Investigating Sustainable NGO–firm Partnerships: An Experimental Study of Consumer Perception of Co-Branded Products

Abstract

With crises like climate change and degradation of the earth’s natural habitats, human consumption needs to become more sustainable to decrease humanity’s environmental footprint. Fostering sustainable consumer behavior by enabling consumers to make an informed choice for sustainable products is vital in changing human consumption for the better. To optimize consumers’ perception of sustainable products, companies can establish partnerships with environmental non-governmental organizations (NGOs). In practice, retailers and NGOs can engage in NGO–firm co-branding of sustainable products. Yet, little is known about the impact of this NGO–firm co-branding on consumer perception. We fill this gap based on a 2 × 2 × 2 experimental study. We test consumers’ trust, product and brand perception of co-branded sustainable products. Our study finds that NGO–firm co-branding has a significant positive effect on all the above. The effect is moderated by familiarity with the co-branding partnership and consumer attitudes. We discuss how those NGO–firm partnerships can be a useful tool to guide customers to more sustainable consumption choices. The results are discussed in light of sustainability communication and cross-sector partnership theory. We offer important insights for consumer perspectives on sustainability communication, business engagement of NGO–firm partnerships and develop future research ideas for consumer behaviour.

1. Introduction

In light of severe environmental challenges such as climate change and eroding ecosystems, a more sustainable food consumption becomes increasingly important. Enabling consumers to choose more sustainable products by opening new communication channels to address these customers is an important step for a transformation to a sustainable mass-market [1]. Even though organic labels designed to assist consumers in identifying sustainable food products are getting increasingly popular, the majority of consumers still refrain from buying such products. One of the reasons can be a lack of consistent information about sustainable product aspects [2]. Research has highlighted the increased information need of consumers when purchasing sustainable products [3]. This increased information and explanation need results from information asymmetries that are typically high in sustainable products as sustainability attributes are often difficult to verify [4,5]. The information asymmetry decreases consumers’ expertise on sustainable products. This lack of expertise is correlated with a low level of consumer empowerment, which is vital for sustainable consumption choices in the long run [6].

Companies try to cope with the information-asymmetry challenge in multiple ways. In B2C markets, the use of sustainability labels is common to certify imperceptible product aspects [7]. However, as there are many labels, consumers struggle to notice and know about all of them, which can dilute the labels’ positive signaling effect [8]. Another approach recently established in consumer markets is that supermarket chains engage in retailer-brand-based communication in order to increase conscious consumer choices [2]. To counteract the skepticism of product-level information, which seems to decrease consumers’ trust in sustainability information [2], companies such as supermarket chains can engage in partnerships with trusted environmental NGOs [9]. Against the background of firm–firm co-branding has been identified as a quite successful way to strengthen the product appeal [10], some partnerships of NGOs and retail firms started the labeling scheme to co-brand organic products. While this is associated with new risks for both parties, such as a loss of credibility and legitimacy for the NGO, it also offers new advantages if the implementation is successful, like a strong brand strategy [11]. By tapping into the NGO’s credibility and transferring it to sustainable product characteristics, NGO–firm co-branding could offer marketeers new tools to positively affect consumer perceptions of sustainable products. So far, however, no empirical research has investigated this potential. Our quantitative study therefore aims to answer the question: How is NGO–firm co-branding perceived by the consumer?

In addressing this question, we make an important contribution to consumer perceptions of sustainable product communication (e.g., [2]). It is crucial to understand sustainable consumer perspectives to enable firms to offer consumers more suitable information on sustainable products and therefore enable them to change their consumption to a more sustainable way [12]. The overarching aim of our research here is to foster sustainable consumption by providing more quantitative information for researchers as well as firms who want to offer sustainable (food) products and have trouble communicating them. Our results show how partnering with an NGO can be a beneficial tool on various levels of consumer perception. Providing experimental data on the issue of NGO–firm partnership perception is crucial for market participants, who need to decide based on tested facts how to proceed in their business.

On the scientific level, we provide new insights into the variances of perception on the consumer’s side: Trust in sustainable claims, product and brand perception vary with familiarity and attitude towards the NGO in distinct ways. Consumers seem to make sense of NGO–firm partnerships in ways research could not predict before. Our paper offers important new insights on consumer perception logic. Since there are numerous theoretical studies in the field (e.g., [11]), we hope our results will add value to the discussion by bringing in novel quantitative results.

Moreover, with our research, we enable NGOs and firms to evaluate the concrete benefits of a potential NGO–firm co-branding partnership. Fostering more NGO–firm collaboration can lead to a broader range of sustainable consumer choices in the future.

Therefore, we answer in this paper the previously neglected question of how consumers perceive sustainable food products with a co-branding by an NGO and a company. In investigating the consumers’ perspective, we provide new insights into developing meaningful consumer communication of sustainable products and the perception of cross-sector sustainable partnerships.

To elaborate on this, the paper is structured in the following way: The next section reviews the literature on sustainability-related information asymmetries and the signaling effects of co-branding to derive our hypotheses about the influence of NGO–firm co-branding on consumer perceptions. In the methodology section, we present the experimental design and explain why we operationalize it in the retailer context. After the presentation of our results, we discuss our findings and limitations as well as derive implications for management practice and theory.

