Brand corrosion: Mass-marketing's threat to luxury automobile brands after merger and acquisition

Journal of Product and Brand Management

Volumn 15, Issue 2, 2006, Pages 106-120

  Štrach, Pavel ^a   Everett, André M ^b  

^a UNIVERSITY OF ECONOMICS   (Czech Republic)

^b UNIVERSITY OF OTAGO   (New Zealand)

Author keywords

Acquisitions and mergers; Automobile industry; Brand extensions; Brands; Globalization

Indexed keywords

EID: 33646918870     PISSN: 10610421     EISSN: None     Source Type: Journal    
DOI: 10.1108/10610420610658947     Document Type: Article

References (107)

1. Aaker, D.A. (1997), "Should you take your brand where the action is?", Harvard Business Review, Vol. 75 No. 5, pp. 135-43.
2. Aaker, D.A. and Jacobson, R. (1994), "The financial information content of perceived quality", Journal of Marketing Research, Vol. 31 No. 2, pp. 191-201.
3. Algesheimer, R., Dholakia, U.M. and Herrmann, A. (2005), "The social influence of brand community: Evidence from European car clubs" Journal of Marketing, Vol. 69 No. 3, pp. 19-34.
4. Andreassen, T.W. and Lindestad, B. (1998), "Customer loyalty and complex services impact of corporate image", International Journal of Service Industry Management, Vol. 9 No. 1, pp. 7-23.
5. A.T., Kearney (2001), Growth and Innovation: Key Challenges for the Auto Industry, A.T. Kearney, London.
6. Atlanta Business Chronicle (2004), "Saab USA moving headquarters from Norcross to the Motor City", Atlanta Business Chronicle, 20 May, available at: http://atlanta.bizjournals.com/atlanta/stories/2004/ 05/17/daily40.html (accssed 11 August 2004).
7. Auto Channel (2005), "GM July 2005 Sales Climb 19.1 Percent", The Auto Channel, Inc., available at: www.theautochannel.com/news/2005/ 08/02/139200.html (accessed 19 August 2005),
8. Bartlett, C. and Ghoshal, S. (2000), Transnational Management: Text, Cases, and Readings in Cross-Border Management, Irwin/McGraw-Hill, Boston, MA.
9. BBC (2004), "Jaguar ends car making in Coventry", BBC News, 17 September, available at: http://news.bbc.co.uk/1/hi/business/3664850.stm (accessed 18 September 2004).
10. BBC (2005a) "Smart car dents DaimlerChrysler," BBC News, 28 April, available at: http://news.bbc.co.uk/1/hi/business/4494873.stm (accessed 6 August 2005).
11. BBC (2005b), "Saab chief goes after GM decision" BBC News, 9 March, available at: http://news.bbc.co.uk/1/hi/business/4332537.stm (accessed 20 April 2005).
12. Bruce, D. (1998), "Medium-sized sports Sedan from Jaguar", Otago Daily Times (New Zealand) 31 October, p. 61.
13. Burt, T. "2001a), "Jaguar gears up for image makeover", Financial Times, 15 July, available at: http://news.ft.com/ft/gx.cgi/ ftc?pagename=View&c=Article&cid=FT3UCLA47PC (accessed 3 August 2001).
14. Burt, T. (2001b), "General Motors invests to lift volumes at Saab subsidiary". Financial Times, 28 February, available at: http://news.ft.com/ft/gx.cgi/ ftc?pagename=View&c=Article&cid=FT3USM5ERJC (accessed 21 March 2002).
15. Burt, T. and Lambert, R. (2000), "The Schrempp Gambit", Financial Times (London), accessed 30 October, p. 26.
16. Business Week (2001), "The global brand scoreboard", Business Week, 6 August, available at: http://bwnt. businessweek.com/brand/2001/ (accessed 10 May 2005).
17. Business Week (2002), "The global brand scoreboard", Business Week, 5 August, available at: http://bwnt.businessweek.com/brand/2002/ (accessed 10 May 2005).
18. Business Week (2003), "The global brand scoreboard", Business Week, 4 August, available at: http://bwnt.businessweek.com/brand/2003/ (accessed 10 May 2005).
19. Business Week (2004), "The global brands scoreboard", Business Week (Asian edition), 2 August, pp. 68-71.
20. Business Week (2005), "The global brand scoreboard", Business Week, 1 August, pp. 90-4.
