When customers purchase a product, they usually pay for a solution to a specific problem. The advantage of a branded product is that the customer is willing to pay a premium price for the added values that the brand embodies. The branded product does not only satisfy the customer’s rational need, but also provides certain benefits that will satisfy emotional needs (de Chernatony & McDonald, 1998). Traditionally, branding has been focused on tangible products, but in recent years the focus has expanded to also include branding of services (cf. de Chernatony & SegalHorn, 2003; Krishnan & Hartline, 2001).
Although branding of services has started to develop, this has not kept pace with the growth of the service sector overall. The growth of the service sector has led to increased competition where branding has become an important tool for gaining competitive advantages. It could be argued that branding of services is even more important than branding of products since the customer has no tangible attributes when assessing the brand (de Chernatony & McDonald, 1998). When branding a product, it is the relationship between the customer and the actual product itself that is in focus.
When discussing services it is the company that is the primary brand (Berry, 2000; de Chernatony & McDonald, 1998). Previously, it was thought that concepts of branding a product can be applied also when branding a service. Now, however, marketers have realised that those principles cannot be used as services require more adaptation to suit different customers (cf. de Chernatony & McDonald, 1998; de Chernatony, Harris & McDonald, 2001). The reason why the same principles cannot be used is because products and services have different characteristics.
The most important distinguisher of a service is that it is essentially intangible (cf. de Chernatony & McDonald, 1998; Mackay, 2001). For a brand to be strong, the set of perceptions which serve to differentiate the product from competition has to be created in a way so that the customers think of the brand in positive terms. This creation can be more complex and challenging in the service industry as the perception of the brand greatly depends on the customer’s individual encounter with the staff (de Chernatony, Harris & McDonald, 2001). 1 Introduction 1. 2 Problem Discussion
A strong brand offers many advantages in the service industry as the risk associated with buying an intangible product is reduced. The strong brand also helps to create greater trust for the company and the particular service it provides. By branding a service the customer can better understand the invisible product and what he or she is actually buying (Berry, 2000; de Chernatony & McDonald, 1998). Other advantages of a strong brand are for example that it creates better margins by adding value to the service, builds stable long term demand and increases market share.
All these advantages add up to increased profitability of the company which can be seen as the main purpose of branding (de Chernatony & McDonald, 1998). So, how is it possible to say if a brand is strong or not? When evaluating the strength of a brand it is common to talk about brand equity (cf. de Chernatony & McDonald, 1998; Berry, 2000). According to Berry (2000) a brand can have either positive or negative brand equity. A general definition of brand equity is the “added value endowed by the brand to the product” (Farquahar, 1990, p. ). Keller (1993) argues that there are two motivations behind studying brand equity, financial and strategy-based. Reasons for studying the financial value of the brand can be for accounting purposes (Keller, 1993), how cash-flows are affected (Simon & Sullivan, 1990) or the effect on the company’s balance sheet (de Chernatony & McDonald, 1998; Aaker, 1996). When the motivation is strategy-based, it has more to do with the marketing aspects of brand equity and how the managers can exploit the brand’s value.
It is important to the company that the managers understand how the brand is perceived by its customers in order to develop effective marketing strategies (Keller, 1993). In order to take advantage of a strong brand the company needs to create positive brand equity. A great amount of research has been conducted regarding how to create brand equity for products, but the service sector is less researched and there is a need for a better understanding of brand equity in this area (cf. Krishnan & Hartline, 2001; Mackay, 2001; Sharp, 1995).
To our knowledge, no in-depth research has been conducted on service companies to explore how they actually operate to create brand equity. The research that has been done is focused on the measurement of brand equity (cf. Keller, 1993; Cobb-Walgren, Ruble & Donthu, 1995; Krishnan & Hartline, 2001; Mackay, 2001) or based on interviews with experts within the field of branding (cf. de Chernatony & Segal-Horn, 2003; Lory & McCalman, 2002). We have not found any research where the researchers approach service companies to deeper investigate how the everyday work is performed to build brand equity.
There is also a shortfall of research within the area of service branding in relation to small companies. The only exclusive model of how to build brand equity in service firms we have found is Berry’s (2000) service branding model, which is based on examples from large and well-known service firms. The service branding model illustrates how its different components affect brand equity. According to Bjerke and Hultman (2002) the new economic era is moving in the direction of favouring small firms. They claim that small firms are important and contribute to an increasing number of employments in the economy.
