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MIP
41,1
48
Received 21 February 2022
Revised 11 July 2022
28 July 2022
Accepted 28 July 2022
Marketing Intelligence & Planning
Vol. 41 No. 1, 2023
pp. 48-61
© Emerald Publishing Limited
0263-4503
DOI 10.1108/MIP-02-2022-0074
Mergers and acquisitions success:
examining customer loyalty

Paula Alvarez-Gonzalez
Department of Business and Marketing, University of Santiago de Compostela,
Santiago de Compostela, Spain, and
Carmen Otero-Neira
Department of Business and Marketing, University of Vigo, Vigo, Spain
Abstract
Purpose – Mergers and acquisition are a very common part of business strategy. However, it is not clear if and
how these processes affect customers. This study aims to assess banking M&A from the marketing
perspective, by analyzing its impact on the customer loyalty.
Design/methodology/approach – The study employed a purposive sampling method for collecting data
from 232 respondents using a self-administered questionnaire. Variance-based structural equation modelling
(PLS-SEM) was used for testing the proposed structural model.
Findings – Results show that M&A integration does influence customers’ perception of key variables like
customer–company relationship, and their loyalty after the M&A. Findings highlight the relative importance of
these variables and the potential influence of some moderators (customer orientation, speed of integration and
communication). The most important antecedent of loyalty in a M&A situation is service quality followed by
company image, products and prices, sales channels and sales force.
Originality/value – This paper explores the impact of M&A on clients by using customer survey data, an
area that is still an under-explored field, in relation with the total number of articles on M&A that are published
each year.
Keywords Mergers and acquisitions, Customer loyalty, Marketing integration, PLS-SEM
Paper type Research paper
1. Introduction
The global banking structure has undergone an unprecedented change during the past
30 years. Specifically, horizontal mergers and acquisitions (M&A), that is, agreements that
take place between companies that operate with the same industry (Rahman and Lambkin,
2015), have become greatly popular.
However, there is growing evidence that firms do not always obtain gains after the M&A
activities. In denoting so, it has also been argued that M&A can be value-destroying and can
adversely impact the firm’s stakeholders (Rahman and Lambkin, 2015). Specifically, M&A is
considered a critical moment in the customer–firm relationship and the M&A integration,
known as “the level of similarity achieved between two firms’ marketing systems, structures,
activities, and processes” (Homburg and Bucerius, 2005, p. 96), has the potential to affect both
positively and negatively on marketing-related issues such as products and prices (Krishnan
et al., 2004), service quality (Urban and Pratt, 2000), sales force (Bommaraju et al., 2018), sales
channels (Homburg and Bucerius, 2005), firm image (Chung and Kim, 2020) or loyalty
(Williams et al., 2020) and thus, influence the value creation to consumers (Rahman and
Lambkin, 2015) and the long-term financial performance (Swaminathan et al., 2014).
In spite of the relevance of marketing issues and firm–consumer relationships to create
value and improve firm’s results after a M&A, marketing scholars are not very familiar with
the issue of M&A (Yu, 2013) and research on this issue is still very limited within the
Funding: This research did not receive any specific grant from funding agencies in the public,
commercial or not-for-profit sectors.
marketing context. Indeed, literature has stressed the need to consider the marketing Mergers and
perspective while retaining clients and determining consumer’s reactions in M&A contexts customers
(Bauer et al., 2020; Christofi et al., 2017).
This research analyzes the M&A as an event with the potential to modify the basis or
components of the relationship established between the bank and its customers with the
objective of understanding the effect of the M&A on customer loyalty. This objective
addresses previous research suggestions to “focus the research on the ways marketing could
minimize the negative consequences that occur from M&A activity, such as loss of consumer 49
loyalty” (Christofi et al., 2017, p. 643) and the study of external stakeholders and nonfinancial
factors affected by M&A “may explain the reason why decisive factors for M&A success are still
elusive” (Kato and Schoenberg, 2014, p. 336).
Previous research on this issue contains only a limited focus on understanding consumer’s
reaction to M&A and presents several limitations as it is either a case study research, which
limits the generalization of results (Alvarez-Gonzalez and Otero-Neira, 2019; Kato and
Schoenberg, 2014), or it considers a limited number of marketing variables (Chung and Kim,
2020; McLelland et al., 2014) or it does not use customer survey data (Bauer et al., 2020; Homburg
and Bucerius, 2005). To address these gaps, this study tested a model to understand the effect of
post-M&A marketing integration on customer loyalty. Specifically, this study extends the
knowledge on the relative importance of changes – positive and negative – in five marketing
variables that affect the customer–company relationship and, finally, the customer loyalty after
the M&A based on the customers’ perspective, as suggested by recent research (Bauer et al.,
2020; Christofi et al., 2017). Moreover, acknowledging King et al.’s (2004) suggestion to search
for new potential moderators to enhance the knowledge on this issue, this work addresses the
potential role of three moderating variables in that relationship as displayed in Figure 1.

