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Is brand alliance always beneficial to firms?

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  • Yan, Ruiliang
  • Cao, Zixia

Abstract

In this research, we develop a fresh analytical model to examine the impact of brand quality on the firms’ performances when two firms selling substitute products form a brand alliance. Our results indicate that when two products have equal brand qualities, brand alliance is always a beneficial strategy for two firms to employ. However, when two products have different brand qualities, brand quality differential shows a positive relationship with the profit of the firm with the low-quality brand but demonstrates a negative relationship with the profit of the firm with the high-quality brand in the brand alliance. Our results also show that brand quality differential has a greater effect on the profit of the firm with the high-quality brand than on that of the firm with the low-quality brand. In addition, we find that brand alliance becomes much more valuable to the firm with the high-quality brand when the brand quality differential decreases, but the value of brand alliance has a concave relationship with the profit of the firm with the low-quality brand when the brand quality differential increases.

Suggested Citation

  • Yan, Ruiliang & Cao, Zixia, 2017. "Is brand alliance always beneficial to firms?," Journal of Retailing and Consumer Services, Elsevier, vol. 34(C), pages 193-200.
    • Handle: RePEc:eee:joreco:v:34:y:2017:i:c:p:193-200
    DOI: 10.1016/j.jretconser.2016.10.009
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    References listed on IDEAS

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    Cited by:

    1. Monika Monika & Ferdi Antonio, 2022. "How Superhero Characters Shape Brand Alliances and Leverage the Local Brand: The Evidence from Indonesia," Businesses, MDPI, vol. 2(1), pages 1-21, February.
    2. Casey E. Newmeyer & R. Venkatesh & Julie A. Ruth & Rabikar Chatterjee, 2018. "A typology of brand alliances and consumer awareness of brand alliance integration," Marketing Letters, Springer, vol. 29(3), pages 275-289, September.
    3. Zhang, Yicong & Guo, Xiaoling, 2023. "“New and old†: Consumer evaluations of co-branding between new brands and Chinese time-honored brands," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    4. Han, Jie & Wang, Desheng & Yang, Zhihao, 2023. "Acting like an interpersonal relationship: Cobrand anthropomorphism increases product evaluation and purchase intention," Journal of Business Research, Elsevier, vol. 167(C).
    5. Mitchell, Vincent Wayne & Balabanis, George, 2021. "The role of brand strength, type, image and product-category fit in retail brand collaborations," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    6. Paydas Turan, Ceyda, 2021. "What's inside matters: The impact of ingredient branding on consumers' purchasing behaviours in services," Journal of Retailing and Consumer Services, Elsevier, vol. 63(C).
    7. Yuan-Shen Shih, 2020. "Business Model Innovation and Evolution of Sporting Goods Industry: A Case of Anta Company," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 6(6), pages 300-311.

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