Leveraging brand equity in business-to-business mergers and acquisitions


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Every acquisition provokes a branding decision—should the acquirer absorb the acquired business by renaming it
under its ownname to convey to themarket thatownership and theway of doing business has changed, or should
it allow the acquired company to continue trading under its old name so as to avoid damage to its existing
customer franchise? This is a complex management decision but one which apparently receives little attention.
This paper draws on the B2B branding andM&A literatures to create a model of brand equity transfer. The model
assumes that rebranding of an acquired company under the name of the newparent can yield positive benefits if
the new parent has higher brand equity than the acquired company. A case study of an acquisition of a national
construction materials company by a larger international group provides an illustration of the transfer process.

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Leveraging brand equity in business-to-business mergers and acquisitions

  1. 1. ARTICLE IN PRESSIMM-06473; No of Pages 6 Industrial Marketing Management xxx (2010) xxx–xxx Contents lists available at ScienceDirect Industrial Marketing ManagementLeveraging brand equity in business-to-business mergers and acquisitionsMary C. Lambkin a, Laurent Muzellec b,⁎a UCD Michael Smurfit Graduate Business School University College Dublin, Carysfort Avenue, Blackrock, Co. Dublin, Irelandb Dublin City University Business School, Glasnevin, Dublin 9, Irelanda r t i c l e i n f o a b s t r a c tArticle history: Every acquisition provokes a branding decision—should the acquirer absorb the acquired business by renaming itReceived 31 October 2008 under its own name to convey to the market that ownership and the way of doing business has changed, or shouldReceived in revised form 27 November 2009 it allow the acquired company to continue trading under its old name so as to avoid damage to its existingAccepted 11 December 2009 customer franchise? This is a complex management decision but one which apparently receives little attention.Available online xxxx This paper draws on the B2B branding and M&A literatures to create a model of brand equity transfer. The modelKeywords: assumes that rebranding of an acquired company under the name of the new parent can yield positive benefits ifB2B branding the new parent has higher brand equity than the acquired company. A case study of an acquisition of a nationalMergers and acquisitions construction materials company by a larger international group provides an illustration of the transfer process.Rebranding © 2010 Elsevier Inc. All rights reserved.Brand equity1. Introduction involved in M&A transactions should be subject to a kind of brand equity leveraging whereby a deliberate attempt is made to transfer Merger and acquisition (M&A) activity has increased exponentially the brand equity of the stronger partner to the weaker one, therebyover the last decade (Martynova and Renneboog, 2007; Hijzen et al., adding value to the whole, combined entity.2008). This wave of M&A activity has been a global phenomenon that The issues involved in the brand equity transfer process havehas particularly affected industrial markets (Andrade et al., 2001; received some attention in the B2C sector (Jaju et al., 2006; Muzellec &PriceWaterhouseCooper, 2007). The net effect for the individual Lambkin, 2008), but it is yet to receive any exploration in a B2Bcompanies involved in all of these M&A deals has been the accumulation context. This paper addresses this gap by focusing on the issue ofof products, brands and locations with widely varying heritages and brand equity transfer following mergers and acquisitions among B2Bdiffering levels of value. This runs the risk of a dilution in the coherence firms. It starts by reviewing research on brand equity in industrialof the original brand portfolio which sometimes reaches a point where a markets and links it with the literature on M&A. It then proposes arebranding of all or some elements of the brand hierarchy becomes a model of brand equity transfer. A case study based on a large, inter-managerial necessity (Muzellec & Lambkin, 2006). national construction materials firm which acquired a relatively small, A review of the available evidence suggests, however, that brand national firm is used to identify which brand equity variables may beequity is typically not handled very well, tending to be treated as an successfully transferred in a situation where a dominant acquirerafter-thought compared to more pressing financial and operational brand is applied to the weaker acquired firm.matters (Hise, 1991; Kumar & Blomqvist, 2004; Homburg & Bucerius,2005). It is usually given low priority in merger negotiations and istypically decided on the basis of simple