The localness effect of family firm branding on consumer perceptions and purchase intention: An experimental approach

Purpose Mergers and acquisitions (M&As) are a critical time for organizations and their consumers. For the company, there are many financial and non-financial risks. For customers, it requires deciding whether or not to continue the relationship that they had with the previous firm. This paper explores the extent to which communicating the family business (FB) brand, and the previous reputation of the acquirer affects customer perceptions and intentions after an M&A event.Design/methodology/approach Data for this study were collected from 159 Italian participants. We used a 2 (Communication of FB brand: Yes vs. No) by 3 (Reputation: positive, neutral, negative) between subjects’ experiment to test how the communication of the FB brand and the reputation of the acquirer affected perceived trustworthiness and service quality, and how this, in turn, influenced customer purchase intentions.Findings We find that communicating the FB brand does not influence consumer perceptions and intentions toward the acquired company. However, the previous reputation of the acquiring firm is critical in influencing consumer perceptions and intentions to buy.Originality/value Our study continues the growing research on M&A in family firms. It also increases our understanding of the boundary conditions of the FB brand effects, and the relevance that the previous reputation of a family firm can have in M&A scenarios. Finally, our study introduces the “Halo” and “Velcro” effects into the FB literature.

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Consumer Responses to CSR News of Family Business Brands: An Experimental Approach

Jaufenthaler,

Schroll,

Grewal

2024

Family Business Review

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Scholars and practitioners increasingly call for a more nuanced understanding of why and when family firm branding is more versus less effective. Across three studies, we find that, in general, communicating family ownership enhances consumer responses because it humanizes the company. Importantly, however, the effectiveness of this communication strategy depends on (a) the presence and (b) the source of positive corporate social responsibility (CSR) news. Specifically, we demonstrate that family firm branding is less effective when an external source informs consumers about the company’s CSR. It does offer a strong competitive advantage, however, when the company self-reports its CSR activities.

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The localness effect of family firm branding on consumer perceptions and purchase intention: An experimental approach

Cited by 3 publications

References 65 publications

Digital Transformation in Family Firms

Digital Transformation in Family Firms

Understanding customer’s post-M&A intentions and behaviors: the role of the family business brand and previous reputation of the acquiring firm

Consumer Responses to CSR News of Family Business Brands: An Experimental Approach

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