The Influence of Luxury Brands' Cross-Border Acquisition on Consumer Brand Perception

Abstract

With global recession and growing international competition among brands, cross-border acquisitions (CBAs) are increasing in the luxury industry. Since country-of-origin (COO) plays a large role in a luxury brand's image, a CBA that changes the nationality of the company owning the luxury brand and modifies consumer COO knowledge can influence consumer brand perception. This study explores the influence of a luxury brand's CBA on perceived brand value and the moderation effect of brand loyalty. In the case of a CBA by a company associated with a superior country image, only perceptions of low-loyalty consumers are affected positively by the CBA information. In the case of a CBA by a company associated with an inferior country image, only perceptions of high-loyalty consumers are affected negatively by the CBA information. The result of this study provides a deep understanding of how consumer brand perception is influenced by the changes of brand-country association.