Service alliances between unequals: the apple does not fall far from the better tree

Abstract

Purpose – Brand alliances take various forms, yet academic research has not investigated how value spillovers differ between partners. The purpose of this paper is to address psychological mechanisms to uncover consumers’ perceptions of a service alliance when a strong service brand partners with a weak one. Design/methodology/approach – An experiment used a 2 (perceived value of parent brand X: high vs low)×2 (perceived value of parent brand Y: high vs low)×2 (alliance contribution: equal vs unequal) full-factorial between-subjects design. Findings – Service alliance value is maximal when both parent brands have high perceived value but is lowest when both are of low perceived value. When their perceived value varies, the alliance value approximates the higher rather than the lower value parent. This effect increases with the relative size of a parent brand’s contribution to the alliance service. Alliances also enhance perceptions of the value of each parent brand. Practical implications – In an alliance between a strong and a weak service brand, the strong brand lifts the alliance, and consumers perceive high value. Companies should avoid service alliances with weaker brands that make major contributions. Originality/value – This study investigates how value spillovers vary across different forms of service alliances. Moreover most alliance research focusses on products while services (such as education) are more involved in alliances than ever.