Heartbreakers must be punished! Consumer reaction toward brand alliance termination

Abstract

Although brand alliances have gained popularity in the real world, they are often short-lived, which necessitates research on understanding how consumers view brand alliance termination and react to the brands involved accordingly. This research examines how consumers react when a brand alliance ends. Through nine experiments, including two supplementary studies, we demonstrate that consumers perceive alliance terminations as less fair when they are initiated by one party unilaterally, compared to when they are mutually terminated by both parties. The reduced fairness perception triggers anger toward the brand that initiated the unilateral termination, leading to negative reactions from consumers such as decreased brand evaluation, increased brand avoidance tendency, a reluctance to provide support, and reduced brand choice. Importantly, we identify three key moderators that mitigate these negative reactions: justifiability of the unilateral termination, initiator-recipient size difference, and monetary compensation for terminating the alliance. Our research carries critical theoretical and managerial implications.