Customer perspectives on the acquisition of local artisanal companies

Abstract

Purpose

The purpose of this study is to provide insight into customers’ psychological processes and behavioral responses after merger and acquisition (M&A) of an artisanal brand.

Design/methodology/approach

Study 1 adopts a qualitative approach to understand how craft-beer customers perceive M&A decisions. In Study 2, a two-conditioned (M&A types: local and local company M&A vs local and national company M&A) between-subjects design experiment was executed.

Findings

The findings of this study show M&A’s of artisanal brands cause identity stigmatization, resulting in customers’ identity dissonance and coping strategies. Which coping strategies a customer uses depends on their brand identity, product-category identity and M&A partner types.

Research limitations/implications

This was an exploratory study that serves as a starting point for future research. Future research could investigate the model proposed in this study by testing the effects of potential moderators and mediators.

Practical implications

The findings of the study enable companies to better anticipate post-M&A customer behavior, thereby enabling them to enhance their brand positioning when a competitor is acquired by a large company.

Originality/value

The popularity of locally produced and craft hospitality products has attracted the attention of large companies that acquire artisanal brands. There is a paucity of research investigating post- M&A customer reactions of locally owned artisanal companies by large companies.

Citation

Legendre, T.S. and Bowen, J.T. (2020), "Customer perspectives on the acquisition of local artisanal companies", International Journal of Contemporary Hospitality Management, Vol. 32 No. 11, pp. 3601-3622. https://doi.org/10.1108/IJCHM-01-2020-0024