Consumer perceptions of corporate brand alliances in crisis: an investigation of negative spill over effects

Quamina Osei-Tutu, La Toya (2017) Consumer perceptions of corporate brand alliances in crisis: an investigation of negative spill over effects. (PhD thesis), Kingston University, .


Brand alliance, or co-branding, is a strategic brand management strategy involving short-term and or long-term cooperative marketing activities between two or more individual brands. Research on brand alliances demonstrates that co-branding creates an interdependent relationship that is beneficial to the individual brands in the partnership. Although brand alliances represent a viable business opportunity for both brands, it is an inherently risky strategy. In a brand partnership, a negative event involving one brand can potentially spill over to the partner brand, as well to the co-branded product. There are several illustrations of the above in the industry - Ford was boycotted following Firestone's tyre recall crisis. Lego received negative publicity amidst Shell's controversial plans to drill in the Artic, and more recently Visa was drawn into the corruption scandal involving FIFA. Even though such controversies are increasingly common and create undesirable media attention for the brands in an alliance, knowledge on the risks associated with co-branding is sparse. The lack of knowledge is due to the paucity of empirical research in the area. The literature overlooks crises facing corporate brands in an alliance. Moreover, existing knowledge does not go beyond investigating the impact on negative events on consumers' attitudes toward the partner brands in an alliance. In particular, the literature is silent on how one partner's transgression can impact consumers' evaluations of the co-branding initiative jointly created by two corporate brands. Little is also known about the factors that could diminish negative spill over effects in co-branding crises. Aiming to address the above gaps in the literature, the thesis examines the impact of brand crises on consumers' evaluations of corporate brands in alliances. Consistent with a positivism philosophical orientation, the thesis draws on well-established theories in order to develop a set of research hypotheses. The overarching theoretical underpinning of the thesis is provided by Balance theory, well-established in the domain of social psychology. The theory elucidates how consumers' motivations for consistency influence their post-crises responses. The research is also informed by other theories emanating from social psychology. For instance, Negativity Effect explains that negativity looms larger than positivity, thus, consumers are liely to attach significant weight to negative brand information when evaluating a brand following a crisis. In addition, Attribution theory suggests that consumers will make inferences about crisis responsibility by evaluating available information about the crisis, and Social Judgement theory elucidates the bias underlying the way consumers are likely to process such information following a crisis. The thesis employs a quantitative research design to test the research hypotheses. For generalisability purposes, a scenario-based experiment was conducted across three brand crisis types - Accidental, Preventable and Victim. In a preventable crisis, the inappropriate actions of the corporate brand result in a breach of law, whereas in an accidental crisis, the unintentional actions of the corporate brand create a crisis. In a victim crisis, however, the organisation itself is also perceived as a victim of the crisis. The data were collected via a self-administered online questionnaire embedding three real-life crisis scenarios, representing each crisis type. Respondents were recruited from a reputed online consumer panel representative of the UK population. The research hypotheses were tested employing Analysis of Covariance (ANCOVA). Three phases of pre-testing (n=420) and a pilot study (n=83) established the ecological validity of the findings and the psychometric properties of the measures. In the main study, altogether 1,235 valid responses were obtained (Accidental context n=379; Preventable context n=422; Victim context n=414). The results show that brand crises in corporate brand alliances negatively impact consumers' attitudes toward the culpable brand which, in turn, spills over to the co-branded product. Attitudes toward the non-culpable brand, however, are not negatively affected by the crisis. The findings also suggest that spill over effects are contingent upon perceived attribution; that is, consumers who perceive the culpable brand as being responsible for the crisis (i.e. internal attribution) evaluate the culpable brand and the co-branding initiative more negatively that consumers who perceive the cause to be outside the brand's control (i.e. external attribution). The findings also suggest that consumers with a higher level of commitment to the culpable brand are less likely to make internal attributions. Finally, the thesis shows that consumers' post crisis attitudes toward the culpable brand and the co-branded product can be enhanced if they are exposed to recovery information that attempts to diminish the culpable brand's role in the crisis. The thesis offers a multi-domain understanding of consumer responses to corporate brand alliances in crisis. It extends knowledge in the domains of consumer behaviour, brand management, organisational crisis and social psychology. The thesis pushes the boundaries of knowledge by making three main theoretical contributions. First, it introduces a novel approach to understanding consumer motivations for processing information in brand alliances. Through the lens of Balance theory, the study shows that consumers' perceptions of alliances are contingent upon how the evaluation of each brand fits together. Second, drawing upon Attribution and Social Judgement theories, the study demonstrates the role of brand crisis attribution and brand commitment in explaining consumers' evaluations of crises in corporate bran alliances. Third, the thesis advances the understanding of negative spill over effects in brand alliances by providing empirical evidence that crises in corporate brand alliances lead to negative signals about the culpable partner brand which, in turn, spill over to the co-branded product. Further, the thesis informs managerial understanding of the risks associated with brand alliance strategies, and offers empirically-grounded recommendations for marketing practice. First, the thesis provides insights and useful benchmarks to marketers seeking to design effective brand communication strategies following a crisis. Second, it demonstrates that investing in brand commitment is crucial for mitigating the impact of a crisis. Third, it provides actionable guidelines to managers with regard to partner selection, and planning for occurrences of crises in corporate brand alliances. The thesis investigated consumer responses to corporate brand alliances, while accounting for the focal role of attribution. Several other variables that could influence the phenomenon under investigation are identified. For example, the severity of a crisis and the media's interest and coverage of a crisis might explain why perceptions and attitudes toward the alliance are altered following a crisis. Moreover, while the use of three crisis types enhance the generalisability of the thesis' findings, generalisations can be further enhanced by replicating the present research across different countries, products or service contexts. Further, the thesis employs cross-sectional data to investigate the impact of brand crises on consumers' perceptions of brand alliances. In the real world, however, brand crises can extend over a period. Future research could employ longitudinal data to investigate how consumers' post crisis perceptions of the culpable brand, the partner brand and the co-branded product, change over time. The above present fruitful avenues for further research.

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