2. Theoretical framework
In a relational marketing context, the goal of any organization is to know what individuals
want and require developing the firm’s strategy based on their needs, concerns and values

Customer perceptions Customer attitudes and

behaviors
Marketing integration

Products and
prices

Service
quality
Integration outcomes

Sales M&A Customer

force perception loyalty

Sales
channels
Customer orientation
Speed of integration
Image Communication
Figure 1.
Research model
MIP (Ndubisi, 2007). This is also true in the financial industry. Indeed, banks and other financial
41,1 entities try to deliver value, satisfaction and retain their customers’ loyalty by designing
products/services, fixing the prices, establishing traditional and/or online distribution as well
as creating communication channels with their clients (Lewis and Soureli, 2006).
There are many factors that bank consumers consider when first choosing and later
developing a long-lasting relationship with a financial institution, such as: trust,
communication, availability of alternatives, honesty/ethics of the firm, innovation, location,
50 geographical proximity, tradition or habit or even the social influence. Moreover, after the
first transactions, the formation and development of customer loyalty will depend on
different factors such as: service quality and service attributes, image or interpersonal
relationships with bank sales force (Lewis and Soureli, 2006; Miguel-Davila et al., 2010;
Ndubisi, 2007; Saleh et al., 2013).
Both loyalty and its drivers are dynamic phenomena. This refers to those factors that
make loyal customers change over time. However, there might be other uncontrollable
situational factors such as organizational changes such as M&A. A merger refers to a
combination that forms one economic unit from two or more previous corporations (Hossain,
2021). An acquisition refers to the buying by one corporation of another entire corporation
(Capron, 1999). From a process perspective, M&A are described from the first decision to
conduct a M&A throughout the integration. Integration includes managerial actions, such as
planning of structural changes and executing changing activities, taken to combine the
previously separate firms (Bodner and Capron, 2018). Those actions include operational,
marketing, R&D, manufacturing, managerial or financial consolidation (Capron, 1999), and
create a commercial environment that will determined the future of the customer–company
relationship after the M&A (Kato and Schoenberg, 2014).

