Price volatility and brand alliance

Purpose This paper aims to explore how the price volatility of the brand ally determines whether the brand ally influences consumer evaluations of the focal brand in a brand alliance using associative memory network theory. Drawing on associative memory network theory, how the price volatility of a brand ally determines whether the brand ally influences consumer evaluations of the focal brand in a brand alliance is explored. Design/methodology/approach Three experiments (n = 1,442) examine how price volatility affects the ability of a well-known brand ally to influence the participants’ evaluation of an unknown focal brand. Dependent variables (perceived quality of the focal brand, attitude toward the focal brand) were measured. Findings In Study 1, the presence of a well-known brand ally increased consumers’ perceived quality evaluation of the unknown focal brand when the price volatility of the ally brand was low in magnitude, but not when it was high. Study 2 extended this observed effect by using different ranges of price volatility, different brand allies and a different product category. Study 3 tested process mediation, finding that the perceived quality of the focal brand positively influenced consumers’ attitudes toward the focal brand when the price volatility of the brand ally was low, but not when it was high. Originality A novel contribution is offered by integrating price volatility with the brand alliance literature. Drawing on associative memory network theory, this is one of the first to demonstrate how fluctuations in a well-known brand’s price can weaken or strengthen the brand alliance effect on consumer perceptions of an unknown focal brand. These findings extend the understanding of brand alliance dynamics and provide actionable insights for marketers managing brands in volatile pricing environments.