Single Brand with Multiple Country Images: The Effects of M&A and Offshoring on Apparel Brand Credibility and Prestige across Brand Tiers

Abstract

<p>Increasingly common practices in the global apparel industry are Cross-border Merger and Acquisition (M&A) and offshoring. When an apparel brand's country of ownership or made-in country is an "unexpected" country and mismatches with the brand image, what psychological reactions would occur in consumers' minds, and how would those reactions change brand credibility and prestige? Is consumers' reaction to the country image changes more severe to luxury brands than to mass market brands? Built on cognitive dissonance theory and social exchange theory, this experimental study examined how country image changes resulted from M&A and offshoring influence on consumers' perceived brand credibility and prestige, and to compare those effects by two brand tiers (i.e., luxury brands vs. mass market brands).</p>