2.1 Marketing integration and loyalty

In this research, the integration decisions in horizontal M&A are consistent with the resource-
based view of the firm and the efficiency theories (Capron, 1999). Thus, the duplicities derived
from the similarity between the merged companies create a process of resource
reconfiguration in a more effective and efficient way in order to create the desired
performance outcomes (Bodner and Capron, 2018).
The process of integration involves decision-making regarding the degree of
consolidation and harmonization of marketing variables at strategic and organizational
levels. This applies to products and services offered, prices, sales channels or firm image
as they are all key aspects in the firm’s relationship with its customers and, therefore,
will affect the clients’ overall perception of the firm after the M&A process and will drive
the changes in customer loyalty (Homburg and Bucerius, 2005; Kato and Schoenberg,
2014). Loyalty represents the customer’s rejection of changing buying habits and
constitutes one of the indicators of outcomes of M&A and the firm’s success (Nguyen and
Leblanc, 2001).
2.1.1 Products and prices. Post-M&A integration offers the firm with the opportunity to
reconfigure its product portfolio as well as its product prices (Krishnan et al., 2004). The
merged firm can refocus on attractive product lines and offer an enhanced or extended
product range (Alvarez-Gonzalez and Otero-Neira, 2019), more favorable prices (Fee and
Thomas, 2004), simplify purchasing processes (Anderson et al., 2001) or cross-selling
(Houston et al., 2001; Rahman and Lambkin, 2015). Certainly, improving firm’s products and
prices after the M&A could affect positively on the client’s loyalty and market share of the
firm (Krishnan et al., 2004; Swaminathan et al., 2014).
On the opposite, it can also be argued that the M&A can worsen the product portfolio and
prices in relation with the one before the M&A by standardizing or reducing the products/
services offerings and increasing prices (Alvarez-Gonzalez and Otero-Neira, 2019; Anderson Mergers and
et al., 2001). In this case, it can thereby cause a negative reaction from the customer (Houston customers
et al., 2001).
2.1.2 Service quality. Company services refer to those actions firms undertake to assist
their customers (Miguel-Davila et al., 2010). M&A could affect the level of service quality.
Literature suggests that M&A can lead to improvements in service quality through the
efficient use of resources, learning opportunities and the flexibility provided by a larger
combined pool of resources (Prince and Simon, 2017). Alternatively, it has also been 51
suggested that M&A can cause disruption in customer quality service occurring from delays
in service delivery or lack of information (Urban and Pratt, 2000). Considering the well-known
marketing relationship established between service quality and loyalty, especially in the
banking sector (Miguel-Davila et al., 2010), the positive or negative perception of the quality of
the service after the M&A will lead to a reassessment of the relationship with the firm post-
M&A, resulting in a potentially direct positive, or negative, effect on loyalty (Bauer
et al., 2020).
2.1.3 Sales force. The post-M&A integration involves the decision on what to do with the
combined firm’s sales force (Bauer et al., 2020). The sales force is a very visible resource for
customers and an accurate integration of salespeople is quite significant to ensuring revenue
growth (Bommaraju et al., 2018). If this integration damages the sales force’s relationships
with the firm or entails work force reduction, this can also affect the firm’s relationship with
its consumers because they could assume that the combined organization would not be well-
equipped to provide the range of services (Capron and Hulland, 1999; Homburg and
Bucerius, 2005).
Several researchers such as Chun and Davies (2010) have suggested that the loyalty
reduction after the merger can be minimized if the sales force is pleased after the M&A and
service staff is maintained. This is particularly true in the service context where the relational
interaction with their consumers is a key element of the business itself (Alvarez-Gonzalez and
Otero-Neira, 2019). Besides, the integration of the sales force can also lead to an improvement
in the service offered if the combined firm maintains the sales force with a stronger
relationship with customers (Capron and Hulland, 1999).
2.1.4 Sales channels. Post-M&A integration allows companies to more effectively
reconfigure their sales offices and distribution channels (Bauer et al., 2020). Reordering the
distribution system after the M&A can enhance market coverage and improve consumer
perception and loyalty because of the increase in the number of bank offices when both sales
channels are complementary (Homburg and Bucerius, 2005; Rahman and Lambkin, 2015).
But, M&A may increase efficiency through closing facilities and branches (Houston et al.,
2001; Rahman and Lambkin, 2015). However, branch closures are more likely to lead to
customer shifts because it implies moving customer accounts to the nearest office (Alvarez-
Gonzalez and Otero-Neira, 2019; Kato and Schoenberg, 2014), constraining supply choice
(Anderson et al., 2001), worsening service attributes of the combined firm (number and
placement of the bank offices) and, as a result, could negatively affect the customer’s loyalty
arising from not owning these facilities (Krishnan et al., 2004).
2.1.5 Image. M&A activity has the potential to modify the corporate identity of the firm
(Clark et al., 2010). After the M&A, the integration of companies usually includes changes in
strategic objectives, firm values, brands and corporate logo design affecting the corporate
identity (Balmer and Dinnie, 1999) and, consequently, the image that the stakeholders have
about the firm post-M&A (Clark et al., 2010).
M&A can have positive effects on the customers’ image of the firm post-M&A and,
therefore, on their loyalty (Lewis and Soureli, 2006) if the consumer perceives continuity in the
corporate identity (Clark et al., 2010) or perceives a good fit between brands. That is, if both
brands have positive associations or the M&A is perceived as an opportunity for enhancing
MIP image though brand strength, learning from CSR practices and experiences or better
41,1 reputation (Chen et al., 2022; Chung and Kim, 2020; Lee et al., 2011; McLelland et al., 2014).
Inversely, by merging two entities there can be a decline in the firm’s corporate image if
the consumers think that the merging companies do not fit (McLelland et al., 2014) or if those
key aspects of the image are neglected or damaged, such as the firm’s attitude towards CSR
(Chen et al., 2022) or its reputation (Chung and Kim, 2020). The neglect of corporate identity
issues after the M&A could explain the rate of failure of the M&A and the negative
52 consumers’ reaction to it, especially among those who were closely identified with their
original firm or showed favorable brand associations before the M&A (Balmer and Dinnie,
1999; Lee et al., 2011).
In this research, we define “perceived marketing integration” as the perception that the
consumer has about the improvement, or worsening, after the M&A and compared to the
previous situation, in relation with the following marketing variables: (1) products and prices,
(2) quality of the service, (3) sales force, (4) sales channels and (5) image. This perception after
the M&A compared with pre-merger has a great potential to impact on the customers’ loyalty
(Kato and Schoenberg, 2014). Therefore, we posit that:
H1. Perceived marketing integration has a significant effect on customer loyalty.

