Examining the impact of co-branding service failures on consumer evaluations

Abstract

Researchers do not fully understand consumers’ responses to negative co-branding events; thus, they report inconsistent evidence regarding the negative impact on the partnering brands. Our research bridges a gap in this research stream, and answers an important question: When a service failure occurs, could the two different models of consumers’ brand schema change affect their negative perception of each brand partner? By using a theoretical and mathematical modeling approach, we offer two propositions. The first proposition shows that, under consumers’ book-keeping cognitive process, the negative spillover effect occurs for both brands. The second proposition argues that, when the sub-typing model is assumed, it is possible that one brand suffers while the other escapes the blame for the failure. To our knowledge, this is one of the first few studies to identify circumstances in which a negative spillover effect may or may not occur to brand partners in co-branding service failures.