Conglomerates : can an acquired company's image be affected adversely by the image of the parent company? : a case study
O'Neil, Jack W.
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International Telephone and Telegraph Corporation (ITT) acquired Bell & Gossett Company in 1963. Bell & Gossett was by far the leading company in the hydronics heating and cooling market (hot water/chilled water systems), with an estimated market share at that time of approximately 65 to 70 percent. Subsequently, ITT received negative media coverage in the 1960s and 1970s for a variety of reasons. Four brand awareness and opinion studies were conducted of Bell & Gossett's primary customers, plumbing and heating contractors, from 1968 through 1971. These studies uncovered a negative attitude towards ITT that was adversely affecting Bell & Gossett's own image with its customers. A follow-up opinion study conducted in 1980 using personal interviews clearly indicated that this negative attitude toward ITT was continuing to grow with a corresponding growth in the negativism displayed towards Bell & Gossett since it was owned by ITT. ITT then launched a public relations program with all of its major publics to offset this negative publicity that began in the late 1970s and continued throughout the 1980s. Follow-up brand awareness and opinion studies were conducted in 1987 with this same Bell & Gossett customer group to determine if the negative attitude towards ITT was still impacting adversely on Bell & Gossett. The 1987 study results contained little or no negative attitude toward ITT and its ownership of Bell & Gossett. This series of studies demonstrated two conclusions: 1. A conglomerate's image can adversely affect the reputation of its acquired companies. An effective public relations program can offset negative publicity and transform a negative attitude into a positive one.