The smaller firms are also often performing better than the large ones. In many nations the majority of 2 Introduction businesses are small and greatly contribute to the country’s economy in terms of gross domestic product, employment and exports. Because of the important role of small firms and lack of research within the area of brand equity in service firms, we believe it is interesting to apply and test the service branding model on small firms. Do small firms operate according to the service branding model? Are there any differences? If there are differences, which ones? 1. 3 Purpose
The purpose of this thesis is to examine how small service firms operate to build brand equity in relation to the service branding model. 1. 4 Research Questions In the service branding model, brand equity is built up by brand awareness and brand meaning. These in turn are built up by the companies’ presented brand, external brand communication and customer experience with company (Berry, 2000). In order to see how small service companies operate to build brand equity the following three questions will be used as a guide. • • • How do small service firms present their brand in order to enhance brand awareness and brand meaning?
How do small service firms manage external brand communications in order to enhance brand awareness and brand meaning? How do small service firms manage the customer experience with the company in order to enhance brand meaning? 1. 5 Definitions and Clarifications There are several definitions regarding company size. The European definition of small and medium sized companies (SMEs) can be used on companies that have up to 250 employees. This can be divided into small companies, referring to those companies that employ 0-99 persons, and medium sized companies with 100-250 employees.
The general definition of SMEs in Sweden is companies that employ up to 200 persons. This can be divided into micro companies having between 0 and 9 employees, small companies employing between 10 and 49 persons and medium sized companies that have between 50 and 200 employees (SOU 1998:77). This study is based on Swedish companies and therefore we consider it more appropriate to use the definition of small firms being those employing 10-49 persons. Normally the word product refers to both goods and services. In this thesis, however, the term product will be used in reference to goods only. 3 Introduction 1. 6 Disposition Chapter 1
Introduction The chapter includes the background of the thesis, a brief description of the problem area which results in the purpose of the thesis. The research questions are presented and then delimitations and clarifications follow. The chapter also includes a graphical disposition of the thesis. Chapter 5 Conclusion and Final Discussion The chapter presents the conclusions that have been drawn from the analysis. The conclusions show how small service firms do operate to build brand equity in accordance to the service branding model, as stated in the purpose. Lastly a final discussion follows. Chapter 2 Frame of Reference
The frame of reference is presented by describing the characteristics of small businesses and services, and by discussing different perspectives on brand equity. The service branding model is introduced and its different components are described in detail. Chapter 4 Empirical findings and Analysis The chapter presents the empirical findings which are interwoven with an analysis of each section by connecting to the frame of reference. The research questions presented in chapter one serve as a guideline for the empirical findings and analysis. Chapter 3 Method The chapter presents the method by which the study was conducted.
The research method and case study approach is described along with a discussion of how the cases were sampled, the data collected, the analysis made and the credibility of the study ensured. Figure 1-1 Disposition of the thesis. 4 Frame of Reference 2 Frame of Reference This chapter presents the frame of reference from which the thesis departs. The chapter starts off by describing the characteristics of small businesses and services. Different perspectives on brand equity are discussed, and then the service branding model is introduced and its different components described in detail. 2. 1 Small Businesses
According to Burns (2001), small firms are not just miniature versions of large ones. There are several fundamental differences between large and small firms as to how they carry out their business. Small businesses are more like social entities than large firms, and are mainly organized around personal relationships. Burns (2001) claims that there are a number of characteristics typical for small firms, where one element is that they are normally short of cash. Small companies cannot raise capital in the same way large firms can, and one implication of this is that it acts as a constraint on the strategies of the firm.
Burns (2001) exemplifies this by saying that small firms often develop close relationships with customers and prospective customers, by investing time instead of money, since they cannot afford to spend money on expensive advertising and promotion campaigns. He also argues that being short of cash results in short-term decision making since the firm needs quick pay-off. Another characteristic of small firms is that they generally operate in a single market or a limited range of markets, and are most likely offering a limited variety of products or services (Burns, 2001).
Bjerke and Hultman (2002) argue that the small size of a company makes it profitable to exploit smaller market niches and target a market that is too small for a large company. Burns (2001) mentions that this makes the strategic issues fewer in a small firm compared to a large one. Since the scope of a small firm is limited, the firm tends to be over-reliant on a smaller number of customers. The small number of customers is another characteristic and makes the firm more vulnerable to losing a customer, and the effect of such a loss is therefore disproportionately large.
The last characteristic Burns (2001) discusses has to do with the effects of economies of scale on small businesses. According to Burns (2001) most business finance textbooks are written to suit large companies, and as a result cannot be applied in the same way on small firms even though the principles are valid. Burns (2001) uses an example of employing an extra staff member. In large companies the wages are considered as variable costs. In small firms on the other hand, employing an extra person is a big strategic decision resulting in an increase in the fixed costs.