expediency after the deal is 2. Leveraging brand equity in B2B marketsconcluded, to bring some order to the untidy collections of names andentities that are inherited as a result of combining two firms and their Companies will likely differ in the levels of brand equity that theyrespective products and markets (Knudsen et al., 1997; Ettenson & bring to a merger (Capron & Hulland, 1999; Bahadir, Bharadwaj &Knowles, 2006). Srivastava, 2008). The most typical situation is one in which a large, Ideally, however, branding decisions should be driven by market- strong firm acquires a smaller, weaker one with the expectation that theing considerations, to use the opportunity to signal a new strategic performance of the acquired firm can be improved by an infusion offocus to the companys stakeholders and to extract synergies from the skills and resources from the acquirer, thereby providing a gain for thebrand equities of the merged entities. In particular, branding decisions combined entity (Capron & Hulland, 1999; Andrade et al., 2001; Bahadir et al., 2008).The challenge of managing brand equity in the context of ⁎ Corresponding author. M&A is to be able to identify and measure the differences in the brand E-mail addresses: Mary.Lambkin@ucd.ie (M.C. Lambkin), Laurent.Muzellec@dcu.ie equity of the individual firms before the transaction, and to find a way to(L. Muzellec). transfer the brand equity from the stronger to the weaker firm after the0019-8501/$ – see front matter © 2010 Elsevier Inc. All rights reserved.doi:10.1016/j.indmarman.2010.02.020 Please cite this article as: Lambkin, M.C., & Muzellec, L., Leveraging brand equity in business-to-business mergers and acquisitions, Industrial Marketing Management (2010), doi:10.1016/j.indmarman.2010.02.020
  2. 2. ARTICLE IN PRESS2 M.C. Lambkin, L. Muzellec / Industrial Marketing Management xxx (2010) xxx–xxxdeal is concluded. The next section considers how brand equity may be the weaker party so as to achieve a positive synergy for the wholeidentified, measured and transferred in B2B mergers and acquisitions. combined entity.2.1. Identifying and measuring brand equity in B2B markets 2.3. Brand equity redeployment model Almost all conceptualizations of brand equity agree that it involves Existing research on post-merger behaviour and performance comesthe ‘value added to a product by consumers associations and from several different disciplines making it quite difficult to develop aperceptions of a particular brand name (Aaker, 1991; Bendixen et al., coherent picture of the current state of knowledge. Economists tend to2004, Keller, 1993). Whilst the ‘added value’ of brand equity is viewed in consider structural factors such as relative firm size and the relatednessdiffering ways, there seems to be a general agreement among all of the merged businesses as key variables likely to influence the patternresearchers that brand equity outcomes accrue to a product due to the of resource deployment, the realisation of synergies, and post-merger/set of associations symbolized by its brand name when compared with acquisition performance (Andrade et al., 2001; Kaplan, 2006). Manage-those that would accrue if the same product did not have that brand ment and organisation scholars tend to focus on the speed andname (Keller, 2008). effectiveness of the post-acquisition integration process, including the The most widely accepted brand equity model in the literature is impact on the employees in the merged organisation (Haspeslagh &Kellers customer-based brand equity (CBBE) model (1993; 2008). Jemison, 1991; Hitt, Harrison, Ireland & Best, 1998; Krishnan, Hitt & Park,Brand equity has two key components: a high level of awareness and 2007).strong, favourable and unique brand associations (Keller, 1993). A The limited work by marketing researchers on the subject of M&ACBBE model for business markets, which focuses on the corporate has tended to focus on the pattern of marketing resource deploymentbrand as the unit of analysis has been adapted by Kuhn et al. (2008). following an acquisition (Capron & Hulland, 1999; Homburg & Bucerius, The corporate brand is emphasized for B2B companies because 2005), and on how customers and consumers might react to the newbusiness customers tend to assess, value, and make purchasing decisions ownership, specifically, whether the result may be a gain or loss inbased on company-specific images/perceptions (Aspara & Tikkanen, loyalty, as measured by attitude or behaviour (Jaju et al., 2008).2008). The choice of a single corporate brand is also thought to reflect a In a large study of M&A transactions over 30 years in the Unitedcustomer emphasis on risk-reduction rather than on emotional benefits, States, Andrade et al. (2001) found that the acquirers were 10 timesleading them to choose well known brands from reputable companies as a larger than their targets, on average. This suggests a