2. Theoretical Background and Hypotheses Development

2.1. Information Asymmetries

Purchase situations are typically affected by information asymmetries (e.g., Kirmani and Rao 2000) that, according to signaling theory [13], arise when one party holds more information than the other. Trade of sustainable goods is particularly vulnerable to those asymmetries [4,14] as sustainability-related product characteristics are often difficult to assess for buyers [15]. Because individual customers can hardly verify a product’s ecological and social features, such as organic farming or fair wages, sustainability characteristics are referred to as non-verifiable credence attributes [16].

Looking at the behavior of consumers, when facing information asymmetries, buyers apply certain heuristics such as observing peers or searching for quality signals [5]. To build trust among consumers, retailers of sustainable products thus need to communicate sustainability features in a credible and transparent way [7]. Product certifications issued by third parties, such as the United States Department of Agriculture (USDA) or European Union (EU) organic label, can provide credible quality signals making formerly non-verifiable credence features transparent [17]. However, in the context of sustainable product features, this is being complicated by growing numbers and variances in sustainable labels and increasing problems of greenwashing accusations against them [3].

2.2. Cross-Sector Partnerships for Sustainability

One way for companies to strengthen credibility and to create trust in sustainability efforts is to engage in cross-sector partnerships with NGOs engaged in the sustainability domain.

Such NGO–firm partnerships consist of two partners, an NGO and a firm, working together in short- or long-term cooperation, often focused on a specific topic such as sustainability [18]. NGO–firm cooperations can be built around general social or sustainable topics or focus on specifics like production standards in the clothing industry [19]. Commonly, the NGO has expertise in sustainability where the firm needs support [9]. NGO–firm partnerships can be beneficial as cooperation for both sides in terms of value creation [20], which is often related to the fit between both partners [21]. The NGO can lend their knowledge and resources on specific topics to the firm while profiting from the firm’s financial resources [22,23]. Furthermore, NGO–firm cooperations can influence consumer perception of the firm’s activities, although this research on consumer perception has yet been limited to social NGO causes like fair-trade products [24,25]. While former research has focused on the dualism between NGO and firm, more recent studies could show how boundaries between some partners blurred. This way, both partners can make use of market opportunities, but also face risks: the NGO fears a loss of credibility and the firm.

2.3. NGO–Firm Co-Branding, Branding Alliances

To affect consumer perception, NGO–firm partnerships can use the marketing strategy of co-branding in which, from the consumer’s point of view, the two partner brands appear as a common brand [26]. Co-branding has so far been studied mainly in the context of cooperating retail brands. Previous research indicates that co-branding has a positive effect on signaling unobservable product quality [27,28]. Thus, the firm can create financial benefits from the partnership by using it as a selling argument. On the other hand, co-branding creates competition for attention resources between the partnering brands [29]. We extend the literature on consumer perception of co-branding into the field of sustainability.

More and more NGO–firm partnerships leverage their cooperation for sustainability communication by showing NGO–firm co-branding labels on products. Those labeling schemes make use of the NGO’s credibility, but also increase the risk of greenwashing accusations [11]. If sustainable co-branding between NGOs and firms relies on the positive perception of the consumer when being presented with the NGO label in the purchasing situation. However, it is not fully understood how NGO–firm co-branding can be an effective method to assure consumers of the trustworthiness of sustainable product features and to promote a positive product and brand perception. We will present in the following how the three variables are so far known to be related to co-branding and suggest moderating variables like familiarity and attitude towards the partnering brands, which play a role in co-branding effects [24,27,30].

2.4. Trust in Sustainable Attributes via NGO–Firm Co-Branding

First, we hypothesize that sustainable products, especially consumer goods, could highly profit from co-branding of firms and sustainability-oriented NGOs in terms of creating trust in their products’ sustainability attributes, as well as leading to better product perception in general and a positive brand-spillover effect. Brand trust is known to be one of the most important factors related to market share [31]. Considering the sustainable product market, strong trust in sustainable attributes of products can translate into an intention to purchase the product [32,33].

Companies attempt to gain customer trust with sustainability certifications or labels. These are common methods to offer orientation to customers caring about sustainability. In the food industry, companies address the information need of the consumer by labeling their sustainable products with governmental or private certifications [34]. Yet, the ever-increasing number of labels in the sustainable food sector can cause confusion and uncertainty among customers [35] and, thus, limit the effects of such labels [8]. In this situation, NGO–firm co-branding can function as a lever to increase credibility in sustainability aspects for various reasons. NGO–firm co-branding is often implemented as single-issue labels, which can address overarching issues (e.g., organic production) for a whole product range. This simplified way to showcase, e.g., all organic products with one single-issue-label can be an effective instrument to reduce customer confusion [36]. This single-issue messaging is similar to the use of NGO–firm co-branding as the co-branding is not limited to only one product but is used for a whole range of products. This leads us to the assumption that such NGO–firm co-branding could also decrease consumer confusion. This is supported by findings of positive effects of co-brands for economic value creation of the cooperating firm where social NGOs and firms [24] or single-issue related projects and firms [26] cooperated.