The implication of this is that small firms will be unwilling to employ unless they absolutely have to. Burns (2001) argues that in this case the view that wages are variable costs can only be valid when there are a large number of employees. Bjerke and Hultman (2002) claim that small firms are often based on intangible assets and can through networks of small firms challenge the old business logic of economies of scale. These intangible assets include skills of constructing and using informa- 5 Frame of Reference tion, knowledge and relations to other businesses and customers.
The authors state that these capabilities do not improve with size, on the contrary, they seem to be best used in small business units with loose organizational structure and high flexibility where the managers are close to the customers. Apart from Burns’ (2001) characteristics, the flexibility of small firms and their closeness to their customers are often brought up as important features (cf. Bjerke & Hultman, 2002; Kenny & Dyson, 1989). Small firms generally have fewer organizational layers which makes the information flow and decision making faster.
This opens up to a more flexible way of working and it increases the company’s ability to deliver value to each customer. It also affects the speed of reaction to changes in customer preferences, and small firms tend to react faster than their larger competitors (Bjerke & Hultman, 2002). 2. 1. 1 Small Business Marketing There is a general consensus that marketing theory cannot be applied in the same way in small firms as in large firms, hence, marketing in small firms is not a miniversion of marketing in large firms (cf. Bjerke & Hultman, 2002; Burns, 2001; Kenny & Dyson, 1989). In small firms there is no trict separation between marketing and other business functions, often due to the small number of individuals. Instead it is common that all individuals need to know a little bit about everything (Bjerke & Hultman, 2002). The authors also state that there are fewer persons involved in marketing decisions in small firms compared to in large ones. One single person may be making all important marketing decisions, him- or herself, in small organizations. Many times goals are not based on opportunities, rather actions are decided on according to how they appeal to the owner or manager.
According to Kenny and Dyson (1989) marketing in small firms can be seen as a somewhat unnecessary luxury due to the lack of resources, time and the need for short term decisions. The authors argue that a more systematic approach to marketing becomes relevant the larger the company gets and the larger the need of adapting a more externally oriented view becomes. Bjerke and Hultman (2002) also discuss the effect of the firm’s resources and capabilities on the marketing strategy. They claim that in small firms there is often a lack of management expertise and well known tools like the SWOT-analysis are rarely used.
Instead the marketing process is often without structure and clear purpose and most likely subconscious. Bjerke and Hultman (2002) argue that intuition and the need of finding solutions are more evident in small firms than scientific marketing models. The marketing process may appear simple in comparison to formal approaches, and is characterized by constant change and flexibility. Burns (2001) states that small businesses rely a great deal on relationship marketing. This approach to marketing is aimed at delivering sustainable customer loyalty.
The relationship marketing approach is characterized by close and frequent customer contact, has a focus on quality and value to the customer, has a long term scope, and encourages repeat sales. 6 Frame of Reference 2. 1. 2 • • • • • • • • Key Characteristics of Small Businesses and Small Business Marketing Small businesses often have limited resources and a lack of time. Small businesses are often characterized by close relationships with their customers and are in most cases operating in single markets or a limited range of markets.
Small firms tend to be over-reliant on a small number of customers and therefore they are more vulnerable to loose a customer. Small firms are most often based on intangible assets. Important features of small firms are flexibility and closeness to their customers, which makes it easier for the companies to deliver value and they can react faster to the customer’s preferences. A more systematic approach to marketing becomes more relevant the larger the company gets. Small businesses usually do not have a separate marketing department, and the marketing of small businesses involves fewer people.
The marketing process in small firms is regularly without structure and clear purpose. 2. 2 Characteristics of Services There is no difference in the motivation behind branding products and services, but the way branding is applied and measured differs because of the different characteristics of services (Mackay, 2001; McDonald et al. , 2001). There are four main characteristics of services that are widely accepted and discussed. These characteristics are intangibility, inseparability of production and consumption, heterogeneity and perishability (Zeithaml et al. , 1985). Zeithaml et al. 1985) argue that each of the characteristics of services leads to specific problems in the marketing. These problems need to be addressed by service marketers who must develop strategies for dealing with them. The characteristic identified as the most essential one is the intangibility of services. Services differ from products in the way that they cannot be touched, felt, seen or tasted in the same way products can. Unlike products, services are performed experiences and not objects. The lack of tangible attributes causes the services to be harder to evaluate than products. (cf. e Chernatony & McDonald, 1998; Wolak & Harris, 1998; Zeithaml et al. , 1985). Both de Chernatony and McDonald (1998) and Wolak and Harris (1998) discuss the problem of defining intangibility. Many services have some tangible attributes, and it is the degree of intangibility that affects the evaluation of the service or product. De Chernatony and McDonald (1998) illustrate this by a classification scheme where products and services are grouped in accordance to if they are high in search, experience or credence qualities. In figure 2-1 it can be seen that services are more difficult for the customers to evaluate the more intangible they are.