2.2 Potential moderators

The relationship between the M&A activity and the M&A outcomes is moderated by
different variables. From a customer perspective, the customer reconfigure company
relationship during M&A processes can be affected by the great amount of information,
rumors, ambiguities, uncertainties and fears about the future relationship of any
stakeholders with the combined firm (Balmer and Dinnie, 1999). Thus, factors such as the
consumer perception regarding the firm’s communication along the process, the firm’s
customer orientation when decision making, or the speed at which changes occur have been
identified as key to mitigate the effects of the M&A and, thus, could moderate the relationship
between the consumer perception of the post-M&A marketing integration and the loyalty of
the consumer after the M&A (Bauer et al., 2020; Homburg and Bucerius, 2005).
2.2.1 Customer orientation. Customer orientation is understood as the degree by which the
management of the firm keeps in mind the customer and other external stakeholders needs
during the M&A process (Homburg and Bucerius, 2005). Literature suggests that if
customers perceive a high level of consumer orientation of the companies during the M&A,
this could mitigate the negative impact of the M&A on the customer loyalty by building trust,
reducing uncertainty, dissatisfaction and defection (Homburg and Bucerius, 2005). It is
reasonable to assume that M&As that are justified in terms of improvement for customer
service and satisfaction and not in terms of cost savings, make customers to react better to the
merger (Kato and Schoenberg, 2014). Thus, in the case of high rather than low perceived
customer orientation, the effect of the perceived marketing integration on customer loyalty is
more positive.
In so, we posit:
H2. Perceived customer orientation during the M&A positively moderates the
relationship between perceived marketing integration and consumer loyalty.
2.2.2 Speed of integration. From a behavioral psychology perspective, the fast speed of
integration of marketing is considered beneficial in terms of market-related performance
(Homburg and Bucerius, 2005, 2006). If the customer perceives that decisions taken to
integrate the product offerings, prices, distribution channels or strategy are taken and
implemented quickly, and this might reduce the disruption and uncertainty regarding his/her
future relationship with the firm and then, minimize the possible negative effects of the
marketing integration in the loyalty (Homburg and Bucerius, 2005, 2006). This relationship is Mergers and
even stronger when companies share similar characteristics as in the case in horizontal M&A customers
(Homburg and Bucerius, 2005).
Complementing these authors’ arguments, we propose that perceived fast speed of
integration may contribute to reinforce the positive effect of the perceived marketing
integration on customer loyalty.
Thereby, we posit:
53
H3. Perceived fast speed of integration during the M&A positively moderates the
relationship between perceived marketing integration and consumer loyalty.
2.2.3 Communication. Communication is a basic tool for any organization that undertakes
significant changes (Balmer and Dinnie, 1999). In fact, it can be considered as one of the most
important factors in any M&A process (Gomes et al., 2013). Previous research findings
conclude that a truthful, up-to-date, clear, timely, current and real communication with the
firm’s stakeholders during the M&A is key to the success of the integration and, at the end,
the outcome of the M&A (Gomes et al., 2013) as, indeed, a suitable communication mitigates
any possible negative effect of the M&A (Williams et al., 2020). Hence, it is reasonable to
assume that perceived marketing integration has a more positive influence on customer
loyalty in customers that perceive a suitable communication during M&A.
Consequently, we suggest:
H4. Perceived suitable communication during M&A positively moderates the
relationship between perceived marketing integration and consumer loyalty.