scenario in whichrisk reduction strategy (Mudambi, 2002; Beverland et al., 2007; Cretu & large, strong firms acquire smaller weaker ones to expand their businessBrodie, 2007). and to exploit synergies in the combined entity (Capron & Hulland, In a corporate brand dominant system, the constructs of brand 1999; Basu, 2006). In those situations Capron and Holland (1999) foundassociations and corporate reputation are intertwined (Argenti & that redeployment of resources tends to be asymmetrical, with a highDruckenmiller, 2004; Balmer & Greyser, 2006; Olins, 2000). However, proportion of redeployment from acquirers to targets but very little insince reputation is an aggregate construct with many components the opposite direction. This sample of firms frequently redeployed(Cravens, Oliver & Ramamoorti, 2003; Fombrun, Gardberg & Sever, innovation, manufacturing, brand name and marketing resources from2000), it is useful to identify the key variables involved in the brand acquirers to targets.equity transfer process in business markets. The general tendency in M&A therefore seems to be that a strong The challenge of managing brand equity in the context of M&A is to firm acquires a weaker one and seeks to leverage its strength tobe able to identify and measure the differences in the brand equity of enhance the value of the target, and thereby the value of the wholethe individual firms before the transaction, and to find a way to combined entity. Translating this into the context of brand equitytransfer brand equity from one firm to the other.. transfer, we can surmise that the likelihood of rebranding the target firm with the brand name of the acquirer would also be inversely2.2. Brand equity transfer in B2B mergers and acquisitions correlated with relative size and strength as shown in Fig. 1 below. Thus, we would expect a transfer of brand equity from acquirer to Assuming that individual companies have different scores on the target to be high for relatively small, weak targets and low forbrand equity measurement model at any point in time, then the relatively large, strong targets.likelihood is that merging companies will differ in the levels of brandequity that they bring to the merger (Capron & Hulland, 1999; Bahadir 2.4. Implementation issueset al., 2008). For example, in a study of large M&A transactions in theUnited States, Bahadir et al. (2008) found a very wide range of variation It is widely recognised that many M&As fail because they payin brand value, from 49% of firm value at one end of the spectrum (in the inadequate attention to “soft” issues such as vision and leadership,case of P&Gs acquisition of Gillette), to less than 1.51% in the acquisitionof Latitude by Cisco Systems. The source of heterogeneity in the target firms brand value may bedue to the fact that each brand involved in an M&A transaction has adifferent potential for generating future cash flows as a result ofdifferences in brand specific factors which might be summarised asdifferences in brand equity (Srivastava, Shervani & Fahey, 1998; Bahadiret al., 2008). Another explanation is that firms with stronger marketingcapabilities will attribute higher value to targets brands because theirexpectations of future revenues from a brand portfolio will be higherthan firms with lower marketing capabilities. This stems from the notionthat acquirers with stronger marketing capabilities are able to deploy atargets brand portfolio more efficiently, which will affect the level,growth, and volatility of cash flow expectations from the targets brandportfolio (Bahadir et al., 2008). The challenge of managing brand equity in the context of M&A is tobe able to find a way to transfer the brand equity from the stronger to Fig. 1. Brand equity redeployment model. Please cite this article as: Lambkin, M.C., & Muzellec, L., Leveraging brand equity in business-to-business mergers and acquisitions, Industrial Marketing Management (2010), doi:10.1016/j.indmarman.2010.02.020
  3. 3. ARTICLE IN PRESS M.C. Lambkin, L. Muzellec / Industrial Marketing Management xxx (2010) xxx–xxx 3stakeholder communication, employee morale and retention, corpo- The initial data set (cases A and B) consisted of a review ofrate culture, and integration speed and momentum (Balmer & Dinnie, communication materials including brochures, corporate websites and1999; Krishnan et al., 2007). During the integration phase, managerial annual reports. Semi-structured interviews were also conducted withenergy is often absorbed by internal issues, which can lead managers 12 key stakeholders (five major customers (opinion leaders in theto neglect customer-related tasks (Hitt, Hoskisson, and Ireland 1990). industry); five employees; and two investment analysts from leadingThis strong internal orientation is frequently accompanied by a stockbroker firms).decline in service quality (Urban & Pratt, 2000). This decline can cause The second