When search qualities are high the consumers can identify and assess attributes of the offering before making a buying decision. Experience qualities are high when attributes of an offer can only be evaluated after use. The most difficult offerings to evaluate are those high in credence qualities. Credence qualities are common in numerous 7 Frame of Reference services where consumers do not have sufficient knowledge to assess services, even after they have been consumed. Goods Services Easy to Evaluate Difficult to Evaluate Restaurant Meal Lawn Fertilizer
Legal Services Motor vehicle Hi-fi Repair High in Search Qualities High in Experience Qualities High in Credence Qualities Figure 2-1 The evaluation spectrum of products and services (after Zeithamel & Bitner, 1996 in de Chernatony & McDonald, 1998, p. 216). The inseparability of production and consumption indicates that production and consumption are performed at the same time. When dealing with products these are normally produced, sold and then consumed. As far as services are concerned, these are usually first sold and then produced and consumed at the same time.
Since the customer in most cases needs to be present, the inseparability forces him or her to take an active part in the production process and can therefore affect the service quality (cf. de Chernatony & McDonald, 1998; Zeithaml et al. , 1985). The heterogeneity of services deals with the prospective of inconsistency in service quality. The performed service can vary greatly from producer to producer, from day to day and from customer to customer. Services being delivered from the same individual can also vary due to the fact that people have good and bad days, and hence perform in an inconsistent way.
The problem of heterogeneity is of greater relevance in labour intensive services (cf. de Chernatony & McDonald, 1998; Zeithaml et al. , 1985). Perishability suggests that services, unlike products, cannot be stored and saved for a later occasion. A common problem for service firms is the synchronization of supply and demand which can be very difficult. Service firms often find themselves facing either an excess of demand, or a shortfall of demand. One hour with a consultant can not be stored and used at a later occasion and neither can a night in a hotel room. (cf. de Chernatony & McDonald, 1998; Zeithaml et al. 1985). 8 Surgery China Chair Haircut Frame of Reference 2. 3 Brand Equity There are many definitions of brand equity, but the role of brand equity in service firms has not yet been fully explored (Krishnan & Hartline, 2001). Two often cited authors within the field of branding and brand equity are David Aaker and Kevin Keller. According to Aaker (1991) brand equity is “…a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtracts from the value provided by a product or service to a firm and/or to that firm’s customers” (p. 15).
Aaker (1991) says that brand equity is based on brand loyalty, brand awareness, perceived quality, brand associations and other proprietary brand assets. As the definition indicates, all of these assets are intended to create value to both the customer and the firm. The customer can be helped by the different assets in the way that they can make him or her feel more confident in the purchase decision. The interpretation and storage of information about the brand can be facilitated, and the customer’s experience with the product can be improved. The firm’s added value is provided primarily by generating extra cash flows.
Brand equity demands a lot of attention and needs to be maintained over time in order to not disperse. To do so the firm needs to invest in each of the underlying assets of brand equity (Aaker, 1991). Keller (1993) defines brand equity as “the differential effect brand knowledge has on response to a marketing program” (p. 2). According to this perspective, a brand is considered to have positive brand equity to the extent that customer’s respond more favourably to marketing activities when the brand is identified, compared to when it is not (Hoeffler & Keller, 2003).
Brand knowledge consists of brand awareness and brand image. This definition of brand equity is from the customer’s perspective, and is also referred to as customer-based brand equity (Keller, 1993). Keller (1993) implies that by studying brand equity from this perspective, an understanding of the customer’s response to certain marketing activities can improve the marketing actions of a firm. This strategy-based perspective provides the managers with guidelines for strategies and a better basis for making decisions (Keller, 1993).
Understanding brand knowledge is important to be able to affect both the customer’s perception of a brand and the response to a certain marketing activity. The first component of brand knowledge, brand awareness, is linked to the customer’s ability to identify the brand under different circumstances (Keller, 1993). The second component of brand knowledge is brand image, which is defined by Keller (1993) as “…perceptions about a brand as reflected by the brand associations held in consumer memory” (p. 3).
