How do International Co-branding Alliances Affect Host Country Consumers’ Purchase Intention? An Abstract

Abstract

As markets are increasingly dynamic with a rising variety from which customers can choose (Murray et al. 2011), brand-building activities have become top priority of management (Fischer et al. 2010). Strategic alliances have been receiving attention in the international market since the beginning of the twentieth century (e.g., Harrigan 1986; Lorange and Roos 1992; Faulkner 1995; Mackay 2007). The frequency of using strategic alliance has increased steadily over the past centuries. Companies have to input considerable effort to ensure a successful alliance. Brand alliance has an extensive popularity among various types of strategic alliance options. It is defined as a strategy in which: “two brands are deliberately paired with one another in a marketing context such as in advertisements, products, product placements, and distribution outlets” (Grossman 1997: 191). Previous literature has mainly focused on how companies like to use the co-branding strategy (e.g., Cooke and Ryan 2000; Ueltschy and Laroche 2004), on the motives behind using co-branding strategy (e.g., Mowery 1988; Hagedoorn 1993; Khanna 1996) and on the advantages of using co-branding strategy (e.g., Bernard and Ruth 1998; Rao et al. 1999; Washburn and Richard 2002). However, the role that the host country plays on the consumers has been overlooked despite the fact that previous research has shown that host country environments have a major influence on consumer buying intention (Bian and Forsythe 2012). The “global market” is made up of about 200 countries. Each country has its own consumer behavior, customs, lifestyle, and economy (Mooij and Hofstede 2010). Lin and Chen (2006) claimed that the Country of Origin (COO) is one of the factors that could significantly affect the consumers’ purchase intentions. Research has shown that differences in national culture can disrupt consumers’ attitudes towards the brand (Moon et al. 2008; Raymond and McClure 2001). By considering the moderating influence of host country context, this article expects to refine and extend our current understanding of the effect co-branding alliances have on consumer intention. These findings can potentially benefit MNEs, especially for luxury MNEs, in terms of providing strategic guidelines for them when they choose to use co-branding alliance in the future.