data set (case AB) consisted of a review of communi-customers to question their future relationship with the merging cation materials including internal communications with employees,firms leading to defection to competitors (Reichheld & Henske, 1991). brochures, corporate websites as well as a two hour in-depth interview In the worst of situations, the relationship between the two with the CEO of Cemex Ireland. In addition to the questions assessingorganizations becomes contentious; promised synergies remain brand associations and values, questions pertaining to the rebrandingelusive; employees become distrustful and disgruntled; and custo- process were also covered.mers grow cynical and dissatisfied. With no solid brand platform towork from, company integration will often be mismanaged, and 3.2. The choice of Cemex/Readymixcommunications to key constituencies will necessarily suffer (Etten-son & Knowles, 2006, Krishnan et al., 2007). The establishment of a This case explores brand transfer following a merger which occurredstrong and clear corporate identity can help mitigate these problems, in 2005, when RMC, the majority shareholder of Readymix plc, wascommunicating what the company stands for to customers and acquired by Cemex SA DE CV. Cemex thereby became the majorityemployees (Harris & deChernatony, 2001; Rosson & Brooks, 2004). shareholder in Readymix with 62% of the shares.Whether merging or acquiring companies take advantage of this The Cemex acquisition of Readymix had many features that made itopportunity to use the corporate identity and communications in a suitable for exploring branding issues in a B2B environment following ansystematic way to manage the transition and to help create a positive M&A transaction. Firstly, Cemex is very much larger than Readymix andculture for the new entity is an empirical question. therefore met our requirement for size variation between acquirer and The modest amount of evidence that there is on this topic suggests target. Cemex is a global building materials company that employsthat companies probably do not avail of this mechanism as well as 60,000 people, has a market capitalisation of €10 billion, and operates inthey might (Ettanson and Knowles, 2006; Basu, 2006). However, a more than 50 countries throughout the Americas, Europe, Africa, therecent study shows that consumers judgment of the brand equity of Middle East, Asia, and Australia. Readymix, in contrast, is an Irishthe merged firm tended to be higher for firms following an acquirer- company that serves only its domestic market with a small presence indominant strategy, that is, firms renamed under the acquirers name the UK, with 900 employees and a market capitalisation of €69 million.rather than combined names or the targets name (Jaju et al., 2006). Secondly, Cemex and Readymix are in the same type of business and this Whether these findings also apply in B2B markets where trade acquisition may be considered horizontal or closely related, that is, itscustomers are the target audience rather than consumers is an main objective is to increase market power.empirical question that this study will try to address. 4. Research results3. Methodology 4.1. Target company B: the Readymix brand This research set out to investigate brand equity issues within aB2B context, in particular, how brand equity is transferred in a Readymix plc is a public company quoted on the Irish Stockdominant brand equity redeployment situation. A case study Exchange. It is a long established company in the building materialsapproach was chosen because of the exploratory nature of the industry. Its main products are ready-mixed concrete, blocks, mortar,research and of the empirical necessity to investigate the brand equity aggregates, concrete pipes, roof tiles and precast concrete products. Itredeployment model within its real-life B2B context (Yin, 1994). operates in the Republic of Ireland, Northern Ireland and the Isle of Man.Theoretically, we set out to investigate the applicability of the It has a small precast business in the south of England. Readymix has aresource redeployment transfer model to brand equity in industrial proliferation of subsidiary brands in its portfolio (Readymix, RMC,markets and, practically, we tried to explore how brand equity is Concrete pipes, Finlay Breton, Maynooth Tiles, Island Aggregates and sotransferred in the context of a B2B acquisition transaction. on) that lack a unifying theme and may benefit from being brought together under a coherent umbrella brand. Readymix enjoys a high level3.1. Data collection and analysis of awareness in the Irish market because of its long history and established customer relationships. However, the survey of Readymix Following Yin (1994) guidelines, a case study protocol was followed stakeholders suggested that Readymix was an old brand that hasand included the following steps: Initial meeting