To read the full version of this content please select one of the options below:

Brand image strategy affects brand equity after M&A

Hsiang‐Ming Lee (Department of Business Administration and Institute of Business & Management, Ching Yun University, Jhongli City, Taiwan)
Ching‐Chi Lee (Jean Yves Enterprise Co. Ltd, Taipei City, Taiwan)
Cou‐Chen Wu (Department of Business Administration, National Taiwan University of Science and Technology, Taipei City, Taiwan)

European Journal of Marketing

ISSN: 0309-0566

Article publication date: 26 July 2011

Abstract

Purpose

The purpose of this study is to examine the relationship between the variance of two brand images and dimensions of brand equity after M&A, especially when the acquirer‐dominant is affiliated to a weak brand image and the acquired one has a stronger brand image.

Design/methodology/approach

In total, 409 responses were collected through random sampling from an internet survey platform in Taiwan (weak image differences were gathered from 209 respondents and strong image differences were gathered from 200 respondents).

Findings

This study uses an experimental design to discuss how the variance of two brand images (this study uses two kinds of M&A: a company with an inferior brand image acquires one with a superior or average brand image) affects the acquirer's brand equity (perceived quality, brand association, and brand loyalty). This study also examines how brand equity of an acquired brand changes after M&A. Results from the MANOVA and paired‐sample t‐test methods show that the greater the perceived differences between acquirers and acquired brands, the more the brand equity of the acquirer will increase. In addition, all the dimensions of brand equity for the brand with a superior image decrease significantly.

Originality/value

Few studies have evaluated the brand image effect of an M&A from a marketing perspective. The contribution is to help managers understand whether the acquirer should preserve the obtained brand and focus on increasing brand equity of the acquired brand to avoid the loss of customer loyalty.

Keywords

Citation

Lee, H., Lee, C. and Wu, C. (2011), "Brand image strategy affects brand equity after M&A", European Journal of Marketing, Vol. 45 No. 7/8, pp. 1091-1111. https://doi.org/10.1108/03090561111137624

Publisher

:

Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited