Merchandising/Marketing/Retailing: Management

Maintaining brand authenticity upon acquisition: The role of acquirer reputation and operational independence

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Abstract

The study investigates the impact of a startup fashion brand's acquisition by a larger corporation on brand authenticity. Brand authenticity, key to consumer loyalty, might be at risk when startups merge with larger entities. The research examines how the reputation of the acquiring company (AR) and the operational independence (OI) of the startup affect consumer perceptions of authenticity. Utilizing signaling and cue diagnosticity theories, the study hypothesizes that positive AR and high OI lead to higher perceived brand authenticity. However, findings from a scenario-based experiment with 200 participants indicate that while AR significantly influences brand authenticity, OI does not hold as a reliable cue for consumers. The importance of the founder's role post-acquisition is also underscored. The results suggest that AR is a critical consideration for startups during acquisitions, but OI's advertised benefits might not substantially affect consumer perceptions of authenticity.

Keywords: acquisition, startups, acquirer reputation, operational independence, brand authenticity

How to Cite:

Shin, D. C. & Jin, B. E., (2024) “Maintaining brand authenticity upon acquisition: The role of acquirer reputation and operational independence”, International Textile and Apparel Association Annual Conference Proceedings 80(1). doi: https://doi.org/10.31274/itaa.17070