CRITIQUE - Branding Equity in services

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Filip Prodanovic                 MG5570 Understanding Business Research Methods        0411825

Brand equity: is it more important in services?

1.0 SUMMARY

The authors introduce their research problem by highlighting one of the definitions of brand equity as “added value endowed by brand to the product”. Subsequently, they inform us of how despite equity in the marketing of products expands, little research has been done on equity in the context of services marketing. According to the authors, the main objective of this study is to assess brand equity in the marketing of services and to make a comparison between the latter and brand equity for products.

The literature review is started by defining a brand as “a name, term, sign, symbol, or design, or combination of them which is intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors” (Kotler, 1991, p. 442). We are then informed on how consumers make use of the brand to identify certain qualities in a product. Afterwards, we are presented with different conceptual schemes that connect brand equity with different consumer response variables. We have schemes from Aaker (1991), Keller (1993) and Alba and Hutchinson (1987).

Further ahead we are informed that most of the research done in the area is conceptual in nature. Berry (1988) and Onkvisit and Shaw (1989) hold an academic debate in the sense that Berry (1988) suggests that service brands should have “distinctiveness, relevance, memorability, and flexibility” and that “service brands should be the firm’s name and should not be individualised”. On the other hand, Onkvisit and Shaw (1989) support individualisation.

Further in the study it is suggested that each product or service possesses attributes of search, experience and credence. Search attributes are those that can be determined prior to purchase; experience attributes are those which can only be evaluated after purchase or during consumption and finally, credence attributes are those which cannot be determined even after purchase or consumption (Darby and Karni, 1973). Products tend to be stronger in search and experience attributes; services tend to be stronger in experience and credence attributes. This means that most services can only be evaluated during or after consumption.

The authors proceed to explain that depending on which is the dominating attribute, the level of importance of brand equity will vary. As search attributes make the service more tangible it also makes the purchase less risky for the consumer. For this reason, it is said that brand equity is most favourable when the service is dominated by experience and credence attributes. Berry (1986) suggests “tangibilizing” a service, which can be achieved through the use of a brand name.

Afterwards, the authors give some insight into the literature upon which they based their following research questions:

Q1 Is brand equity more important for services than for goods? 

Q2 Does the importance of brand equity differ among credence-dominant, experience-dominant, and search-dominant services?

Q3 As espoused in the literature, is brand equity more important for credence-dominant services than for experience-dominant services?

Q4 As espoused in the literature, is brand equity more important for experience-dominant services than for search-dominant services?

Q5 Irrespective of product type (good or service), does knowledge about the product category affect the importance of brand equity in that category?

Subsequently, in the pre-test, the authors used a sample of 65 undergraduate students to determine whether they could perceive differences in search, experience and credence attributes in the services presented. The participants were given a list of 25 services and were asked to indicate their ability to judge the performance of each service prior to purchase. The participants were then given a second page in which they would indicate their ability to judge the service’s performance after purchase. The services which had achieved a high score in both scales were considered search-dominant. Those which achieved a low score on the fist scale and a high score on the second were considered experience-dominant because that meant that performance could not be determined before purchase. Finally, services having scored low in both scales were considered credence-dominant. The validity of the test was established considering that none of the services were signalled as easy to evaluate before purchase and difficult to evaluate after consumption.

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After examining the results of the pre-test it was noticeable that there was a discrepancy between the consumer’s perception of a service and its attributes and that one suggested by the literature. A focus group was conducted in order to examine the issue of classification. After certain inconsistencies and misalignments were established, the questions were modified, and the research was implemented.

The authors, based on previous studies and literature, decided to measure brand equity both directly and indirectly using “strong” and “weak” brand names. They examined the differences between services and products through the use of questionnaires. Out of ...

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