Trust in sustainable product attributes plays a major role in cause-related marketing in the retail market, as it leads to brand loyalty and willingness to pay higher prices [30]. Even though information asymmetry is high, consumers may find retailers’ campaigns credible when they trust in the retailer itself [37]. One way to increase the trustworthiness of a firms’ sustainability claims or labels is getting verified by a third party [4,38], or an even more intense way is partnering with an NGO. Especially in cases where greenwashing accusations were made, NGOs can counteract and work as advocates for honest corporate sustainability [39]. Thus, the NGO can lend trustworthiness to a partnering firm when co-branding. This leads to the assumption that NGO–firm co-branding can increase trust in sustainable product attributes. We thus hypothesize:

Hypothesis 1a (H1a).

NGO–firm co-branding has a positive effect on consumer trust in a product’s sustainability attributes.

2.5. Product Perception in the Face of NGO–firm Co-Branding

Next to the aspect of trust in the sustainable attributes of the co-branded product, there are two additional aspects that we hypothesize to be directly influenced by NGO–firm co-branding: product and brand perception (see Section 2.6). When it comes to consumer perception of sustainable products, much has been done in the field of sustainability certification in the form of labels and how they facilitate consumer communication (e.g., [40]). On the one hand, sustainability certifications can positively influence not only trust in sustainability attributes but overall product perception as well [34,36]. On the other hand, product perception in general is influenced by firm–firm co-branding labels (e.g., [41]). First insights point to a general positive influence of NGO–firm cooperations on consumer behavioral responses [25], but this has not been tested for NGO–firm co-branding in detail. We bring those research strings together by testing the effect of sustainable NGO–firm co-branding on consumer perception. We, therefore, hypothesize that:

Hypothesis 1b (H1b).

NGO–firm co-branding has a positive effect on consumers’ product perception.

2.6. Spillover Effects of NGO–Firm Co-Branding Partners

What further effects may co-branding cause on consumers’ perceptions? Of main interest in co-branding research is the role of brands and consumer perception of brands [28]. In co-branding in the context of sustainability, where NGOs hold the expertise in sustainability topics, it is important to understand the effect of NGO–firm co-branding on the brand perception of the partnering retail firm as a primer for market potential [24,26].

One main focus of research regarding co-branding has been on the co-branding influencing consumer perception of brands due to spillover from one co-branding partner to the other [27]. This effect has been mostly investigated in negative scenarios, where scandals of one co-branding partner led to a downwards spiral of the reputation of both involved [42]. However, positive spillover effects can also help firms to grow brand equity [27]. Spillover is most recently defined as “a change in customers’ evaluation of one entity due to the evaluation of another entity” [43]. This change in evaluation through spillover can influence consumers’ buying behavior [25], therefore, we argue that co-branding between firms and NGOs can lead to spillover effects on consumer perception from the NGO to the firm. As firms typically partner with reputable NGOs, we assume that NGO–firm co-branding positively influences the brand perceptions of consumers, which is vital to estimate customers’ willingness to purchase the product or develop a high brand loyalty [24]. Thus, we pose the following hypothesis:

Hypothesis 1c (H1c).

NGO–firm co-branding has a positive effect on consumers’ brand perception of the firm.

The degree to which NGO–firm co-branding affects consumer perception arguably depends on how consumers perceive co-branding partners. We propose two main variables that influence the effect of co-branding on consumer perception: First, consumers can be more or less familiar with the NGO–firm co-branding, which we test in the second hypothesis (see Figure 1). Second, consumers might have diverging attitudes towards the NGO, influencing their view on the presented product, which we test in the third hypothesis (see Figure 1).

2.7. Familiarity with the Co-Branding NGO–Firm Partnership

To start with the first factor, there are several theories to explain consumer perceptions and reactions at the point of sale. Trust in sustainable attributes has been shown to correlate with the amount of information provided. The more specific a label is, the more credible it seems to be for conscientious customers [3]. With a lot of information competing on supermarket products, the enormous amount of information at the point of sale can lead to confusion and dilute the signaling effect of the individual information displayed on the product [8]. The effectiveness of signaling with labels (here: NGO–firm co-branding label) depends on the consumer’s knowledge of the presented signal [5].

In co-branding research, this has been formulated as the consumers’ familiarity with the label source that influences the effect of NGO–firm co-branding [27]. Familiarity refers to the number of product-related experiences accumulated by the consumer [44]. For our purpose, familiarity refers to whether consumers are already familiar with an NGO–firm partnership. Brand familiarity effects can be explained by frequency or exposure theory and are known to moderate the effectiveness of brand communication [45]. Familiarity with the brand has proven to be a significant influence on purchasing intention [46]. In the domain of sustainability marketing, familiarity may influence the perceived incongruity between statements and products [47]. Particularly with co-branding, familiarity plays an important role as a moderator [48]. In short, familiarity is important because it includes previous experiences and longer-term attitude formation into the picture. When consumers are already familiar with the NGO–firm co-branding—that is, when they know of the cooperation and may attach meaning to it—familiarity increases the effects of co-branding. We therefore posit,

Hypothesis 2 (H2).

The effects of NGO–firm co-branding are positively related to consumers’ familiarity with the underlying NGO–firm cooperation.

2.8. Attitude towards the NGO Partner

While co-branding holds the principal potential to create positive spillover effects between the involved brands, the literature emphasizes various factors that influence this outcome. To begin with, any positive spillover effects depend on the attitude that consumers hold towards the original brands [27]. As highlighted in the discussion regarding the importance of perceived fit in cause-related marketing [49,50], it matters with whom a firm collaborates in an NGO–firm partnership. This phenomenon is particularly relevant when the NGO acts as the partner whose contribution lies in increasing trust in sustainability claims. In this situation, the credibility and reputation of the NGO will impact how the NGO–firm co-branding translates into higher trust in sustainability attributes and affects product or brand perception. NGOs with higher degrees of reputation and trust can then be expected to be a more effective partners. We thus posit:

Hypothesis 3 (H3).

