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

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.