3. Method
3.1 Design and participants
The target population for this study was identified as all customers of the 48 banks and
saving banks that have merged between 2009 and 2015 in Spain. Data collection from
customer of merging companies is difficult due to data protection, thus limiting our
possibility of obtaining a representative sample (Kato and Schoenberg, 2012). For this reason,
a goal-directed sampling approach was adopted. In so, 500 questionnaires were sent between
January and June 2015, out of which 276 were completely returned. After an initial screening
process, the final sample includes 232 valid surveys (response rate: 46.4%). In total, 52.6%
were male. Majority of the respondents (58.2%) were aged between 40 and 59 years, whereas
37.5% were aged between 20 and 39 years and 4.3% were aged more than 60. A total of 87.5%
of the respondents have a relationship with the bank of more of 5 years. Furthermore, 32.3%
have had a conflict with their bank of which 77.3% complained to the entity.

3.2 Measures
Perceived marketing integration is conceptualized as a hierarchical construct composed of
five reflective first-order constructs (Van Riel et al., 2017). To measure each dimension, we
reviewed the previous literature on M&A and banking consumer behavior (Bravo et al., 2010;
Miguel-Davila et al., 2010). Customer loyalty was measured with four behavioral intentions
items adapted from Nguyen and Leblanc (2001) and Kato and Schoenberg (2012). A summary
of the scale items can be found in Table 1.
Customer orientation was measured by three items adapted from Kato and Schoenberg
(2014) (“I believe that the management of the firm has my interests in mind”; “I feel I can trust
my bank/savings institution” and “I believe that the entity would not make any decisions that
would be detrimental to me”). To measure speed of integration, one item of Homburg and
Bucerius (2005) was adapted (“The integration of the two entities has been done quickly”).
MIP Items Loading
41,1
Products and prices (AVE 5 0.62; CR 5 0.89; Alpha 5 0.89)
The wide range of banking products and services 0.81
The offer of different types of loans adjusted to my needs 0.80
The offer of high profitability rates 0.69
The prices of the available banking services 0.75
54 The value achieved compared to the money and effort I have invested 0.87
Service quality (AVE 5 0.61; CR 5 0.90; Alpha 5 0.90)
The quality service 0.92
Convenience number of hours the bank is open to the public 0.64
The effort to ensure the absence of errors in the execution of the service 0.80
Precision and clarity in explanations or information provided 0.81
The period of waiting for service delivery 0.71
Knowledge provided by the bank to use automated services 0.81
Sales force (AVE 5 0.71; CR 5 0.90; Alpha 5 0.91)
Tidiness and elegance of bank employers 0.70
Confidence transmitted by the bank personnel due to their honestly and decency 0.92
Knowledge of the bank personnel, necessary for rendering the service 0.87
Willingness to help of branch staff 0.87
Sales channels (AVE 5 0.66; CR 5 0.85; Alpha 5 0.85)
Number of branches of the entity 0.82
Proximity of the branch to my workplace or to my home 0.75
Convenient location of the bank 0.87
Image (AVE 5 0.62; CR 5 0.89; Alpha 5 0.89)
The firm dedicates a lot of effort to carrying out social, charitable and cultural actions 0.74
The firm is committed to the environment 0.77
The firm is committed to society in general 0.83
Financial solvency 0.73
Reputation 0.87
Loyalty (AVE 5 0.74; CR 5 0.91; Alpha 5 0.92)
I feel great loyalty to my entity 0.75
I have the intention to continue to do business with this firm 0.84
Table 1. When I need a financial service I go to this bank 0.91
Measurement I always recommend the firm 0.94
validation Note(s): CR: Composite reliability; AVE: average variance extracted; Alpha: Cronbach’s Alpha

Communication was measured using two items adapted from Appelbaum et al. (2007),
(“I have felt adequately informed about the effect it would have on my relationship with the
firm” and “I was informed on-time about the forthcoming changes and its effects”).
Responses to the questionnaire items were elicited on seven-point scales ranging from 1:
Much worse/totally disagree and 7: much better/totally agree.

