Should I Stay or Should I Go? The Effect of Allied Brands Negative Publicity on Brand Managers' Decision-Making

Abstract

This study examines why, and under what conditions, managers of focal brands decide to maintain the alliance with the partner brand when the latter is involved in negative publicity. The literature on brand alliances demonstrates the presence of crisis spillover effects on each partner in the case of negative publicity, suggesting dropping the offending brand to avoid any bad associations related to the negative publicity. However, research evidence on such negative effects in the B2B context is scarce. Drawing on attribution theory and reasoning style, this paper shows through two experiments (Study 1, N = 100; Study 2, N = 160) how the high (vs. low) severity of the allied brand's negative publicity activates an internal causal attribution process, which leads managers of focal brands to drop the offending partner. However, when brand managers are characterized by an analytic (vs. holistic) reasoning style, this path is overturned. Adopting a managerial perspective regarding the implications of negative publicity for B2B relationships, this study provides new insights into how the severity of partner brand negative publicity influences managers' decision-making, via casual attribution. The paper thus offers managers actionable guidelines (i.e., enhancing the analytic reasoning style) to reduce the risk of terminating a profitable alliance.