Can IT industry merger and acquisition effect on brand equity of their product/services? A case study from Qatar

Abstract

A combination of assets and liabilities when associated to a brand which provides additional value to the specific product and/or service is brand equity. Branding is used as a means to arrive at a conclusion and decision about the product or service. Brand equity has gained a great deal of attention in the marketing literature and hence, many definitions of brand equity have been put forward. This study reveals the relationship and effect of brand equity before and after merger and acquisition amongst organizations. The major acquisitions and mergers of two technological giants: Microsoft-Skype technologies and Facebook-WhatsApp instant messaging application are considered for this study. In the present world where technology is growing by leaps and bounds, there is every need to understand and analyze the relationship and effect of these mergers and acquisitions from the perspective of perceived brand value of customer. The purpose of this study is to establish a relationship between brand equity after the M & A and the customer loyalty. Also, the study aims to identify the drivers of brand equity for technologically advanced organizations. A total of 509 sample surveys are collected for this purpose from the students of Qatar University by random sampling method. It is hence, revealed that the effect of brand awareness and perceived brand value are the important origins of brand equity. Results also show that the significance of perceived brand value when compared to that of total effect is four times higher than the brand awareness. Significant theoretical and managerial contributions to brand equity are noticed from the organizations before and after mergers and acquisitions in many ways. Apart from these, product and service functionality are also identified as important components which drive the brand awareness and brand value directly and explain the indirect relationship towards brand equity. Post the merger and acquisition of organizations from the customer perspective the acquired organization is required to develop and integrate the companies involved in order to resolve the technical complexities of product and service related issues. These organizations are supposed to extend support to others within the acquisition to foster confidence among the customers of the new firm. By basing on these inferences, the management is required to take into consideration and focus its efforts on the tasks and activities to be implemented at this juncture. Few of the tasks that can be implemented include, the feasibility operations to improve the customer service, increase the customer's identification on brand awareness and perceived brand value apart from managing resource allocation and training needs within organizations. Thereby, based on the results of this study, it is evident that the merger and acquisitions of the companies help them to enhance the brand equity. - Medwell Journals, 2019.