The impact of functional integration on perceived risk and consumer-based brand equity

Consumers today have access to a wide span of corporate information and are increasingly aware of the degree to which the functional areas of marketing and supply chain activities are becoming more integrated. Functional integration involves coordinating supply- and demand-focused activities and is theorized to create two interrelated benefits for consumers: lower perceived purchase risk and, ultimately, higher consumer-based brand equity. Despite an emphasis on the important role of consumers in the functional integration literature, the consumers’ viewpoint is missing. This research addresses this gap using a survey and an experiment to investigate the impact of functional integration on consumers’ perceptions of risk and consumer-based brand equity. Findings suggest that when functional integration acts as a component of brand association, purchase risk decreases and consumer-based brand equity increases. The results can help scholars and practitioners better understand the role of functional integration by advancing the nomological net of brand associations as part of the standard marketing mix.     

The impact of mergers and acquisitions on brand equity: A structural analysis

An overlooked strategic benefit of mergers and acquisitions (M&As) is their impact on brand equity. M&As may affect consumer brand preferences, which in turn will affect a firm’s profit. We develop a structural model with a difference-in-differences specification to measure how M&As affect a firm’s profit through three mechanisms: brand equity, cost synergies, and product portfolios. We analyze Lenovo’s acquisition of IBM’s PC division in China’s PC market and find that the increase in brand equity contributed the most to increasing Lenovo’s profit, followed by cost synergies. To explore the generalizability of our modeling approach, we apply it to Geely’s acquisition of Volvo and also find that the gains in brand equity contributed the most to Geely’s profit increase.     

The impact of brand equity and the hedonic level of products on consumer stock-out reactions

We investigate the impact of brand equity and the hedonic level of the product on consumer stock-out responses. We also examine whether the hedonic level of the product moderates the effect of brand equity. Using a sample of Dutch consumers divided over eight product groups and eight retail chains, we tested our hypotheses and found that consumers were more loyal to high-equity brands than to low-equity brands in the case of a stock-out situation. In hedonic product groups, consumers were more likely to switch to another store. Purchasers of high-equity brands in hedonic product groups were, compared to purchasers of high-equity brands in utilitarian product groups, less inclined to postpone the purchase but were more likely to switch to another item by that brand. In addition to these two main variables, we also investigate the effect of variables from prior research and some new variables, such as stockpiling and impulse buying. Finally, we discuss the theoretical and managerial implications of the findings.