Brand Strategy for Mergers and Acquisitions - Part 2

In Part 1 of the Brand Strategy for Mergers and Acquisitions series, you learned about the choices companies have to make when they acquire brands through a merger. Newly acquired brands can retain their original brand names, take on the acquiring company's brand name, or a dual-brand could be created as a transitional device (although in some instances, the dual-brand stays around for many years).  One of the most important steps that should be taken before any decisions about the combined brand portfolio should be made is conducting consumer market research.
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Not only is market research critical to better understand how existing customers feel about the brand acquisitions, but the broader consumer audience should also be surveyed. You don't want to lose existing customers by pursuing the wrong branding decisions, but you also want to open the doors for new customers to try the brand based on a powerful new brand persona and story post-merger.

The company's leadership team might have very different perceptions and feelings about the brands in the combined brand portfolio, but those perceptions and feelings might not reflect what the consumer audience thinks and feels. Unfortunately, brand portfolio decisions are often made based on these internal perceptions rather than the consumer audience's wants and needs.

Furthermore, these decisions are often based on short-term factors such as the required budget to conduct the necessary research and the required marketing investments to promote the newly acquired brands or rebranding efforts. Another short-term factor that affects the brand decision making process after a merger is time. Research takes time, and leadership doesn't like to wait. As a result, inadequate marketing messages and programs are developed, and consumer acceptance doesn't reach the levels of success it should post-merger.

In other words, a press release, online video of the CEO talking about the merger, and an ad saying "XYZ Brand" is now part of the "ABC Brand Family" is insufficient. Instead, companies that acquire brands should conduct research to learn what messages will best resonate with the consumer audience to motivate them to not only understand the merger but also to support it. Consumer buy-in to your brand messages is critical at every stop of your company and brand lifecycle, but it's a step that is too often skipped when companies merge or acquire brands.

Research questions should be crafted to gain deeper insight into consumers' perceptions and feelings about all brands involved in the merger. Ask consumers what kinds of messages they want to hear from the combined company in order to make them trust that the merger is in their best interests and to make them feel confident that the brands they're loyal to will be around for years to come. What are consumers' biggest concerns about the merger? What do consumers who are not current customers need to hear in order to get interested in the new brand portfolio?

Mergers and acquisitions create uncertainty for consumers, so post-merger marketing messages and initiatives should focus on providing a sense of security. All too often, messaging focuses on how great the merger is for the company rather than consumers. And when messages are related to consumers, they're vague and disingenuous. Consumers recognize messages that are filled with empty promises, because they've heard those messages before from other companies. You can position your post-merger brand portfolio for success by communicating specific messages to consumers that are meaningful and relevant to them.

Remember, brand confusion is the number one brand killer, and mergers and acquisitions create a great deal of brand confusion in the minds of consumers. The marketer's job is to clear up any confusion in a believable way. A video of the CEO talking about the many opportunities the merger creates might work for investors, but it doesn't work for consumers. To ensure your post-merger brand portfolio is most successful, create a brand strategy that prioritizes consumers above everything else.

If you missed Part 1 of the Brand Strategy for Mergers and Acquisitions series, follow the preceding link to read it now.

Image: ilker, Matt MacGillivray