3.3 Analytical methods

Data was analyzed using IBM SPSS Statistics version 24.0 and SmartPLS version 3.3.3
(Ringle et al., 2015). Partial least squares modeling was implemented as the study is
explanatory in nature and includes a complex model with a formatively specified construct:
“perceived marketing integration”. So, PLS-Sem is a best fit for this study.
Before performing PLS-SEM analysis, an assessment of the data quality and consistency
were performed.
4. Results Mergers and
4.1 Model assessment customers
Model assessment includes two stages. In stage 1, the model of all first-order constructs is
specified and estimated using PLSc in order to obtain consistent inter-construct correlations.
The objective is to test that every construct is sufficiently embedded in a nomological net.
Then, the model is assessed. For the measurement model, reliability and validity of the first-
order construct through Cronbach alpha, composite reliability (CR) and average variance
extracted (AVE) were assessed. As shown in Table 1, the alphas ranged from 0.85 for sales 55
channels to 0.91 for loyalty, in all cases above 0.7. CRs were all higher than 0.7 and the AVEs
were all higher than 0.5 (Hair et al., 2017). It could be deduced that there was internal
consistency and high reliability. The discriminant validity was assessed using the Fornell
and Larcker criterion and the HTMT criterion (Henseler et al., 2015). As shown in Table 2, the
correlations of the construct with its measures were higher than the correlations with any
other measures. Also, the values of HTMT were all lower than the stricter criterion of 0.85. As
such, the conclusion can be made that the respondents understood that the constructs were
distinct.
In stage 2, the standardized scores of the first-order constructs extracted in the stage 1 are
used as indicators of the second-order construct. Then, the model is estimated and assessed
(Sarstedt et al., 2019; Schuberth et al., 2020). The second-order formative measurement model
is evaluated based on the following: collinearity, statistical significance and relevance of the
indicator weights (Hair et al., 2017). The variance inflation factor (VIF) was used to evaluate
collinearity of the formative indicators. All VIF values are lower than 3 indicating that there
are no problems of collinearity. Indicator weights’ statistical significance and relevance are
assessed through bootstrapping procedure in order to guarantee the results (5,000
subsamples, BCa bootstrap, one-tailed) (Roberts and Thatcher, 2009; Hair et al., 2017).
All weights of indicators are significant except for employers. However, as suggested by
Roberts and Thatcher (2009) this indicator has been maintained in the model since its outer
loading is significant (Hair et al., 2017) and “omitting an indicator is omitting a part of the
construct” (Bollen and Lennox, 1991 p. 308).
Weights’ assessment indicates the relative contribution of each indicator to the construct.
So, service quality (0.39) and image (0.37) are the two variables that contribute the most to the
perception of marketing integration after the M&A followed by products and prices (0.23)
and sales channels (0.18), and, in the last place, sales force (0.06).
The adjusted coefficient of determination has been assessed as proposed by prior research
as a criterion to assess the structural model in explanatory research (Benitez et al., 2020).
Results show a R2 adjusted of 0.48 and an effect size of 0.93 considered as substantial in social
sciences research (Hair et al., 2017).These outcomes suggest that perceived marketing
integration had a positive effect on customer loyalty, hence, supporting H1 (Table 3).