The effects of NGO–firm co-branding on consumer perception are positively related to consumers’ attitudes towards the NGO.

3. Materials and Methods

To test our hypotheses, we conducted an experimental study. For the operationalization of the co-branding and the retailers we used an existing co-branding case by an NGO and a retailer: The co-brand of the cooperation between the World Wide Fund for Nature (WWF) and the Edeka group (Germany’s retail firm with the highest turnover) which consists of the two supermarket chains Edeka (higher price class) and Netto (lower price class).

3.1. Data Collection, Sample, and Stimuli

We tested the effect of NGO–retailer co-branding on consumers’ trust in the sustainability attributes, perception of the retailer’s products and brands in a semi-experimental setting. We constructed the experiment using co-branding manipulation, the two different retailer brands, and two different products (sugar and coffee). We included more than one retailer and product to control for effects stemming from special retailer and product characteristics. This led to a 2 (NGO–firm co-branding: yes vs. no) × 2 (brand: low price retailer vs. high price retailer) × 2 (products: coffee vs. sugar) experimental design. As moderate carry-over effects are possible, the experiment was conducted as an in-between subject design [51]. Each product was tested with and without the co-branding label of the cooperation, leading to eight test groups. In a pre-test (N = 43), we successfully tested the effectiveness of the manipulation of our experimental design; 90% of the participants stated that they recognized an NGO–firm cooperation. Even more, all, but one, participants could recollect the WWF on the Edeka or Netto product.

We then developed an online questionnaire and collected data from November 2018 to March 2019. We carried out over 500 experiments, including a student sample and a more diverse online panel. Unusable questionnaires were sorted out due to time and validity restrictions (answering patterns). Furthermore, participants who stated that they never consume the product presented (coffee, sugar) were excluded from the sample because we intended to query actual buyers of these products. Our final sample yielded 385 questionnaires. With 57.9% female participants and 48.6% under the age of 31, we have a slight shift in this direction, probably because of the higher percentage of young female students in the student sample (see

Table 1. Sample characteristics.

Demographics	Percentage
Gender
Female	57.9
Male	42.1
Age
<31	48.6
31–59	34.3
>59	17.1
Household size
1	20.0
2	37.1
3	19.5
4	18.5
>4	4.9

Note: N = 385.

).

During the experiment, participants were informed about the study’s topic and were randomly assigned to one of eight different product displays shown after the introduction. Participants were then requested to answer questions about the variables used for this study. As stimuli, we chose two products to get generalizable results.

We designed product depictions based on existing products (see Appendix A, Figure A1). Mirroring these real-life products, all tested experimental products featured the EU-organic label and included a sustainability claim accompanying the NGO–firm co-branding (“Edeka/Netto are Partners for Sustainability”) to reflect the original in-market situation. To take care of potential method bias, the experiment was designed as a between-items experiment. All product presentations used the same original picture, only changed by the manipulations in the groups with co-branding: half of the participants were randomly assigned to a group where a product with NGO–firm co-branding-label was displayed. This co-branding label included the NGO logo and the sentence “Edeka [or Netto] and WWF are partners for sustainability.”, thus depicting precisely the same co-brand as used in the existing real-life Edeka/Netto-WWF-partnership. When the co-brand label was displayed, we additionally provided written information on the partnership as would be given on the co-branded product in a real shopping situation.

Additionally, participants were asked about the items in a balanced way: some important measures were asked directly after the product display, some much later. However, this might also have induced a bias due to the duration of the questionnaire, but this way, the study design focused on disguising the goal of the study from the participants by not presenting a row of closely related questions [52].

3.2. Measures

Wherever feasible, we used existing scales from literature and measured the items with validated scales. All scales were designed as a 7-point semantic Likert scale. To test participants’ trust in the sustainability claims of the displayed products, we measured the item trust in sustainability attributes of the product with a 2-item scale adapted from [53] (Cronbach’s α = 0.95). Product perception was measured using a 3-item scale to understand the effect co-branding might have on consumers’ perception of the product (Cronbach’s α = 0.95) [54]. We measured brand perception with a 1-item-scale adapted from Barone and Jewell [55], asking the participants about their opinion regarding the retail brand (in this case, Edeka and Netto). To distinguish between trust in the product attributes and in the shown labels, we separately tested trust in labels with a 7-point Likert scale [56]. As influencing factors for the formerly explained measures, we tested familiarity with the co-branding partnership (yes/no), the attitude towards the NGO (7-point Likert scale). As previous studies show that consumer perceptions strongly correlate with product involvement [57], we included this variable to increase the explanatory performance of our analysis and measured it with a 10-item scale [58,59].

