The role of brand equity and crisis type on corporate brand alliances in crises

Abstract

Co‐branding is regarded as a beneficial corporate branding strategy. Corporate crises can, however, result in one or both brands damaging customer‐firm relationships. Research evidence in the area is sparse and shows that the non‐culpable partner is negatively influenced by crises when perceived as being aware of the wrongdoing. Extending prior research, we investigate how brand equity of the non‐culpable partner shapes consumers' post‐crisis attitudes. We also examine boundary conditions to the brand equity effect. Drawing on expectancy violation theory, we show that high‐equity of the non‐culpable partner mitigates the negative effects of accidental crises, whilst low‐equity can mitigate preventable crises. In preventable crises, non‐culpable partner brands enjoying high equity suffer from negative attitudes accruing from the culpable brand in the alliance. The results suggest that managers should use corporate co‐branding with caution, carefully evaluating the partner brand's equity and its effects when planning for and managing crisis situations.