The Influence of Brand Acquisition on Perceived Authenticity: An Abstract
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Firms are increasingly engaging in acquisitions due to high competition. Acquisition as a strategy enables the firm to obtain technologies, products, distribution channels, and desirable market positions (Lee et al. 2011; Schweizer 2005). Acquisitions also have an effect on the brand being acquired. Prior research demonstrates that acquisition negatively affects the acquired brand’s culture (Rieley and Leahy 1998), is a means of talent acquisition (Galpin et al. 2012), and increases financial performance (Morgan and Rego 2009). An acquisition may also alter consumer perceptions of the acquired brand. In many cases, acquisitions involve large corporations buying out small start-up companies (Arikan and Stulz 2016). Though larger companies have the power to offer lower prices and higher efficiency, large corporations can be perceived to have a negative side riddled with perceptions of impersonality and commercialization (Kovács et al. 2013). These consumer perceptions of corporate commercialization may tarnish the acquired brand’s image, in particular its authenticity.
While many facets or types of brand authenticity exist, one type that is potentially affected by an acquisition is whether brand management is “true to self.” True-to-self brand authenticity is defined as the degree to which consumers perceive a brand’s management as intrinsically motivated about the products they produce (Moulard et al. 2016). Authentic brands are perceived as being led by passion-driven individuals motivated by the pure enjoyment of producing their craft rather than by the sole purpose of turning a profit. Smaller brands are likely perceived as highly authentic, especially if they are managed by the founder. A founder’s enduring management can increase a brand’s longitudinal consistency, or the perception that a brand has not changed since its inception. High longitudinal consistency has been shown to strengthen brand authenticity (Moulard et al. 2016).
The current research asks, what happens to perceived authenticity of smaller brands when larger companies acquire brands seen as discordant to the corporate image? The studies will examine how features of brand acquisition (acquired brand disclosure, acquiring firm size and brand manager preservation) affect brand authenticity. Theoretically, the piece contributes to a broader stream of brand authenticity literature by examining how the association of one brand can affect the perceived authenticity of another. Managerially, brand managers of larger companies can enhance post-acquisition marketing strategies by considering how consumers may perceive acquired brands originally recognized as authentic, as consumer perceptions about the brand’s authenticity may shift after an acquisition.