3.3. Data Analysis

We estimated linear regression “OLS” models with co-branding as an independent variable and product perception, brand perception, and trust in sustainability attributes as dependent variables. The central independent variable differentiates between a group with co-branding and a group without. To test the hypotheses H2 and H3, we conducted subgroup analyses. The subgroup analysis was preferred over calculating moderation effects because splitting the overall sample into 8 experiment groups would result in two small samples. To this end, the variable co-branding was split up. For the test of H2, the co-branding variable was differentiated with regard to the familiarity with the cooperation. The same was done for the variable attitude towards the NGO for the test of H3. Consequently, we estimated two models for each dependent variable.

Since product involvement, brand (Netto or Edeka), as well as sociodemographic aspects, were reported to influence the consumption decision, they served as control variables. The following regression equation results:

$$Y={\mathsf{ß}}_0+co\_branding\ast {\mathsf{ß}}_1+prod\_inv\ast {\mathsf{ß}}_2+brand\ast {\mathsf{ß}}_3+socio\_demo\ast {\mathsf{ß}}_4$$

(1)

Y represents the dependent variables (trust in sustainability attributes, product and brand perception). They were measured on a scale from 1 to 7 and treated metrically. Although in a strict econometrical manner scales from 1 to 7 do not present metrical variables, they are treated metrically for more simplicity. This is supported by a subgroup analysis. ß₀ gives the constant of the models. Co-branding stands as the central independent variable for the three different categorical co-branding variables. The effect of product involvement is given by ß₁ (metric variable), the effect of the brand by ß₃ (dummy variable). ß₄ stands for the effects of different sociodemographic variables. A RESET test on non-linear relationships, structural breaks as well as homoscedasticity was conducted. For the models with the dependent variables brand perception and trust in sustainability attributes, a non-significance of the RESET test indicates no problems with the model specification. For the regression models with the dependent variable product perception, the significant value of the RESET test demonstrates a misspecification that could be localized as a non-linear effect of product involvement. The squared values of product involvement were included to fulfill RESET test requirements. The negative coefficient of the squared values of product involvement indicate that the effect of product involvement is lower for higher product involvement.

4. Results

We found strong results for the main effects of co-branding affecting trust in sustainability attributes, product perception, and brand perception, as well as for the moderating co-variates familiarity and attitude towards the NGO. We will present and discuss all statistically significant results in the following using regression models. It is important to keep in mind that in our experimental setting, brand refers to the supermarket retail brands that co-brand with the NGO.

4.1. Co-Branding Effects on Trust in Sustainability Attributes, Product Perception, and Brand Perception

The results implicate that NGO–firm co-branding in general (see

Table 2. Co-branding.

Dependent Variables	Trust in Sustainability Attributes	Product Perception	Brand Perception
Co-branding (reference: no co-branding)
Co-branding	0.267 *	0.187 *	0.284 *
Product involvement	0.305 ***	0.875 ***	0.204 ***
(Product involvement) 2		−0.050 **
Brand (Reference: Edeka)
Netto	−0.095	0.024	−0.861 ***
Controls	Yes	Yes	Yes
Constant	1.776 ***	−3.389 ***	3.679 ***
N	385	385	385
R2	0.265	0.446	0.242

Note: * p < 0.05, ** p < 0.01, *** p < 0.001.

) has a significant positive effect on trust in sustainable product features as well as on product and brand perception, giving evidence for H1a, b, and c. Participants confronted with a co-branded product evaluated trust in sustainability attributes on the 7-scale 0.267 * (* = p < 0.05) more positive than participants confronted with a non-co-branded product. The product perception turned out to be 0.187 * more positive for co-branding, with brand perception 0.284 * more positive.

Additionally, we see that product involvement was highly correlated to all dependent variables (p < 0.001), with the strongest effect of 0.875 *** on product perception. While this is not surprising, it underlines the stability of our dataset.

Furthermore, we see a strongly significant effect regarding brand category influencing brand perception (product shown as a house brand article of Edeka, which is a high price supermarket, or as a house brand of Netto, which is a low-price supermarket). The brand perception was seen more negatively when consumers were confronted with a Netto product (−0.861 ***).

4.2. Indirect Effects: Familiarity and Attitude towards the Co-Brand Partner Influencing Product and Brand Perception

H2 states that the effect of NGO–firm co-branding is positively related to familiarity with the NGO–firm co-branding: The effect of co-branding is believed to be higher for persons familiar with the NGO partnership.

The results of the OLS regression show that H2 can be supported for brand perception but must be rejected for the other variables. Persons who were familiar with the NGO–firm partnership perceived the co-branding as significantly positively (0.488 * on a 7-point Likert scale), while for persons who were not familiar with the NGO–firm partnership, there was no significant effect of co-branding on the brand perception (see

Table 3. Co-branding, Familiarity.

Dependent Variables	Trust in Sustainability Attributes	Product Perception	Brand Perception
Co-branding and familiarity (reference: No Co-branding)
Co-branding familiar	0.144	0.133	0.488 *
Co-branding not familiar	0.305 *	0.205 *	0.220
Product involvement	0.307 ***	0.881 ***	0.201 ***
(Product involvement) 2		−0.050 **
Brand (Reference: Edeka)
Netto	0.116	0.016	−0.866 ***
Controls	Yes	Yes	Yes
N	385	385	385
R2	0.266	0.446	0.245

Note: * p < 0.05, ** p < 0.01, *** p < 0.001.

). Interestingly, a complementary relation can be found for trust in sustainability attributes and product perception. Only for persons non-familiar with the NGO–firm partnership significant positive effects of co-branding on trust in sustainability attributes and product perception can be proven.

