Glossary of Branding Terms
What is a merger?
The fusion of two companies to form a new company. The question that always arises is, under which brand the future joint organization should operate, and how products and services will be branded in future.
Why is branding crucial in a merger?
Brands play an important role in purchasing decisions: depending on the product and business segment, the brand contributes between 10 and 90 percent to the purchase. This is why the topic of “brand” is crucial for future business success when preparing and implementing a merger.
What is the role of the corporate brand in a merger?
The corporate brand plays a decisive role in both integration and differentiation, because it can unite – or divide – merged companies. A shared corporate brand is the simplest and at the same time strongest lever for creating a new, shared identity, and for developing a future-oriented corporate culture that unites former competitors into a new, powerful team.
What is the brand strategy for a merger?
Depending on the circumstances, different strategies can be considered for the corporate brand in a merger:
What is the most promising brand strategy for a merger?
A merger – or fusion – usually aims to integrate two companies, in order to realize synergies, and to increase market share. The question to be answered is whether the integration of the two companies will improve competitiveness or whether the partners will become more successful if they continue to compete under separate brands in the market.
How to select the right brand strategy for a merger?
In order to make an informed decision, it is worthwhile carrying out detailed studies of the two corporate brands and identities. A brand equity study can, for example, clarify in depth which brand possesses stronger customer loyalty or which brand can be expected to act as a strong growth driver. A comparison of classic dimensions such as market share, awareness and preference can also be helpful. Hard criteria are ownership structure, legal situation and strategic goals, e.g. portfolio management or planned divestments. Examining soft criteria requires a professional assessment, supported by fact-based studies where necessary.
The assessment focuses, for example, on:
The assessment of global brand protection should not be neglected.
How to conduct a branding process within a merger?
A structured brand management process accompanies the merger along the classic M&A phases: from due diligence and strategy development to implementation. The focus is on aspects that measurably contribute to value creation, in particular profitability, market share, and reputation and image. Tried and tested tools and processes are available for this purpose. For example, parallel prototyping can be used to examine which brand strategy will be efficient and create value for the company using different scenarios.
Curious for more?
Discover how strategic branding creates value in a merger:
https://markenfels.ch/en/thought-leadership/brand-integration/
https://markenfels.ch/en/thought-leadership/the-markenfels-merger-acquisition-brand-navigator/
