Examining consumer responses to cross-border brand acquisitions

Abstract

Purpose The purpose of this study is to investigate the effect of cross-border acquisitions on brand image dimensions (functional, symbolic and global image) of the acquirer brand from a consumer’s perspective. Design/methodology/approach The authors measured Chinese consumers’ perceptions of eight fictitious cross-border acquisition scenarios and tested the hypotheses by using multiple hierarchical regression. Findings First, the acquisition significantly improves functional, symbolic and global image of the acquirer brand. Second, both image perceptions of the acquirer and the acquired brands before acquisition significantly impact post-image of the acquirer. The effect is greater for pre-image of the acquirer (dominance effect). Finally, brand fit, product fit and country-of-origin fit influence attitude toward the acquisition significantly. Research limitations/implications There are limitations in the generalizations of the findings due to its reliance on a single country (China) and one industry (home appliances). Practical implications First, engaging in cross-border acquisitions significantly enhances the brand image of the acquirer brand. The global image has the largest improvement. Second, practitioners should carefully consider different levels of fit before the acquisition. Originality/value This study contributes to the extant literature by investigating brand acquisitions from the perspective of home country consumers (acquirer) and integrating multiple brand image dimensions and various levels of fit simultaneously.

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