What is important to note, however, is that co-branding did not have a negative effect, irrespective of whether participants were familiar with the NGO–firm partnership or not.

H3 states that the effect of co-branding is positively related to the attitude of the consumer towards the brand partner. The attitude towards the NGO was evaluated on a 7-point Likert scale by the participants. Using a median split, the group with a more positive and a group with a less positive attitude were differentiated. We controlled for the intercorrelation of attitude towards the NGO and co-branding.

The regression analysis clearly supports H3 that the attitude towards the NGO positively moderates co-branding (see

Table 4. Co-branding and attitude towards NGO.

Dependent Variables	Trust in Sustainability Attributes	Product Perception	Brand Perception
Co-branding and perception of the NGO (reference: no co-branding)
Co-branding and more negative attitude tow. NGO	−0.517 ***	−0.004	−0.194
Co-branding and more positive attitude tow. NGO	0.439 **	0.312 ***	0.501 ***
Product involvement	0.289 ***	0.900 ***	0.196 ***
(Product involvement) 2		−0.05 **
Brand (Reference: Edeka)
Netto	−0.100	0.028	−0.857 ***
Controls	Yes	Yes	Yes
Constant	2.427 ***	−3.330 ***	4.040 ***
N	385	385	385
R2	0.315	0.453	0.264

Note: ** p < 0.01, *** p < 0.001.

). The strongest effects apply for trust in sustainability attitudes: a less positive attitude towards the NGO leads to a highly significant (***) negative effect of the NGO–firm co-branding (–0.517, p < 0.001). For a positive attitude towards the NGO, the co-branding effect is always strongly positive on all dependent variables.

4.3. Control Variables

We controlled for demographic variables, but they did not have any statistically significant influence. Control variables were included in all models and supported model strengths. According to previous studies (e.g., [57]), product involvement was correlated highly positively with all three dependent variables. Our findings regarding product involvement are in line with that. We found product perception was highly influenced by product involvement leading to a higher R2 and thereby a better explanatory performance of the models. Due to the correlation between co-branding and product involvement the results of product involvement as a moderating variable needs to be interpreted with caution (see Appendix A,

Table A1. Co-branding and product involvement.

Dependent Variables	Trust in Sustainability Attributes	Product Perception	Brand Perception
Co-branding and product involvement (reference: no co-branding)
Co-branding and low product involvement	0.303 *	0.108	0.373 *
Co-branding and high product involvement	0.228	0.270 **	0.190
Product involvement	0.298 ***	0.789 ***	0.188 ***
(Product involvement) 2		–0.039
Brand (Reference: Edeka)
Netto	–0.092	0.020	−0.854 ***
Controls	Yes	Yes	Yes
Constant	1.811 ***	–3.243 ***	3.764 ***
N	385	385	385
R2	0.265	0.446	0.243

Note: * p < 0.05, ** p < 0.01, *** p < 0.001.

, Figure A2). That is way we used product involvement as a control variable but did not include it as a moderator.

We tested attitudes towards sustainability using a categorical split and could not find reliable evidence that there is a correlation between attitude towards sustainability and the effect of NGO–firm co-branding. Furthermore, we found a minor correlation (correlation coefficient, p < 0.1, results see Appendix A

Table A2. Correlation product involvement and attitudes towards sustainability.

Product Involvement	Coefficient	p-Value
Attitude towards sustainability	0.101	0.054

) between product involvement and attitude towards sustainability leading to a multicollinearity problem. We thus did not pursue a further analysis. A binary variable on supermarket brand influence was built and tested, but no significant effect of the retailer onto the co-branding effect, and thus of the cooperating brand, was detected.

In general, our models reached explanatory strength, presented in R² ranging from 0.242 to 0.453. Since we look at a very complex perception situation of real-life products, we have several influences that we cannot control, mixing up our results. The regression models do not aim to capture all factors relevant to the very complex perception situations of real-life products, but rather measure the specific effects of co-branding. Related studies of consumer perception and trust show R² under 0.3 [38]. Therefore, we assume that the models presented fit to our hypotheses but are limited in explanatory strength regarding the complex constellation of consumer perception as a whole.

5. Discussion

Our results provide valuable contributions to the academic discussion as they support some established assumptions on the one hand but also challenge others. In the following, we will discuss our findings and derive implications for firms, consumer affairs, and research. We found interesting partly-statistically significant results regarding the tested variables, with some more rigorous results than for others (see

Table 5. Co-branding and dependent variables as an overview.

Dependent Variables	Trust in Sustainability Attributes	Product Perception	Brand Perception
Co-branding (reference: no co-branding)
Co-branding	0.267 *	0.187 *	0.284 *
Product involvement	0.305 ***	0.875 ***	0.204 ***
Co-branding familiar	0.144	0.133	0.488 *
Co-branding not familiar	0.305 *	0.205 *	0.220
Co-branding and more positive attitude towards NGO	0.439 **	0.312 ***	0.501 ***
Co-branding and more negative attitude towards NGO	−0.517 ***	−0.004	−0.194
N	385	385	385

Note: * p < 0.05, ** p < 0.01, *** p < 0.001.

).

