A longitudinal examination of the effects of retailer–manufacturer brand alliances: The role of perceived fit

Abstract One resource that has been identified as a valuable source of competitive advantage is the equity associated with an organisation's brands. Organisations devote considerable resources to developing strategies that allow them to build and/or maintain strong brand names. This study investigates brand alliances between retailers and manufacturers. The role of perceived fit between the partnering brands is explored. In addition, the study examines the influence that retailer–manufacturer brand alliances have on: retailer equity; manufacturer brand equity; the intention of consumers to frequent the stores of the retailer involved in the brand alliance (shopping intention); and the intention of consumers to purchase products from the manufacturer involved in the brand alliance (purchase intention). Keywords: brand equityretailer equitybrand alliancesbrand managementbrand strategy Notes 1As one reviewer pointed out, some brand alliances may be driven by a corporate perspective. That is, the alliance may 'fit' from a financial, spatial, or survival point of view. However, when viewed from a consumer perspective, they do not seem to 'fit'. These alliances may be necessary for business reasons, even though the perceived fit is low. 2Similarly, in the main study, the respondents did not rate any of the brands as unfavourable. The pre-alliance brand equity for Wrangler is 4.16, while Polo/Ralph Lauren's is 4.78. The pre-alliance retailer equity for Kmart is 4.29, while Dillard's is 5.07. 3Additional brands (two retailers and two manufacturers) were included in the first survey to disguise the brands that would be used in the second questionnaire. 4To increase the response rate, potential respondents were told who was conducting the research and that they were professors from the local university. (Local citizens are very supportive of the university.) In addition, they were given the contact information of the professors conducting the research. (No one contacted the researchers.) 5In PLS analysis, the sample size should be at least equal to the larger of the following: (1) five times the number of indicators for the formative scale with the largest number of indicators or (2) five times the largest number of structural paths directed at any one construct in the structural model (Chin, Citation1998). In our study, since the equity indices are summates, the minimum sample size would be 10 (five times the largest number of structural paths directed at any one construct, which is two in the structural model). Therefore, our sample is adequate for the analyses. 6Note that the relationships in our model are positive associations. This means that as one construct increases (decreases) (e.g. attitude towards alliances), any constructs related to it will also increase (decrease) (e.g. retailer equity). Therefore, our analyses suggest that if consumers have negative attitudes towards an alliance, then the alliance may have detrimental effects on the equities of the brands involved and on the intentions of consumers. 7Although our results are consistent with this view, we do not test specifically for contextual factors. However, our results may be an indication that consumers are affected by the retail contextual factors even when not in direct contact with them.