The relationship between brand equity and firms’ performance in luxury hotels and chain restaurants Authors: Hong-bumm Kim, Woo Gon Kim Instructor: Kate Presenter: Lai, Yu-Chi 0
Content 1 Introduction 2 Literature Review 3 Method 4 Results 5 Summary and Conclusions 1
Introduction v Background of the Study § Brands have been increasingly considered as primary capital for many businesses. Although numerous local or global brands of different product categories have been employed to measure the brand equity, literature on brand equity within the hospitality industry has not been fully investigated. 2
Introduction v Background of the Study § Little empirical research actually demonstrated the correlation between brand equity and corporate performance in hospitality brands. 3
Introduction v Purpose of the Study to examine the possible relationship between customer-based brand equity and firms’ performance in the hospitality industry through an empirical study 4
Literature Review the customer-based perspective Brand Equity the financial perspective the combined perspective 5
Literature Review the customer-based perspective 1 a set of brand assets and liabilities linked to a brand, its name and symbol that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s consumers (Aaker, 1991) 2 the differential effect of brand knowledge on consumer response to the marketing of the brand (Keller, 1993) 3 four dimensions: brand loyalty, brand awareness, perceived quality, and brand image Aaker (1991, 1996) 6
Literature Review the financial perspective based on the incremental discounted future cash flows that would result from a branded products revenue over the revenue of an unbranded product (Simon & Sullivan, 1993) 7
Literature Review the combined perspective incorporating both customer-based brand equity and financial brand equity 8
Method 2 Surveys Luxury Hotels Chain Restaurants 9
Method for Luxury Hotels Instrument Intercept survey questionnaire Liker-type scale Place Kimpo airport South Korea Participants 840 Korean travelers for departure 602 (71. 7%) responded 513 questionnaires were used 303 men : 210 women = 59. 1% : 40. 9% the average = 35. 4 10
Method for chain restaurant firms Instrument Intercept survey questionnaire Liker-type scale Place Participants 950 Korean adults a large shopping mall the city of Seoul 409 questionnaires were returned 394 were usable 174 men : 220 women = 44. 2% : 55. 8% the average = 25. 3 11
Method Lodging Industry 12 Brands of Luxury Hotels Ritz-Carlton, Intercontinental, Westin Chosun, Marriott, Hyatt, Hilton, Lotte, Radisson Plaza, Ramada Renaissance, Sheraton Walker-hill, Shilla, and Swiss Grand Restaurants 13 Brands of Fast Food and Chain Restaurants Burger King, Pizza Hut, Little Ceasars Pizza, Hardee’s, Jakob’s, KFC, Lotteria, Mc. Donald’s, Popeye’s, Subway, Sbarro, Ponderosa, and Sizzler 12
Method Brand Equity Brand loyalty Brand awareness Perceived quality Brand image 13
Method v Hypothesis Customer-based equity and these four components in the hospitality industry will have a significant relationship with the performance of the firms of the corresponding brands. 14
Results A B All four dimensions are found to construct brand equity in chain restaurants. Perceived quality is most important and brand awareness is least significant for establishing brand equity in luxury hotels. 15
Results 16
Results Brand equity has a significant positive relationship with its performance in both chain restaurants and in luxury hotels. 17
Results 18
Summary and Conclusions v The results of this study imply that strong brand equity can cause a significant increase in profitability and a lack of brand equity in hospitality firms can damage potential cash flow. 19
Summary and Conclusions v That is, if a marketer in hospitality firms does not make efforts to improve customer-based brand equity, then the marketer should expect declining income over time. 20
Summary and Conclusions v Limitation 1 This study did not investigate every possible extraneous effect that could affect or influence a firm’s performance besides brand equity. 2 This study was constrained to respondents from a single country, and this may limit generalizations that may be made to the hospitality industry in other countries. 3 Those respondents included in this study did not truly represent populations of consumers in luxury hotels and chain restaurants. 21
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