Multiple brand alliances: a portfolio diversification perspective

Purpose – The paper attempts to examine the effect of multiple brand alliances using a portfolio diversification approach. Design/methodology/approach – The paper reports the findings of a four‐level, single factor design study in which 149 randomly assigned participants were exposed to a product concept description for a new product in conjunction with: no ally (control), one ally, three homogeneous allies, and three heterogeneous allies. Findings – Results support previous findings in the literature with regard to the effect of a single brand alliance. However, no support was found for the proposition that consumer evaluations of an unknown focal brand, when three well‐known heterogeneous allies are present, will be higher than when either one well‐known ally is present or three well‐known homogeneous allies are present. Research limitations/implications – Consistent with previous published research and despite diversifying the brand allies; it is impossible to conclude that multiple brand allies provide increased evaluations, relative to a single ally, for a previously unknown brand. More research is necessary regarding when and why multiple allies might be beneficial. Originality/value – As the use of multiple brand alliances proliferates in the marketplace, it is important to understand the effect of such strategies on consumers' evaluations. The paper contributes to this growing body of research by investigating the effect of multiple brand alliances using a portfolio diversification approach.