the disinfectant ingredient, expected absorbency.
Washburn J. et al. (2004) concluded that a positive product trial further improves these positive effects for experience attributes, however not for credence attributes. Washburn J. et al. (2004) concluded that a positive product trial could further improve these positive effects for experience attributes, however not for credence attributes. The consumers might like the product after trial. They claimed, however, allying with a high-equity brand would cause a positive impact on consumers' attitudes toward the product. It could only be confirmed by subsequent product trial (experience attributes), even after trial, the credence attributes still could not be verified. In other words, a good result does not affect on their evaluation of an attribute that would be hard to confirm to even after trial.
In contrast, even after a positive trial, high-equity branding partners would not be considered as a cue to make a search attribute more convincing. In addition, it appears that consumers are capable to distinguish between branding partners and realizing about which participant of co-branding would take most responsibility for the product's performance.
Furthermore, Washburn J. et al. (2004) suggested that co-branding could cause positive impact on consumer evaluations of individual brands that include the alliance in addition to evaluations of the consequential co-branded product. Walchli S. (2007) indicated the several different co-branding types, from short-term programs, for instance, cooperative advertising, joint promotions, or another type of brand allying is the temporary use of an established brand name in order to access a new market, or to ingredient branding, one brand, for example, is permanently presented as an attribute of another, or the creative use of complementary brand equities, or the product that with one name, it is, however, generally known to be offered by two different brand partners.
In Saqib N. and Manchanda R. (2008) study, they applied two different but related theoretical frameworks in order to explain consumer's evaluations of co-branded products of licensing effect.
First of all, the information integration theory (Anderson, 1981) proposes that people use previous experience as a cue to understand the information received from a stimulus. In addition, the information is evaluated and integrated one piece at a time, hence, people integrate the information with existing beliefs or attitudes after interpret and evaluate it. Simonin and Ruth (1998) also indicated that consumers' previous attitudes of two co-branding participants showed in each other's context based on information integration. In addition, the anchoring and adjustment heuristic (Tversky and Kahneman, 1974) could also explain consumers' information processing. Anchoring and adjustment could be referred to people integrate information by first piece of information received in the beginning and then from the direction of the first piece of information as a cue to adjust their evaluation of the second piece (Saqib N. and Manchanda R. 2008). A basic principal of anchoring and adjustment is that the adjustments would be considered as the direction of first piece of information which is so called “typically insufficient” (Tversky and Kahneman, 1974, p. 1128). By combining this theory and information integration theory (Anderson, 1981) could generate a theoretical basis for predicting consumers' evaluations of brand allying between unknown or new brand and well-known brand. The process could be predicted for the improved evaluation. Furthermore, there was a higher likelihood that consumers tend to have the salient attitudes toward the well-known brand first, and then the positive or negative attitudes have generated from the well-known brand would cause the impact on their judgments about the unknown brand (Saqib N. and Manchanda R. 2008). In addition, it is accessed and activated by memory (Fazio et al., 1989) would lead to a positive attitude congruent with a well-known brand due to well-known brand's salience. This positive attitude would cause the impact on consumers' evaluations which leads to affect transfer to the unknown brand as a “spillover effect” (Simonin and Ruth, 1998).
The Co-branding has become more common strategies to the consumer product manufactures in order to obtain more exposure on the marketplace, and also to avoid the potential threats from private label brand, and reduce the expensive cost of promotion by sharing with partners (Spethmann and Benezra, 1994). The premise of brand alliances (co-branding) is that the brand name could be considered as a valuable asset, by allying with other brand name to a way of synergistic pairing which would lead to greater than themselves.
(Rao and Ruekert 1994, p.87). Blackett and Boad (1999) defined co-branding as a way of cooperation that two or more brands which associate with its own significant recognition to the customer, and also to retain all the brand names (Blackett and Boad, 1999, p. 7).
Helmig B. et al. (2006) further indicated that there is a crucial component of co-branding, physical product integration, comparing with other forms of brand cooperation, it would be an essential constituent and differentiation guideline for the products. For example, one product allied with other brands, it could be recognized simultaneously with two brands by the consumers, and companies could gain the positive influences for both products. According to Rodrigue C. and Biswas A. (2004) indicated the literature has identified two types of co-branding (brand alliance) joint promotion and ingredient brand alliance. First, joint promotion involves the promotion of complementary product use and the ingredient brand alliance involves an integration of two products such that one product cannot be consumed without consuming the other.
