Consumer perceptions on the incorporation of established brands : The acquisition of Body Shop by L’Oréal
This thesis aims at investigating consumers’ perceptions on the incorporation of an established brand and how the general attitude and buying behaviour is altered in the course of an acquisition. The combination of two or more brands in a newly formed conglomerate implies a combination of values, principles and associations that might affect a company’s appeal. Therefore, underlying reasons for M&As will be elaborated upon as well as branding concepts based on brand image, loyalty and reputation in order to bridge the two theoretical areas with a case study. The acquisition of Body Shop International by L’Oréal represents the practical case, which will be analysed in reference to consumers’ reactions towards it. Quantitative consumer questionnaires will be conducted in order to collect representative data on consumers’ perceptions and associations of the brand Body Shop. Moreover, an expert interview with a Body Shop representative will be executed in order to add the company’s perspective. By analysing the results of the questionnaire, the thesis reveals an observable trend towards a correlation of the awareness of the acquisition and a negative shift in customer perception. The buying behaviour is however not found to be influenced by the combination of the two firms. In conclusion, it can be stated that the need for pre-acquisition analysis regarding strategic fit and compatibility of values and associations is assured. The study clearly identifies that brand dilution is a possible threat for established brands and implies the risk of lost credibility and loyalty.
School:Högskolan i Gävle
Source Type:Master's Thesis
Keywords:consumer perceptions brands portfolio incorporation buying behaviour mergers and acquisitions
Date of Publication:09/02/2007