with senior manage- evolved over time through a number of acquisitions which have beenment to agree on research; outline of project, timing and objectives; partially assimilated but not wholly, leaving a rather confused mix ofidentification of key informants; collection of data; company documen- names and product lines. The word “readymix” is a generic descriptiontation collected on site; interviews conducted out of site and post for concrete but the company has a proprietary right to this name, theinterview verification: results and report presented to senior manage- findings indicated that this name retains some customer-based brandment. The questions were inspired by Kuhn et al. (2008) method of equity at the product level. The level of equity is attenuated, however, byassessment of the CBBE in industrial markets. a relatively poor record of customer service and a lack of strong In order to understand the brand equity transfer in this case, we personalised relationships with company personnel.investigated brand equity for three entities. “A” represents the brandequity of the acquirer (Cemex International), “B” represents the target 4.2. Acquirer A: the Cemex (international) brandcompany (ReadyMix), and finally “AB” represented the targetcompany after its rebranding (Cemex Ireland). Data pertaining to Cemex is a large company with an extensive international networkCemex International and ReadyMix (A and B) were collected in June of companies in 50 countries across five continents. Globally its annual2006, a period which was after the merger but before the change of production capacity approximates 96 million metric tonnes of cement.name, data regarding Cemex Ireland (AB) were collected in June 2009, It is quoted on both the New York and Mexican Stock Exchanges (NYSE/a year following the rebranding of Readymix as Cemex International. Mex Bolsa). It has a strong resource base of technology, skills and Please cite this article as: Lambkin, M.C., & Muzellec, L., Leveraging brand equity in business-to-business mergers and acquisitions, Industrial Marketing Management (2010), doi:10.1016/j.indmarman.2010.02.020
  4. 4. ARTICLE IN PRESS4 M.C. Lambkin, L. Muzellec / Industrial Marketing Management xxx (2010) xxx–xxxknowledge that it has built up over the years. The company has 4.4. Cemex Ireland: brand transfer outcomeestablished a major R&D centre near its European headquarters inSwitzerland in 2001 which focuses on new product development, The management of Cemex Ireland believe that the rebranding hascement process technology, business processes and information had a successful outcome with improvements in the level of brandtechnology, sustainability, and energy and CO2 emissions reduction. awareness and a strengthening of brand associations particularly All customer interviewees were familiar with the Cemex name among the larger, more sophisticated customers which are the mostalthough they didnt know much about the company other than that it is important segment of the market from Cemexs point of view. The“large” and “international”. The stockbrokers were not aware of the results of the transfer following the M&A are examined under thename Cemex but once presented with a few facts about Cemex following headings: corporate reputation and corporate culture.responded positively to the prospect of a change of name to Cemex;they thought it would be a good idea if it could be seen to signal a 4.4.1. Corporate reputationfundamental renewal of the company with the prospect of improved Two dimensions of corporate reputation have been identified asperformance to follow. Employees felt that customers are already aware particularly important in creating positive or negative brand associa-of Cemex as a large, international company and that this association tions are: corporate ability (Brown & Dacin, 1997), and financialwould raise the stature of Readymix and allow it to stand shoulder-to- position (Fombrun et al., 1993).shoulder with larger competitors. In sum, Cemex, was perceived as a very good brand name for a Corporate ability. Cemex Ireland serves two distinct marketcompany in the cement/building materials industry because it is segments: residential and commercial/infrastructural. There has beendescriptive of the product category as well as being easy to spell, a dramatic collapse in the residential market in Ireland and the onlypronounce and recognise in any geographic region or language. It is significant growth area is in infrastructure projects. Cemex manage-also known in the industry as a successful, international company and ment believes that they have been gaining market share in theso brings an established reputation to whatever business it is applied infrastructural segment because of their size, reputation, expertiseto. and international connections. Big infrastructure projects are often managed as joint ventures between an international