1 2 3 4 5 6

1. Products and prices 0.78 0.65 0.44 0.39 0.61 0.58

2. Service quality 0.66 0.78 0.68 0.58 0.55 0.65
3. Sales force 0.44 0.69 0.84 0.46 0.43 0.47
4. Sales channels 0.39 0.59 0.47 0.81 0.55 0.53
5. Image 0.61 0.56 0.43 0.55 0.79 0.62
6. Loyalty 0.58 0.65 0.47 0.53 0.62 0.86
Note(s): Values on the diagonal: AVE; below the diagonal: square of the correlations between the factors; Table 2.
above the diagonal: Heterotrait-Monotrait (HTMT) Discriminant validity
MIP 4.2 Moderation analysis
41,1 Moderation analysis is aimed to “measure and test the differential effect of the independent
variable on the dependent variable as a function of the moderator” (Baron and Kenny, 1986,
p. 1,174). Following Becker et al. (2018) recommendations, we used the two-stage approach.
Our results show that the relationship between perceived marketing integration and loyalty
is positively moderated by perception of consumer orientation and by speed of integration but
not by communication, supporting H2 and H3 but not supporting H4 (Table 3).
56
5. Discussion
Despite a low success rate, M&A is the most important method of restructuring in business. Post-
merger integration needs to deal with obstacles related to customer retention as a key variable on
the success of the M&A, and marketing research should increase the effort to address this issue.
Building upon the previous literature, this study provides some new evidence on the effect
of marketing integration on consumer loyalty after M&A, from an empirical study of 232
consumers of merged banks.
Our explanatory research has revealed three main insights. Firstly, and in line with
previous research (Alvarez-Gonzalez and Otero-Neira, 2019; Kato and Schoenberg, 2012),
M&A plays an important role in affecting consumer–company relationships in the market.
Moreover, the results enable a deeper understanding of the role played by critical customer–
company variables through which M&A activity appears to exert their impact on customer’s
loyalty. This is important because, in the context of M&A, customer reactions are considered
a contributing factor to the M&A failure.
The most important customer relationship antecedent of loyalty in a M&A situation is
service quality followed by image, products and prices, sales channels and sales force. In line
with previous research, the study provided strong evidence that perceived changes in quality
of service is the decisive predictor for customer loyalty after the M&A (Alvarez-Gonzalez and
Otero-Neira, 2019; Kato and Schoenberg, 2012; Urban and Pratt, 2000).
Image changes as a result of M&A are also strongly related to loyalty and the final
outcome of the M&A. This result confirms previous research findings that the low result of
the M&A may be explained according to the point on how corporate image is not given
adequate attention (Balmer and Dinnie, 1999). Although previous literature have focused on
understanding how M&A affects corporate identity and the employee’s identification
with it (Clark et al., 2010), it is clear that the effects on the image will influence customer
reactions.
The perception of changes in sales channels also has a great influence on consumer loyalty
after M&A. The search for efficiency after M&A may imply changes in the sales channels.
This result confirms previous research that indicated that since the location or proximity of
the branch is one of the determining factors in choosing a bank (Saleh et al., 2013), a perceived

Proposed effect Path coefficient Effect size

Loyalty (R adjusted 5 0.48 )

2 ***

H1: Perceived marketing integration → Loyalty þ 0.69*** 0.93

Moderation analysis Beta Effect size
H2: Perceived customer orientation þ 0.14*** 0.05
Table 3. H3: Perceived fast speed of integration þ 0.09** 0.02
Hypothesis testing H4: Perceived suitable communication þ 0.01 0.00
results Note(s): *p < 0.1; **p < 0.05; ***p < 0.001
change in this factor will have a significant impact on consumer loyalty after M&A (Alvarez- Mergers and
Gonzalez and Otero-Neira, 2019). customers
M&A provides the combined firm with the opportunity to reconfigure its marketing mix
(products and prices). As pointed out by Krishnan et al. (2004), M&A reduces the constraints
that hinder the redistribution of resources and the change in the product portfolio. From the
consumers’ point of view, this distribution will entail an improvement in their loyalty if the
consumer perceives an improvement in the diversity of products or in the prices (Alvarez-
Gonzalez and Otero-Neira, 2019). Conversely, this will have a negative effect if they perceive 57
that the changes do not improve their situation pre-M&A.
Last, we demonstrated that the role of sales force, their knowledge and trust transmitted
during the M&A process, is a key factor to maintain consumer loyalty (Chun and
Davies, 2010).
Secondly, the PLS-SEM analysis revealed that the perception of deterioration/
improvement on the marketing variables impacts loyalty after M&A and can explain 48%
of its variation. This percentage is considered as substantial in social sciences studies given
that potential activities of competitors and non-bank-related factors that may influence
customer loyalty that are not included as variables in the model.
Thirdly, the relationship between customer perception of the merged organization and
customer loyalty was moderated by the confidence that the customer has on whether the
decisions the firm makes regarding M&A keep in mind the concerns and interests of the
consumer and not only the interests of the firm, and in the perception that the marketing
variables changes have been made quickly (Homburg and Bucerius, 2005). However, the
tempering role of communication in this relationship could not be supported in this work. In
showing so, the fact that the information that companies immersed in M&A processes
provide to their clients is usually massive, not personalized and, therefore, clients do not feel
they are well-informed (Alvarez-Gonzalez and Otero-Neira, 2019). This might explain that the
perception that the consumer has about the communication does not affect the relationship.

