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

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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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