Consumer Reactions to Brand Alliance Termination
Prof. Fangyuan CHEN
Associate Professor in Marketing
Date: 11 May 2023 (Thursday)
Time: 12:30pm -2:00 pm
Venue: E22 FBA Lobby
Abstract
In an increasingly competitive business world, managers understand that it is better to work together than to fight alone. As a result, brand alliances are common in the marketplace. However, brand alliances do not last forever. This leaves managers and consumer researchers with an important question: How will consumers react when brands terminate their alliances? Eight experiments found that consumers perceive an unilaterally initiated alliance termination to be more unfair then a mutually agreed termination; the perception of unfairness leads to negative consumer reaction to the initiator brand, leading to decreased brand evaluation, decreased brand choice, negative word-of-mouth, and withholding assistance. Importantly, consumers’ negative reactions to the initiator brand attenuate when the unilateral termination is deemed justifiable. These findings contribute to the literature on brand-brand relationships and the theory of brands as social agents. They also provide insights into how managers can communicate the termination of brand alliances to consumers to mitigate losses.
Short Bio
Prof. CHEN received her Ph.D. degree in Marketing from The Hong Kong University of Science and Technology. Prior to joining UM, she had worked as an Assistant Professor of Marketing at the Guanghua School of Management, Peking University, and the Hong Kong Polytechnic University. Prof. CHEN’s research focuses on understanding non-human marketing entities using human-based theories, and investigating ways to improve consumer psychological well-being. She has published papers in top-tier academic journals such as the Journal of Consumer Psychology, Journal of Consumer Research, Journal of Experimental Psychology: Applied, and Journal of the Association for Consumer Research.
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