6. Managerial implications
These research findings have significant implications for marketing practices and senior
management. A key variable that explains why M&A does not achieve the stated objectives
is the integration risk in terms of the fact that integrating marketing activities is much more
difficult in practice than in theory. Companies involved in M&A processes should take into
account how this process will change aspects of their relations with their consumers which
they consider significant and thus, could provoke in them a negative reaction towards
the M&A.
M&A are a threat to the “status quo” established between the firm and the consumer. In
this sense, marketing efforts could minimize the negative consequences of the M&A,
specifically, the loss of consumer loyalty. The study findings demonstrate that changes in
services quality and the image of the firm are the variables that have a greater impact on the
customer’s loyalty towards the combined firm, making these areas worthy of special
attention. In this regard, managers should consider these issues in the due diligence phase in
order to understand the advantages and drawbacks the customer might perceive during this
process.
In fact, a high level of loyalty through the M&A will permit the firm to avoid costs of
attracting new customers. This is important because customer’s negative reactions can affect
the final effectiveness of the M&A process. For this, it is important for banks to include
customers as part of the process and give them the opportunity to influence the outcome. For
example, by retrieving consumer testimonies, understanding their attitudes towards the
M&A (support or disapproval), involving the consumers in the process of the new branding,
MIP doing the changes quickly in order to reduce the uncertainties about the future relationship
41,1 with the merging firms (e.g., uncertainty about service quality, products and prices, sales
force and sales channels).
While some service disruption may be inevitable, banks could also provide integrated
solutions; capitalize on the advances in online technology to improve home banking services
or improve their contribution to society in order to mitigate the effects of a bad image of the
M&A and the possible risks of the marketing integration on the customer relationship.
58

7. Limitations and suggestions for further studies

This study presents some limitations that can be addressed in further studies. First, it only
considers one service industry and one geographic area. Even the analysis of a single
industry avoids cultural biases and allows considering its particularities, future research
involving more industries and geographical areas will help in the understanding of the results
and even validating if these results can be applied to other contexts and other cultural
dimensions.
Second, we investigated past events and therefore the recollection bias may be a concern
(Bauer et al., 2020) as the study is based on the memory of the individuals and their capability
to discern or differentiate between the effects of the M&A itself and the effects that the
environment may have had on the activity of the firm. This issue is acknowledged and has
been considered within the data collection where it was reiterated that the responses should
be referred to the activity of the bank after the M&A and the changes perceived as a
consequence of this process. However, the results should be treated with caution.
In general, the impact of M&A on clients is still an under-explored field, in relation with
the total number of articles on M&A that are published each year. In doing so, and in line
with the suggestions made by Christofi et al. (2017) and Homburg and Bucerius (2005), we
consider that future research should develop more empirical studies that take into account
and analyze the role of marketing issues in the M&A process and by using customer survey
data. Future research could consider the role of other different variables in the model like
customers’ attitude towards the M&A as well as his/her beliefs or degree of involvement, the
switching costs or the availability of alternatives, in addition to other sociodemographic
variables.

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About the authors


Paula Alvarez-Gonz alez (PhD.) is an assistant professor at the Faculty of Economics and Business
Studies at the University of Santiago de Compostela (Posmark Group). Her research areas include bank
marketing, consumer behavior and employability; but her main line of research focuses on the analysis
of the impact of the processes of mergers and acquisitions on consumers in the banking sector. On this
subject she has published several articles and papers in international journals such as International

Journal of Bank Marketing and national and international conferences. Paula Alvarez-Gonz alez is the
corresponding author and can be contacted at: p.alvarez.gonzalez@usc.es
Carmen Otero-Neira (PhD.) is a marketing professor at the Faculty of Economics and Business at the
University of Vigo and member of the ECOBAS research group. Her main areas of research include
competitive strategy, new products, service marketing and tourism, as well as sales management. In this
area, in addition to participating in research projects, she is the author of publications in journals and
congresses. Her most recent research has been published in journals such as International Journal of
Contemporary Hospitality Management (2015), Leadership and Organization Development Journal (2016),
Journal of Business and Industrial Marketing (2016) and Journal of Business-to-Business Marketing
(2017), among others.

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