Effect of Co-Branding
A series of researches of co-branded product, Rao and Rueckert (1994) and Rao (1997), Rao et al. (1999) indicated that consumers could have better evaluation toward the quality of a brand, which features unobservable attributes, when the brand is allied with other brand it would be simultaneously vulnerable to consumer support.
Levin et al. (1996) suggested that by allying with a well-known brand, consumers would have better evaluation of the product of the less known or well-known brands more than combining with an unknown brand.
In other words, the partner brands would cause a direct positive effect on consumers' brand awareness (Helmig B. et al. 2006). Voss and Tansuhaj (1999) also indicated that if an unknown or less known overseas brand allies with a well-known local brand, by doing this, it could lead to a better evaluation of consumer to the co-branded product.
Vaidyanathan and Aggarwal (2000) also found that a private-unknown brand product receives a more positive evaluation if it allies with a well-known national ingredient brand.
Fang and Mishra (2002) showed similar results which unknown brand would improve its perception by combining with a famous and high-quality brand. Moreover, Desai and Keller (2002) also indicated the extended effects of the host brand. By extending the level of an existing product attribute and establishing the ingredient to underpin preliminary expansion acceptance, a self-branded constituent, however, would results in more favorable subsequent category extension evaluations. Park et al. (1996) further indicated that consumers' positive attitude toward one brand result in positive direct effects. In addition, a co-branded product which consisted of two complementary brands would retain a better attribute profile to consumers than a brands allied product with two highly favorable but not complementary brands or a product which is directly extend brand of the dominant brand.
Helmig B. et al. (2006) also suggested that extensions that create a new attribute or characteristic to the product should ally an established ingredient, because by doing this would improve the evaluations of the original product and the further extension. Helmig B. et al. (2006) indicated the several success factors for Co-branding (1) awareness; (2) quality; (3) brand equity; (4)Advertising; (5) Degree of complementariness; (6) Brand fit; (7) Product fit; (8) Incongruence; (9) Fit of constituent brands and co-branded product; (10) Product involvement; (11) Brand orientation.
Keller who defined brand equity was primarily identified the consumer response to the marketing of the brand from a consumer behaviour perspective (Keller, 1993, p. 8). Therefore, scholars such as Washburn J proposed brand equity was the degree of brand knowledge effect on consumer to response the brand (Washburn J. et al., 2000). Moreover, the interaction of brand reputation, performance, meanings and relationship could be considered as an intangible asset, which added the value of an organization (Motion J. et al., 2001). Therefore, many studies follow up this concept which including the brand equity is “a set of brand assets and liabilities linked to a brand, its name and symbol, which provided value to the firm and its customers (Aaker, 1991, p. 15). As a result, Rao(1994) seen brand equity as the valuable assets of the brand name that could be considered that there is a potential of being extended either in a type of line extensions or in conjunction with any other brand names as cooperation branding (Rao and Ruekert,, 1994).
In Washburn J. et al. (2000) research of co-branding: brand equity and trial effects. In this study, the brands pairing with another brand caused impact on brand equity perceptions of constituent brands. They conclude that through combining with either a high or low equity brand improved the constituent brand's evaluation on brand equity. They further indicated that the allying of two high equity brands would benefit the co-brand with a highly positive image and through co-branding there would be a positive effect on consumer's perception of brand equity, regardless of whether the participants of the brand allying are the high or low equity brands. They also showed high equity brands would not be damaged by pairing with inferior equity brands thereby offering protection from poor co-branding decisions. Furthermore, they suggested dominant brands appear to be most resistant to negative information. The difficulties experienced by “master brands” which refer to the brands that are the leading brands of the product categories and tend to undertake the product line extensions. The brand equity of these brands is diluted if these line extensions leave too far from the original product category, (Leong et al., 1997). In addition, according to Swait et al. (1993) indicated from the general theory perspective, the brand equity of the original brand would cause positive impact on line extension to obtain the preference of consumers and channel members.
Washburn J. et al. (2000) suggested under some co-branding circumstances, a well-known brand name allies with one brand name whether it's well known or less in its own rights with the aim to benefit the inferior brand composite product. Moreover, they also claimed despite their initial equity perception, it would enhance the positive image to consumers by allying two different brands. Therefore, this would cause a positive impact on both two different partners the brand allied product and the brand equity of both two co-branding participants.