5.1. Direct Effects of NGO–Firm Co-Branding onto the Dependent Variables

Returning to the beginning, our results indeed show NGO–firm co-branded products can be effective tools to reduce consumer confusion at the point of sale and foster sustainable consumption behavior. In particular, NGO–firm co-branding can help consumers to identify sustainable product attributes of firms as more trustworthy. Consumers are supported in their consumption choice to identify high-quality products and brands. One possible explanation for this is that NGOs counteract greenwashing [35]. In our perspective, consumers are enabled to make a sustainable choice when given trustworthy information as NGO–firm co-branding does. Thus, this can be one way to strengthen consumer empowerment [6]. We find that NGO–firm co-branding has a significantly positive effect on trust in sustainability attributes, product and brand perception.

This positive influence bears important implications for practitioners. First, this result indicates that NGOs can benefit from this form of co-branding by fostering sustainable consumption through improved consumer trust in sustainability attributes. Second, the NGO–firm partnership can create value for the retailer, both in a more direct way through improved product perception of the co-branded product, and in a more indirect way by improving how consumers perceive the retailers’ brand. Third, customers benefit from the simplified identification of sustainable products in the market. The result supports our assumptions that the effect of NGO–firm co-branding is comparable to single-issue labels or firm-firm co-branding for which similar positive effects were observed (e.g., [26,27,36]. On a theoretical level, we can substantiate the value-creation benefits of NGO–firm partnerships in various ways which were not yet discussed in the light of consumer perception [23] or in the field of ecological sustainability co-branding [24]. In this way, our findings connect cross-sector partnership research with sustainable marketing challenges and foster the development of effective communication to the consumer (e.g., [40]).

Considering the strength of the effects, our results show that NGO–firm co-branding has the strongest effect on consumer perception of the firm brand (0.284 * on a 7-point Likert scale) followed by trust in sustainability attributes (0.267 *) (see Table 2). Supermarket store-brands could therefore highly profit from the spillover effect [27] of a positively perceived NGO to product and brand perception as well as to trust in sustainable product attributes. The observations regarding the spillover effect become even more interesting when considering the moderating factors discussed below.

5.2. Moderating Variables of Familiarity

We found slightly counterintuitive results for the moderating effect of familiarity (see Table 3, Figure 2). First of all, since our findings suggest that NGO–firm co-branding has a strongly positive effect on all three dependent variables, the differences in the results represent variations in effect size and significance, not differences in effect direction. The moderation effects of familiarity and attitude towards the NGO on product perception and trust in sustainability characteristics on the one hand and brand perception, on the other hand, showed strongly significant effects but in different directions. Brand perception is significantly and stronger positively affected by familiarity, while the other two variables (trust in sustainability attributes and product perception) are rated significantly higher by persons receiving the NGO–firm co-branding but who were not familiar with the cooperation. Our findings thus suggest that consumers who were familiar with the NGO–firm co-brand attributed the positive effect of NGO–firm co-branding onto the brand (0.488 *), while consumers who were not familiar with the NGO–firm co-brand perceived the product significantly better (0.205 *) (see Figure 2). What could be an explanation for this?

We argue that two factors could play a role here: Spillover effects and signal strengths. Spillover effects can be reciprocal or one-directional when two organizations co-brand [43]. In our case, we analyzed one-directional effects from the co-brand [6] onto the retail brand. Consumers familiar with the NGO cooperation are possibly under the main influence of spillover effects, in the marketing context often discussed as halo-effects [60], as they are highly moderated by familiarity [48]. Our results suggest that customers’ positive impression of the NGO–firm co-branding was transmitted to the accompanying store brand.

In particular, our findings of NGO–firm co-branding significantly increasing brand perception when consumers are familiar with the NGO–firm co-branding underline co-branding with well-known NGOs as a potential way to develop a successful brand image. Secondly, it seems to be important that not just the NGO is well known, but the communication of the cooperation is managed well and in an intensive way to assure that not just the NGO is known, but the NGO–firm cooperation as well. On a theoretical level, this indicates that NGO–firm co-branding functions as one-directional co-branding in terms of spillover [43]. In future research, it would be fruitful to investigate if spillover effects from the NGO–firm co-branding into trust in sustainability attributes and product perception occur in samples with higher N in future research.

5.3. Signaling Strength of NGO–Firm Co-Brand

But what happens when people are unfamiliar with the partnership but their trust in sustainability attributes and product perception is still significantly positively influenced by NGO–firm co-branding? In fact, in our findings, the NGO–firm co-branding signal leads to a significantly higher trust in sustainability attributes (0.305 *) and product perception (0.205 *) when consumers were not familiar with the existence of the co-branding partnership. In this case, spillover effects may play just a minor role. Here, we see the signaling strength of the NGO–firm co-brand as the most fitting explanation. When consumers are unfamiliar with the NGO–firm co-branding, the co-branding on the product can function as a sustainability label, most prominently influencing consumers’ product perception and trust [3,38]. Following these findings, companies take on just minor risks if they are unsure about the unfamiliarity of their customers regarding the NGO partnership. Even though the partnership is not familiar, consumers tend to rate the trust in the sustainable product attributes and the product in general higher with NGO–firm co-branding. This is in line with findings on assuring mechanisms of NGOs and third-party certifications of sustainable goods [38].

