BUSINESS RESEARCH METHODS

REPORT ON

SERVICE BRANDING AND EFFECT OF BRAND LOYALTY

1. INTRODUCTION 1.1 Service brand identity: definition, measurement, dimensionality and influence on brand performance According to Keller (1993), most researches on brand have been so far focused on consuming goods especially on understanding the effects of brand awareness. There is an emerging trend on branding which is as same as service logic in concentrating on added value processes. In such view, brand plays a broader role so it is related not only to end users but also to company, its employees and its shareholders. Research papers call this broader perspective of branding as service brand. Creating and maintaining brand identity is regarded as a formative brand building step with the benefits contributing to the creation of valuable brands. Consequently, research that provides brand identity management insights has the potential to be of considerable academic and managerial interest. Several brand identity frameworks have been published in the brand marketing literature. However, a reliable, valid and parsimonious brand identity scale has yet to be developed. This has restricted the academic community and practitioners from obtaining an empirically informed understanding of the constructs dimensionality and influence on brand performance. Furthermore, the generic nature of these frameworks does not account for a specific goods or services context. Informed by these issues, a valid, reliable and parsimonious service brand identity scale was developed to reveal the constructs dimensionality and assess its influence on brand performance in the UKs IT service sector. A quantitative research design was employed to gather primary data with 421 senior executive working in the UKs IT service sector. Following a series of pretests and a pilot study, Cronbachs and exploratory factor analysis were used to purify the measure. Confirmatory factor analysis then helped verify the exploratory factor structure and establish the
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psychometric properties of the scale. These analyses find support for a service brand identity scale comprising of five dimensions: employee and client focus, corporate visual identity, brand personality, consistent communications and human resource initiatives. The service brand identity scale is then incorporated into the full structural model to assess the constructs influence on brand performance. Across the calibration, validation and full samples service brand identity has a positive and significant (p<0.001) influence on brand performance. The discussion outlines how these findings provide partial support for the dimensionality implied by existing conceptual brand identity frameworks. Furthermore, the data provides encouraging results for those that wish to invest in brand identity given the constructs positive and significant influence on brand performance. Concluding remarks highlight theoretical and managerial implications with limitations and directions for future also being noted. 1.2 EFFECT OF BRAND LOYALTY Despite of remarkable interests in the nature and role of marketing application from servicing perspective, there are limited researches on service branding. By describing four major aspects of service branding, present study studies these aspects and their impacts on service conceived quality and finally it investigates the impact of service conceived quality on customer loyalty. Represented model includes the impact of brand traditional image along with other three impacts, that is, company image, employees confidence and companys confidence. By using a 104-subject sample of Asia Insurance Companys customers, the analyses show that brand image and companys image have direct and positive impact on service conceived quality while a significant relationship is not seen between company confidence and employees confidence with service quality. Finally, the aspects of service brand impacts indirectly on customers loyalty via impacting on service conceived quality.
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During the last couple of decades, brands have become an increasingly important part in companies marketing strategy due to the fact that they are seen as valuable assets and a primary source of differentiation. In this sense, many academics have developed theoretical models that help to understand the relationship between consumers and their brands. Branding is an important concept in trading activities and academic researches. It is for the same reason that successful brands help market-owners to acquire a competitive advantage which includes opportunities to increase market share successfully, resilience against competitors developmental pressures and the capability to create entry barriers for rivals. Branding mitigates customers risk feeling during buying the services. Brand value in trading markets plays a major role under some aspects of trading exchanges. Researches show that brand value is a strong survival stimulant for consuming, industrial and servicing markets. Service organizations are continually looking for ways to increase customer loyalty. The health club and fitness industry is a growing service industry that depends on the continuing relationships of its customers for continued success. It is also a long-term repeat purchase business, where a high degree of involvement from the customers is necessary. 2. LITERATURE REVIEW As the first part of the literature review, this will serve as an introduction to the fundamental principles of branding by outlining what brands are and why they are becoming so increasingly valuable in todays consumer markets. More specifically, this section will emphasize the importance to consider the customers perspective when trying to understand how branding ultimately works. In this respect, two essential branding models are discussed in order to

