the importance of brand cues in intangible service industries by brady m k and bourdeau bl
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The importance of brand cues in intangible service industries By: Brady, M.K and Bourdeau, BL. Presented by: David Kang. Topics of the article. Why was the test conducted What is a cue and why it is used What is the importance of brand cues in intangible service industries

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the importance of brand cues in intangible service industries by brady m k and bourdeau bl

The importance of brand cues in intangible service industriesBy: Brady, M.K and Bourdeau, BL

Presented by: David Kang

topics of the article
Topics of the article
  • Why was the test conducted
  • What is a cue and why it is used
  • What is the importance of brand cues in intangible service industries
  • Hypothesis & Conclusion of the research
why was the test conducted
Why was the test conducted
  • Purpose of this study is to test that whether branding is more important for services or for physical goods
  • There is a direct relationship between the level of intangibility and the importance of branding
what is a cue and why it is used
What is a cue and why it is used
  • "a characteristic event, quality, or object that is external to the consumer that is encoded and used to categorize a stimulus object" (Crane and Clarke, 1988)
  • Dawar and Parker (1994) suggest five reasons for the use of cues:
    • 1. the consumer wants to reduce perceived risk (Olson, 1977)
    • 2. the consumer lacks expertise (Rao and Monroe, 1988)
    • 3. consumer involvement is low (Celsi and Olson, 1988)
    • 4. objective quality is too complex to assess or the customer is not accustomed to spending much time doing such assessments (Allison and UhI, 1964; Hoch and Ha, 1986)
    • 5. an information search preference exists (Nelson, 1970, 1974)
what is a cue and why it is used cont
What is a cue and why it is used (cont.)
  • Price is important for cue and quality
  • Intangible services & Tangible services
    • Price is least important cues for highly intangible services
    • Price is most important cues for more tangible services
  • Two types of cues:
    • Intrinsic cues
      • Example: media reviews, objective product rankings
    • Extrinsic cues
      • Example: personal referrals, price, and advertising
what is the importance of brand cues in intangible service industries
What is the importance of brand cues in intangible service industries
  • Customers use cues for external events, qualities or objects when deciding on services or products
  • Using Intrinsic and Extrinsic cue, consumers engage in a two-step cue utilization process before making a purchase decision
    • 1. consumer selects and stores information about cues
    • 2. cognitive processing of these cues to evaluate the product
hypothesis conclusion of the research
Hypothesis & Conclusion of the research
  • Hypothesis:
    • the researchers believed that since services vary greatly in intangibility, the impact of cues on purchase decisions should vary as well.
    • cues should be important for purchase decisions because of highly intangible products, as well as providing tangible evidence of quality
    • reputation, objective product rankings, and media reviews will be more important for intangible services, then tangible services
hypothesis conclusion of the research cont
Hypothesis & Conclusion of the research (cont.)
  • 8 Hypothesis:
    • H1. Intrinsic cues are more important in the purchase decisions of mutual funds than for hotel accommodations and computers purchases.
    • H1a. National reputation is a more important cue in the purchase decisions of mutual funds than for hotel accommodations and computers purchases.
    • H1b. Objective product rankings are a more important cue in the purchase decisions of mutual funds than for hotel accommodations and computers purchases.
    • H1c. Good media reviews are a more important cue in the purchase decisions of mutual funds than for hotel accommodations and computers purchases.
    • H2. Extrinsic cues are less important in the purchase decisions of mutual funds than for hotel accommodations and computers purchases.
    • H2a. Personal referrals are a less important cue in the purchase decisions of mutual funds than for hotel accommodations and computers purchases.
    • H2b. Price is a less important cue in the purchase decisions of mutual funds than for hotel accommodations and computers purchases.
    • H2c. Advertising is a less important cue in the purchase decisions of mutual funds than for hotel accommodations and computers purchases.
hypothesis conclusion of the research cont1
Hypothesis & Conclusion of the research (cont.)
  • Tests and results: Hypothesis was tested using an repeated measures ANOVA design
    • Found that first four hypothesis on intrinsic cues were correct.
    • Found that last four hypothesis on extrinsic cues were correct
  • Results were that the importance of intrinsic cues were intangible services and extrinsic cues were important in tangible services
conclusion
Conclusion
  • This article is important in service marketing because it offers more study on service branding and what consumers are using
  • Extra information:
    • Krishnan and Hartline in their article, "Brand equity: is it more important in services?“ testing the brand cues will show which cue effects specific consumer\'s purchase decisions
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