corporation and a local Irish contractor. The name of international brand enhances4.3. New company AB: Cemex Ireland: brand transfer process brand associations in terms of corporate ability as explained by the Cemex Ireland CEO: “… what is happening is that the International The rebranding of ReadyMix into Cemex Ireland was conducted partners have often worked with Cemex in Spain, in the UK, in Francegradually and in a low key manner. The most visible aspect of the brand or Germany so when they arrive here they first say: “Oh! Cemex istransfer was the change of name to Cemex on the companys stationery here…ok, we have worked with them before and they have been ableand livery. Today 80% of their 183 trucks have been repainted in the to deliver this type of stone, or concrete with those specifications”. BigCemex colours and carry the Cemex logo. The company considered that projects also build the word of mouth reputation. Involvement inthe visibility of their fleet on the roads of Ireland was the best way to iconic projects such as a national football stadium or a large bridge, forinform the market about the rebranding and to build an awareness of example, provides lots of publicity and this, in turn, generates furtherthe Cemex name. In addition to these visual changes, the change of business.name was signified to external stakeholders through a letter which wassent to customers and financial analysts. Due to financial constraints, Financial position. An unanticipated negative transfer has beenhowever, no major event marked the launch of the new brand. the weak financial reputation of Cemex on international markets. The Cemex management was well aware of the importance of internal company was on the brink of bankruptcy at one point with debts ofbranding and the internalisation of brand values and saw the $15 billion in Australia and the US. Awareness of this fact led some ofrebranding as an opportunity to update and renew commitment to their suppliers in Ireland to refuse to give them credit even thoughthe Cemex brand values. To that end, the management ran focus Cemex Ireland is technically quite separate from Cemexgroups and did a major launch with the commercial team of the (International).company: the salespeople, the credit controllers, and other peoplewho are in contact with customers. This was a one day work shop 4.4.2. Corporate culturewhich was not just about the new logo but really about the philosophy The arrival of international managers from Cemex Internationalbehind what is new about the company under the Cemex ownership. brought very different work practices to Readymix and required aThe theme was: “the colors have changed, now we need to change”. huge cultural change. One illustration of this lies in the fact that The brand associations before the rebranding were, according to Cemex International relies very heavily on systems and data forthe Cemex Ireland CEO: managing their operations all around the world while the local Irish staff were more used to informal practices. The new management of• Cemex International: “global, professional, full of energy, driving… Cemex Ireland linked the reward system to this philosophy. Plant always moving ahead, dynamic”. managers used to be paid by the amount of cubic meters leaving the• ReadyMix: “local, stable, trustworthy”. doors, rather than the quality, the cost, the accidents, the waste, the cleanliness of the plant, so, not surprisingly, they had 12% of wasted The desired brand associations for the future, following the concrete. The new tighter system is now starting to become acceptedrebranding were for Cemex Ireland to be regarded as a trustworthy and there are improvements in all of the key operational performanceorganization as before, but also as a dynamic, innovative organization, metrics.combining the best of Cemex International with the establishedreputation of the local company. 5. Theoretical and managerial implications: brand transfer in B2B Cemex Ireland also combined the rebranding with the launch of a M&Acorporate social responsibility program with local communities andgovernment agencies. They sponsored local sports and community 5.1. Theoretical implicationsinitiatives in areas where they have quarries, cement factories anddistribution depots. They also engaged with government organiza- The first objective of the study was to determine which elementstions involved in research and policy on the built environment. of brand equity may be considered transferable in a B2B context. The Please cite this article as: Lambkin, M.C., & Muzellec, L., Leveraging brand equity in business-to-business mergers and acquisitions, Industrial Marketing Management (2010), doi:10.1016/j.indmarman.2010.02.020