21. Chambers, M. (2003), "Mercedes looks back to the future", Reuters, on XtraMSN, 13 November, available at: http://xtramsn.co.nz/ business/0,5007-2826417,00.html (accessed 19 November 2003).
22. Chen, A.C.-H. and Chen, S.K. (2000), "Brand dilution effect of extension failure: A Taiwan study", Journal of Product & Brand Management, Vol. 9 No. 4, pp. 243-54.
23. Choo, S. and Mokhtarian, P.L. (2004), "What type of vehicle do people drive? The role of attitude and lifestyle in influencing vehicle type choice", Transportation Research Part A, Vol. 38, pp. 201-22.
24. Colombo, R.A., Ehrenberg, A.S.C. and Sabavala, D. (2000), "Diversity in analyzing brand-switching tables: The car challenge", Canadian Journal of Marketing Research, No. 19, pp. 23-36.
25. Cooper, D.R. and Emory, C.W. (1995), Business Research Methods, 5th ed., Irwin, Chicago, IL.
26. Delgado-Ballester, E. and Munuera-Alemán, J.L. (2001), "Brand trust in the context of consumer loyalty", European Journal of Marketing, Vol. 35 Nos 11-12, pp. 1238-58.
27. Delgado-Ballester, E. and Munuera-Alemán, J.L. (2005), "Does brand trust matter to brand equity", Journal of Product & Brand Management, Vol. 14 No. 3, pp. 187-96.
28. Deshpande, R. (1983), "'Paradigms lost': On theory and method in research in marketing", Journal of Marketing, Vol. 47 No. 4, pp. 101-10.
29. Deshpande, R. and Webster, F.E. Jr (1989), "Organization culture and marketing: Defining the research agenda", Journal of Marketing, Vol. 53 No. 1, pp. 3-15.
30. Deutsche Welle (2005), "GM to build mid-size cars in Germany", DW-World.de, Deutsche Welle, 4 March, available at: www.dw-world.de/dw/ article/0,1564,1508385,00.html (accessed 29 July 2005).
31. DTI/SMMT (1999), Jaguar Cars. Auto Industry, Automotive Unit of the Department of Trade and Industry, Government of the United Kingdom, 1 March, available at: www.autoindustry.co.uk/features/articles/ article-JC?s1/4-136wleknms4imd0r (3 November 2004).
32. Dubois, B. and Duquesne, P. (1993), "The market for luxury goods: income versus culture", European Journal of Marketing, Vol. 27 No. 1, pp. 35-44.
33. Dubois, B. and Paternault, C. (1995), '"Observations: Understanding the world of international luxury brands: The 'dream formula'", Journal of Advertising Research, Vol. 35 No. 4, pp. 69-76.
34. Ehrenberg, A.S.C., Uncles, M.D. and Goodhart, G.J. (2004), "Understanding brand performance measures: Using Dirichlet benchmarks" Journal of Business Research, Vol. 57 No. 12, pp. 1307-25
35. Eisenhardt, K.M. (1989), "Building theories from case study research", Academy of Management Review, Vol. 14 No. 4, pp. 532-50.
36. Eisenhardt, K.M. (1991), "Better stories and better constructs: The case for rigor and comparative logic", Academy of Management Review, Vol. 16 No. 3, pp. 620-7.
37. Ewing, M.T., Fowlds, D.A. and Shepherd, I.R.B. (1995), "Renaissance: A case study in brand revitalization and strategic realignment", Journal of Product & Brand Management, Vol. 4 No. 3, pp. 19-26.
38. Feast, R. (1998), "How Ford and GM manage their European acquisitions", Automotive Industries, Looksmart Ltd, April, available at: www.findarticles.com/p/articles/mi_m3012/is_n4_v178/ ai_20499968 (accessed 18 August 2004).
39. Ferrari (2005), "2005 Ferrari - showing off in Detroit", Motor Cities, 10 January, available at: www.motorcities.com/contents/ 05AAL313315551.html (accessed 12 August 2005).
40. Fiske, N. and Silverstein, M.J. (2004), Trading Up: Trends, Brands, and Practices 2004 Research Update, May, Boston Consulting Group, available at: www.bcg.com/publications/files/TradingUp2004ResUpdate51104.pdf (accessed 5 August 2005).
41. Flint, J. (2002), "Saab story" Forbes, 2 February, available at: www.forbes.com/2002/12/02/cx_jf_1202flint_print.html (accessed 9 August 2004).