explain the way in which individuals evaluate and make sense of brands before the brand loyalty construct is highlighted as a key consumer response variable. 2.1. The Value of Brands According to the American Marketing Association (AMA), a brand is defined as a name, term, sign, symbol or design, or a combination of these, intended to identify the goods or services of one seller or group of sellers, and to differentiate them from those of a competitor .While a brand might initially start its life with nothing more than a distinctive name, over time it is getting recognized by consumers for its functional capabilities and ultimately develops into a shorthand notation that is associated with several unique values (de Chernatony & DallOlmo Riley, 1998). As such, a brand is argued to be one of the most essential concepts in the world of marketing due to its ability to create a perception of superiority in consumers minds (Levine, 2003). From a customers point of view, brands are seen as purveyors of advantages in terms of both economic and symbolic values (OCass & Grace, 2003) In this respect, brands not only serve as a rich source of information which might signal the quality of a product and reduce consumers search costs and risks of transaction (Biswas, 1992; Janiszewski & van Osselaer, 2000) but they might furthermore act as a symbol that directs meaning to the consumer and hence represents a form of promise regarding future purchases (Keller, 1998). On the other hand, brands have also become an integral part in most companies marketing strategies since they are increasingly understood as valuable assets and a major source of competitive advantage (OCass & Grace, 2003; Skinner, 1990 in Grace & OCass, 2002). 2.2. Brand Evaluation and Consumer Response It is a common assumption that brands differentiate themselves based on the fact that they excel on particular aspects and hence there has been a growing
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interest by managers and marketers to understand the components of a brand and how these are perceived by consumers (de Chernatony & DallOlmo Riley, 1998). As an extension of their earlier proposed atomic brand model, de Chernatony and DallOlmo Riley (1998) therefore developed their Double Vortex Brand Model (Fig. 2.1) in an attempt to illustrate the process by which customers perceive and, as a consequence, behave towards brands. Their framework has been validated by extensive interviews with brand consultants and practitioners who generally assumed a brand to consist of both functional capabilities (i.e. tangible, rationally assessed performance) as well as symbolic features (i.e. intangible, emotionally assessed values). Overall, the model addresses branding from the perspective of both the organization (left vortex) and the end consumer (right vortex) indicating that brands are originally created by a firm. As such, a companys inherent mission and values are expected to strongly shape a brands development. However, while managers and marketers consider a brand to encompass various interrelated elements (e.g. band as legal protection, brand as risk reducer), de Chernatony and DallOlmo Riley (1998) stress that a brand is ultimately perceived and made sense of in the consumers minds by assessing a product based on the confidence they have in the specific brand being the right choice (i.e. consumers as benefit seekers). These confidence evaluations, in turn, are not only believed to be derived from a brands rational (e.g. price-performance characteristics) and emotional (e.g. psychological and social benefits) dimensions but their importance is also supposed to differ among certain types of products and with varying degrees of consumers previous experiences.

Although brands might initially be created and developed by an organization, it is often believed that a brand primarily rests and exists within a consumers mind (Grace & OCass, 2002). As a consequence, marketers and managers who aim to succeed in branding not only need to understand how consumers make
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sense of a brand and how they formulate brand images and associations but, more importantly, to what extent specific brand associations might influence their ultimate attitudes and behaviours. a customers brand knowledge is basically comprised of two components, namely brand awareness and brand image. While the former merely refers to a consumers familiarity with and awareness of an offering, the latter has been ascribed a more important position and is related to a persons overall perception or mental picture of the brand. a brands image must be understood in terms of customers brand associations which are defined as anything linked to a brand in memory. (Aaker, 1991, p.109) and which can be formed from consumers own direct experience with the brand (e.g. purchase, consumption) or via the image portrayed through a variety of marketer-controlled and uncontrolled communications. In order to explain how brand associations ultimately influence consumers behavior, linked a customers overall brand knowledge with the concept of brand equity. Defined as the differential effect of brand knowledge on consumer response to the marketing of the brand, brand equity requires customers to be aware of and familiar with the offering (brand awareness) and to hold favorable, strong and unique brand associations (brand image). As such, brand equity might similarly be understood as a products extra value embedded in its brand name. However, besides merely consisting of consumers brand perceptions in the form of brand awareness and associations. Aaker (1996) and Chen and Chang (2008) emphasize customer behavior as another key dimension of customer-based brand equity based on the fact that brand attitudes and loyalty(purchase intentions) have often been used as surrogates of this concept. In this respect, brand loyalty has been referred to as a consumers deeply held commitment to rebuy or repatronize a preferred product/service consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behaviorOverall, it
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can thus be noted that brand loyalty and brand attitude are significant consumer response variables which might lead to superior brand performance outcomes such as greater market shares, favourable word-of-mouth, repeat sales and customers willingness to pay premium prices by being mediated through brand equity.