  5. 5. ARTICLE IN PRESS M.C. Lambkin, L. Muzellec / Industrial Marketing Management xxx (2010) xxx–xxx 5one immediate obvious answer is that the brand name is transferred brand power was not quantitatively assessed in this study, this wouldand that this embodies the value that is described as brand equity. suggest a strengthening of the brand equity.Evidence from our research, however, suggests that most acquisitions Business stakeholders are also aware of the possible synergies amonginvolve a transfer of a wider range of marketing assets, often but not the various elements of a brand portfolio. Since corporate reputationalways in support of a brand name transfer. For example, Capron and drives brand equity in B2B markets, the adoption of a single name acrossHulland (1999) examined the extent to which firms redeployed three an entire product line is recognised as having some major benefit for bothkey marketing resources (brands, sales forces, and general marketing buyers and suppliers. Corporate rebranding following an M&A transactionexpertise) following horizontal acquisitions. may also be better accepted in a B2B environment. A merger is a major In our study some slightly different elements of brand equity transfer event which seldom occurs in the lifetime of any corporation. This studywere also observed. First, perceptions of corporate ability—the com- shows that, used as a means to signify a new strategic decision, a newpanys capabilities for producing high quality products—may improve as corporate name can be quickly accepted and endorsed by the internal anda result of a dominant brand redeployment exercise. The study shows external stakeholders.that what consumers know about the acquiring company can influence In sum, this case study provides a very positive view on the use oftheir beliefs about and attitudes toward new products manufactured by rebranding as a strategic tool to rationalise and integrate a complex mixthe acquired company. From a brand management viewpoint, the of businesses accumulated through a series of mergers and acquisitions.acquirer companys expertise in producing and delivering its output can It also demonstrates the symbolic value of an acquirer-dominantbe leveraged for a positive gain in equity. In this example, the expanded rebranding as a means of communicating positive intent both togeographic coverage as well as the ability to leverage on the employees and the stock market. The conclusion that we have reached isinternational presence was associated with a positive brand redeploy- that, in a B2B environment, ambitious, acquisitive companies should goment from acquirer to target. forward confidently to reconfigure their businesses so as to maximise Secondly, the financial position, which is a key variable in the coherence and efficiency and should look to their brand strategy as a keymeasurement of corporate reputation (Fombrun et al., 2000) can also tool in implementing their corporate strategy.be leveraged. Adding these variables together with other know-how variables 6. Conclusions and directions for further researchgives us a model of brand equity transfer that suggests which variablesare likely to be transferred from acquirer to target. This is illustrated in Although this study reports some interesting findings, there isFig. 2. obviously considerable scope for further research to validate these findings. First, although the qualitative nature of the research has5.2. Managerial implications allowed us to explore the phenomenon in depth and appreciate its complexity, a large quantitative study would further validate our initial The positive response of all three groups of respondents (employees, findings. Our conclusion rests on the assumption that the brandcustomers and financial community) towards the rebranding of reputation and associations are correlated to brand equity as posed inReadyMix under the acquirers brand name (Cemex) contrasts with customer brand equity models (Kuhn et al., 2008). A quantitativeseveral rebranding failures in the B2C sectors. The rebranding of the UK approach would confirm whether the observed weakening of brandpost office (to Consignia), BT Cellnet (to O2), ONdigital (to ITV Digital), associations also corresponds to a loss of brand equity.Payless Drug Store (to Rite Aid) were catalogued as rebranding failuresbecause the change of name led to brand equity dilution (Haig, 2003). AcknowledgementSimilarly an experiment conducted by Jaju et al. (2006) demonstratedthat a dominant acquirer branding strategy could lead to a substantial The authors wish to thank the reviewers and editors for theirdecrease in consumer-based brand equity where there was a bad fit constructive comments.between the firms and a mismatch in the attitudes of the customers ofthe merged entities. References The results of our study suggest a contrary view which is that B2Bstakeholders (customers, employees and financial analysts) welcome Aaker, D. A. (1991). Managing brand equity — Capitalizing on the value of a brand name. 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