42. Flint, J. (2004), "Tarnished jewels ", Forbes, 27 January, Available at: www.forbes.com/2004/01/27/cz_jf_0127flint_print.html (accessed 6 October 2004).
43. Ford, R. (2004), "A Saab atop a Subaru heats things up" The Boston Globe, 11 July, available at: www.boston.com/cars/articles/2004/ 07/11/_saab_atop_a_subaru_heats_things_up/ (11 August 2004).
44. Formula1 (2004), "2004 constructors championship", Formula1, 24 October, available at: www.formula1.com/archive/team/2004.html (accessed 2 November 2004).
45. Garsten, E. (2002), "(2002) Vehicle quality gains mixed", The Detroit News - Auto Insider, 8 November, available at: www.detnews.com/ 2002/autosinsider/0211/09/b01-5145.htm (accessed 21 October 2004).
46. General Motors (GM) (2004), General Motor Corporation: 2004 Annual Report, General Motors, Detroit, MI.
47. General Motors (GM) (2005), "Shanghai GM completes new plant", General Motors, 25 May, available at: www.gm.com/company/gmability/ workplace/100_news/120_news/shanghai_053105.html (accessed 12 August 2005).
48. Glynn, M.S. and Brodie, R.J. (1998), "The importance of brand-specific associations in brand extension: Further empirical results", Journal of Product & Brand Management, Vol. 7 No. 6, pp. 509-18.
49. Goodyear, M. (1996), "Divided by a common language: Diversity and deception in the world of global marketing", Journal of Market Research Society, Vol. 38 No. 3, pp. 105-22.
50. Grant, J. (2002), "Jaguar losses pose setback for Ford", Financial Times, 28 September, available at: http://news.ft.com/servlet/ ContentServer?pagename=FT.com/StoryFT/ FullStory&c=StoryFT&cid=1031119743363 (accessed 30 September 2002).
51. Green, G. (2005), "Exclusive Q&A: Alfa Romeo Chief Karl-Heinz albfell," Edmunds.com, Inside Line, available at: www.edmunds.com/insideline/do/Features/articleId=06445 (accessed 19 August 2005).
52. Greyser, S.A. (1999), "Advancing and enhancing corporate reputation", Corporate Communications: An International Journal, Vol. 4 No. 4, pp. 177-81.
53. Hammonds, D. (2004), "Jaguar offers X-Type Wagon, New XJ8", Pittsburg Post-Gazette, 13 October, available at: www.post-gazette.com/ pg/04287/394619.stm (accessed 23 October 2004).
54. Henderson, T. (2005), "What drives Detroit: The economic and technological challenges facing the auto industry", FACSNet, 19 January, available at: www.facsnet.org/tools/biz_econ/detroit_auto.php (accessed 6 August 2005).
55. Hickey, B. (2001), "GM may bid for Mercedes - Report", Financial Times MarketWatch.com (Europe), 15 January.
56. Homburg, C. and Bucerius, M. (2005), "A marketing perspective on mergers and acquisitions: How marketing integration affects postmerger performance", Journal of Marketing, Vol. 96 No. 1, pp. 95-113.
57. International Organization of Motor Vehicle Manufacturers (2005), OICA Statistics, available at: www.oica.net/htdocs/Main.htm (accessed 19 August 2005).
58. J.D. Power (2004), J.D. Power and Associates Reports: Korean- Branded Vehicles Overtake Europeans and Domestics in Initial Quality, 28 April, J.D. Power and Associates, Westlake Village, CA.
59. J.D. Power Consumer Center (2005), Performed Database Inquiries., available at: www.jdpower.com/cc/index.jsp (accessed 31 October 2005).
60. Jaguar USA (2004), Jaguar USA Website: Company History, available at: www.jaguarusa.com/us/en/company/history (accessed 20 October 2004).
61. John, D.R., Loken, B. and Joiner, C. (1998), "The negative impact of extensions: Can flagship products be diluted?", Journal of Marketing, Vol. 62 No. 1, pp. 14-32.
62. Jordan Keane, M. and McMillan, Z. (2004), "Above and beyond (brand papers)", Brand Strategy, No. 187, p. 30.
63. Kapferer, J.-N. (2001), Reinventing the Brand: Can Top Brands Survive the New Market Realities?, Kogan Page, London.