5.4. The Moderating Effect of Familiarity in Dependence of NGO Perception

Another possible explanation for our diverging results on trust and product perception on the one side and brand perception on the other side (see Figure 3) is that consumers familiar with the NGO cooperation have a different opinion about the NGO. This may result from them being better informed or even more critical than consumers previously not familiar with the NGO–firm co-branding. We tested the correlation of WWF perception between customers who were “familiar” or “unfamiliar” with the existing partnership and found a significant difference (0.468 **) (see

Table 6. T-Test on the perception of the WWF by the familiarity of the cooperation with Edeka.

	Perception of the WWF on a 7-Point Likert Scale (1 = Very Negative, 7 = Very Positive)
Cooperation is familiar	5.299
Cooperation is not familiar	5.767
Difference	0.468 **

Note: ** p < 0.01.

). If the NGO–firm co-branding is familiar, the WWF perception is significantly less positive. This leads to the conclusion that consumers familiar with the cooperation show fewer positive views on the NGO, which might lead to a less positive rating of the product and the trust in sustainability. Thus, their personal attitude towards the NGO partner seems to moderate the effect of familiarity. However, this interpretation of the results is limited by the small effect size difference between attitudes towards the WWF in familiar vs. unfamiliar consumers (5.299 vs. 5.767 on a 7-point Likert scale).

According to these findings, not just popular NGOs are attractive partners, but NGOs with high reputations among consumers. Thus, our results suggest that it is beneficial to test the knowledge and attitude towards the NGOs for the firms’ customer group if companies consider partnering with an NGO for sustainable projects. This is in line with findings on co-branding between two firms [27,42], adding the new perspective on the co-branding of NGOs and firms for sustainable products.

5.5. Moderating Effect of Attitude towards the NGO

One factor which turned out to positively influence the perception of all three tested variables is attitude towards the NGO (see Figure 1). The moderating effect we found is mainly in line with the general positive effect of NGO–firm co-branding on trust in sustainability attributes, product, and brand perception (see Table 4). When consumers think more positively of the NGO partner, the positive effect of co-branding is significantly amplified (see Table 4). On the other hand, when consumers have a more negative opinion about the NGO, co-branding actually results in a significantly negative effect on consumer perception, yet only for trust in sustainability attributes while no such effects occur for product and brand perception (see Figure 3).

This finding contributes to the debate about organizational fit in cross-sector partnerships [21]. One important success factor for co-branding is whether the partnering brand (here: the NGO) contributes the specific credibility needed to extend the brand in the desired dimension [61]. A more favorable brand position can then be achieved when one partner has a high reputation in the new field. Our findings concerning the strong influence of attitudes towards the NGO on the main expertise-related variable trust in sustainability attributes corroborate this claim. Expanding the literature, however, our findings suggest that sustainability fit can be interpreted in terms of Herzberg’s 2-factor as a satisfier regarding product and brand perception [62]: while consumers carry over their positive attitudes towards the NGO to the product and brand, they do not carry over their more negative attitudes towards the NGO to the product and brand.

In terms of management implications, our findings indicate that firms can highly benefit from choosing an NGO partner with a credible issue fit. At the same time, the risk of a non-optimal issue fit for product and brand perception is low.

6. Limitation, Future Research, and Implications

Our work faces limitations, providing options for future research. Generally, online questionnaires differ drastically from on-site experiments. In point-of-sale situations, many more factors could influence consumer choice. Consumers’ perception of NGO–co-brand labels may be much better understood in practice. For future research, we therefore highly recommend repeating our experiment by conducting an on-site experiment [63]. Similarly, as our tested products turned out to show little difference in terms of product involvement, further research could test products with high involvement variance [3]. In addition, given the limited sample size of this study, larger N investigations could address sample-size-related limitations.

Extending the literature of consumer perception of co-branding by showing that NGO–firm co-branding affects trust in sustainable product features, product and brand perception is a crucial step to underline the market advantages of NGO cooperations for firms. With regard to further research, the NGO partnership literature could find fruitful insights in our work by adding the consumer perception perspective of NGO–firm co-branding to the discussion about the organizational fit of NGOs [21,64]. Regarding co-branding, we encourage scholarship into consumer affairs to further investigate consumer perception of sustainable product communication in a comparative manner between different types of labels (e.g., third-party certifications vs. NGO–firm co-branding) [2,38].

With our study, we contribute to a better understanding of how green consumer perception influences antecedents for green purchasing behavior [65] and, by this, increase the possibility for informed consumer choices towards sustainable consumption [6]. We highlight two possibilities to improve green consumption with NGO–firm co-branding: On the one hand, NGOs can increase positive product perception and trust and, thus, also the purchase-likelihood of sustainable products [30] when partnering with a retailer. This supports NGOs’ overall goals of fostering sustainability. Yet, future research should address whether this is the main priority of NGOs in partnering with a firm. Our findings show how NGO–firm cooperations can create value by co-branding retail products, but it is not yet analyzed which other goals (next to economic goals) might be reached by NGO–firm co-branding. On the other hand, firms are well-advised to include consumers’ attitude towards the NGO into their decision for a co-brand partner, as familiarity and attitude towards the NGO play a major role in the success of the firms’ co-branded products. By partnering with an NGO, firms can not only benefit in general by creating value [20] but, as our research shows, benefit very concretely from the increased trust in their sustainable product attributes, better product and brand perception. Last but not least, companies can thus fulfill their responsibility as part of society in promoting sustainable consumption by partnering with a sustainable NGO.