64. Karolyi, G.A. (2003), "DaimlerChrysler AG, the first truly global share", Journal of Corporate Finance, Vol. 9 No. 4, pp. 409-30.
65. Kelly, K. (2003), "Quality: Priority Ein", WardsAuto.com - Primedia Business Magazines and Media, 1 March, available at: http://waw.wardsauto.com/ar/auto_quality_priority_ein_2/ (accessed 8 May 2005).
66. Kerwin, K. (2004), "Ford learns the lessons of luxury", Business Week (US edition), 1 March, pp. 116-7.
67. Kim, C.K. and Lavack, A.M. (1996), "Vertical brand extensions: current research and managerial implications", Journal of Product & Brand Management, Vol. 5 No. 6, pp. 24-37.
68. Kirmani, A., Sood, S. and Bridges, S. (1999), "The ownership effect in consumer responses to brand line stretches", Journal of Marketing, Vol. 63 No. 1, pp. 88-101.
69. Kiser, E. (1997), "Comment: Evaluating qualitative methodologies", Sociological Methodology, Vol. 27, pp. 151-8.
70. Kitman, J.L. (2004), "For Saab, some see the beginning of the end. others see the middle", New York Times, 24 May, available at: www.nytimes.com/2004/05/24/automobiles/ 24dt-autolog.html?ex=1092456000&en=14c996f0790f3aaf&ei= 5070&8dt (accessed 9 August 2004).
71. Lambert-Pandraud, R., Laurent, G. and Lapersonne, E. (2005), "Repeat purchasing of new automobiles by older consumers: Empirical evidence and interpretations", Journal of Marketing, Vol. 69 No. 2, pp. 97-113.
72. Landler, M. (2005), "DaimlerChrysler to scale back mini-car unit", New York Times, 2 April, available at: www.nytimes.com/2005/ 04/02/business/worldbusiness/02daimler.html?pagewanted=all (accessed 2 April 2005).
73. Leong, S.M. (1997), "Dominance and dilution: The effects of extending master brands", Journal of Consumer Marketing, Vol. 14 No. 5, pp. 380-90.
74. Li, J. (2005), "Shanghai gears up in the lane for luxury", China Daily, 5 May, available at: www2.chinadaily.com.cn/english/doc/ 2005-05/05/content_439625.htm (accessed 12 August 2005).
75. Lienert, A. (1998), "Brand management at the big three", Management Review, Vol. 87 No. 5, pp. 53-7.
76. Loken, B. and John, D.R. (1993), "Diluting brand beliefs: When do brand extensions have a negative impact?", Journal of Marketing, Vol. 57 No. 3, pp. 71-84.
77. Martínez, E. and Pina, J.M. (2003), "The negative impact of brand extensions on parent brand image", Journal of Product & Brand Management, Vol. 12 No. 7, pp. 432-48
78. Mintel (2003), Auto Market Vol. 3: Sports & Luxury Cars - US - January 2003, Mintel International Group Ltd, Chicago, IL.
79. Nueno, J.L. and Quelch, J.A. (1998), "The mass marketing of luxury", Business Horizons, Vol. 41 No. 6, pp. 61-8.
80. Pauwels, K., Silva-Riss, J., Srinivasan, S. and Hanssens, D.M. (2004), "New products, sales promotions, and firm value: The case of the automobile industry", Journal of Marketing, Vol. 68 No. 3, pp. 142-56.
81. Prabhu, J.C., Chandy, R.K. and Ellis, M.E. (2005), "The impact of acquisitions on innovation: Poison pill, placebo, or tonic?", Journal of Marketing, Vol. 69 No. 1, pp. 114-30.
82. PriceWaterhouseCoopers (2005), Autofacts Executive Perspectives - 2005 Q3 Data Release, PriceWaterhouse Coopers, New York, NY.
83. Priddle, A. (2000), "A marriage of convenience", WardsAuto.com - Primedia Business Magazines and Media, 1 May, available at: http://waw.wardsauto.com/ar/auto_marriage_convenience/ (8 May 2005).
84. Priddle, A. (2004), "British auto making needs more than charm", WardsAuto.com - Primedia Business Magazines and Media, 29 September, available at: http://wardsauto.com/ar/ auto_british_auto_marketing/index.htm (9 October 2004).
85. Rao, V.R., Agarwal, M.K. and Dahlhoff, D. (2005), "How is manifest branding strategy related to the intangible value of a corporation?", Journal of Marketing, Vol. 68 No. 4, pp. 126-41.
86. Reast, J.D. (2005), "Brand trust and brand extension acceptance: the relationship", Journal of Product & Brand Management, Vol. 14 No. 1, pp. 4-13.
87. Reuters (2005), "Mercedes may drop goal to top quality survey, chief says", Detroit News, 6 May, available at: www.detnews.com/ 2005/autoinsider/0505/06/1auto-173641.htm (accessed 9 May 2005).
88. Richards-Carpenter, T. (2003), "Forthcoming models - Jaguar X-Type Estate: The two-minute guide", Top Gear, BBC, 24 September, available at: www.topgear.com/content/news/cars_coming_soon/08/ (accessed 21 October 2004).
89. Rosecky, R.B. and King, A.B. (1996), "Perceptual differences among owners of luxury cars: Strategic marketing implications"The Mid-Atlantic Journal of Business, Vol. 32 No. 3, pp. 221-40.
90. Rugman, A.M. and Collinson, S. (2004), "The regional nature of the world's automotive sector" European Management Journal, Vol. 22 No. 5, pp. 471-82.
91. Simister, J. (2004a), "Saab's Future," 4Car Writes Series, Channel 4 (UK), 28 September, available at: www.channel4.com/4car/ feature/features-2004/saab-future (4 October 2004).
92. Simister, J. (2004b), "Is GM selling Saab short?"', The Independent, 10 August, available at: http://motoring.independent.co.uk/ features/story.jsp?story=549737 (accessed 11 August 2004).
93. Simon, B. and Mackintosh, J. (2005), "Hyundai wins 'most reliable' ranking in US", Financial Times, 7 March, Available at: http://news.ft.com/cms/s/2cc10586-8eae-11d9-8aae-00000e2511c8.html (10 March 2005).
94. Smith, D.C. (1998), "Is bigger really better? DaimlerChrysler merger faces hurdles", WardsAuto.com - Primedia Business Magazines and Media, 1 June, available at: http://waw.wardsauto.com/ar/ auto_bigger_really_betterdaimlerchrysler/ (accessed 5 May 2005).
95. Smith, G. (2005), "Daimler reveals collapse in Mercedes profits", Financial Times, 10 February, FT.com, available at ProQuest (accessed 8 May 2005).
96. Soubbotina, T.P. and Sheram, K. (2000), Beyond Economic Growth: Meeting The Challenges Of Global Development, The International Bank for Reconstruction and Development/ The World Bank, Washington, DC.
97. Srinivasan, N. and Ratchford, B.T. (1991), "An empirical test of a model of external search for automobiles", Journal of Consumer Research, Vol. 18 No. 2, pp. 233-42.
98. Stones, J. (2004), "Crushed under the weight of car giants", Marketing Week, 23 September, p. 24.
99. Sutherland, I. (2005), in "Have your say on Jaguar's about turn," BBC Coventry and Warwickshire, available at: www.bbc.co.uk/ coventry/content/articles/2004/12/16/city_jag_pull_out_feature.shtml (1 April 2005).
100. Urde, M. (2003), "Core value-based corporate brand building", European Journal of Marketing, Vol. 37 Nos 7/8, pp. 1017-40.
101. Vigneron, F. and Johnson, L.W. (2004), "Measuring perceptions of brand luxury", Brand Management, Vol. 11 No. 6, pp. 484-506.
102. Vlasic, B. and Stertz, B. (2000), Taken For A Ride: How Daimler-Benz Drove Off with Chrysler, HarperCollins Publishers, New York, NY.
103. Ward's Auto World (2003), "Luxury Share of U.S. Market Growing", WardsAuto.com - Primedia Business Magazines and Media, 1 August, available at: www.findarticles.com/p/aricles/mi_m3165/is_8_39/ ai106587386 (9 October 2004).
104. What Car (2005), "J.D. Power Survey 2005", What Car, 14 April, available at: www.whatcar.com/News_SpecialReport.asp?NA_ID= 214562&EL_ID=312 1181 (accessed 22 April 2005).
105. Whitley, R.L. (1932), "The case study as a method of research", Social Forces, Vol. 10 No. 4, pp. 567-73.
106. Yamawaki, H. (2002), "Price reactions to new competition: A study of US luxury car market 1986-1997", International Journal of Industrial Organization, Vol. 20 No. 1, pp. 19-39.
107. Yin, R.K. (2003), Case Study Research: Design and Methods, Sage, Thousand Oaks, CA.