These associations contain brand meaning to the customers, and it is the strength, uniqueness and favourability of these that play an important role in the customer’s response to different marketing activities. The brand image consists of three categories of associations: attributes, benefits and attitudes. To create a strong brand it is important to create a familiar brand with associations that are strong, favourable and unique (Keller, 1993). From now on when referring to brand equity the definition of Keller (1993) will be used. The definition is strategy based, as it concerns the marketing aspect of brand Frame of Reference equity and how managers can exploit the brand’s value. The service branding model is based on this definition and therefore it is more suitable for the purpose of this thesis. 2. 4 The Service Branding Model Berry (2000) has developed a model for creating brand equity for services. He identifies brand equity as “the differential effect of brand awareness and brand meaning combined on customer response to the marketing of the brand” (p. 130), which is his interpretation of Keller’s (1993) definition of brand equity.
According to Berry (2000) the service branding model does not differ in kind from that of products, only in degree. He argues that the main difference in building brand equity for products compared to services is the great importance of service performance, meaning human performance for services rather than machine performance for products. In Berry’s (2000) model, brand equity is based on brand awareness and brand meaning, where brand meaning has a greater influence on brand equity than brand awareness. Brand awareness is primarily composed of the presented brand, but is also affected by external brand communication.
Brand meaning is foremost affected by the customer’s experience with the company, but also indirectly affected by external brand communication and the presented brand. Company’s Presented Brand Brand Awareness External Brand Communications Brand Equity Customer Experience with Company Brand meaning Figure 2-2 The Service-Branding Model (Berry, 2000, p. 130) Similarities can be seen between Keller’s (1993) work and Berry’s (2000) service branding model. For example they both use brand awareness as a base of brand equity. Keller (1993) uses the term brand image as the other basis for brand equity, while Berry (2000) uses the term brand meaning.
Although the authors use different wordings, they are both referring to the same phenomenon, which is the customer’s perception of the brand. The different components of the service branding model will now be explained further. 10 Frame of Reference 2. 4. 1 Brand Awareness Brand awareness has to do with the levels of knowledge customers have about a brand. According to Berry (2000), brand awareness can be said to be built up by two elements: company’s presented brand and external brand communications. Keller (1993), on the other hand, divides brand awareness into brand recall and brand recognition.
The two authors divisions are similar as brand recognition and brand recall are both built up through how the company presents its brand. Brand awareness is a component of the brand that can add to its value. The value is based on how easy the brand comes to a customer’s mind (Riezebos, 2003). There are four different levels that show how aware a customer is of a certain brand: unawareness, passive awareness, active awareness and top-of-the-mind awareness (Riezebos, 2003). The higher the level of brand awareness, the higher the likelihood to make a purchase decision in favour of that particular brand (Keller, 1993).
Passive awareness is similar to Keller’s (1993) brand recognition meaning that the brand name is recognised by customers, but the brand name does not spontaneously come to mind (Riezebos, 2003). When the level of brand name awareness has reached active awareness (Riezebos, 2003), or brand recall (Keller, 1993), the customer can retrieve the brand name when a cue such as the product group is given (Riezebos, 2003). Top-ofthe-mind awareness is the level that is the most desirable and is attributable to the brand that first comes to mind when a customer is presented with a certain product group (Riezebos, 2003).
In this thesis we will not measure the different levels of brand awareness. It is, however, important to mention the levels as the differences and implications are imperative in order to successfully implement and understand strategies for increasing brand equity. 2. 4. 2 Brand Meaning Brand meaning is what immediately comes into the customer’s mind when exposed to a brand (Berry, 2000). It is the customer’s perception, the impressions and associations of the brand which gives that brand a special meaning to the customer.
As mentioned above, brand meaning is created primarily based on the customer’s experience with the brand, but also the presented brand and external brand communication contribute to the brand meaning. Berry (2000) claims that the presented brand and the external brand communication have greater impact on new customers, since these are the only signs to the customer of what the brand represents. He continues to say that when the customer has actually experienced the service; this experience becomes disproportionately influential and hence has a greater impact on the brand meaning.
Berry (2000) explains that if for example the advertising differs from the experience, the customer will believe the experience over the advertising. 2. 4. 3 Presented Brand The company’s presented brand can be said to be the communication that the company controls and that is intended for the customers to see (Berry, 2000). This communication is how the company wants to portray its image through its advertising, the service facilities and appearance of service providers. The first thing that custom- 11 Frame of Reference ers come into contact with is the company’s name.
Other core elements of the presented brand are advertising and symbolic associations (Berry, 2000). These three elements will now be presented. Name The brand name can help reduce the customers’ experienced risk of buying a service since external cues are the only thing they can rely on when the offering is intangible (Krishnan & Hartline, 2001; Dall’Olmo Riley & de Chernatony, 2000). When selecting a brand name for a service there are many things to take into consideration. Keller (1993) lists criteria such as simplicity, familiarity and distinctiveness as prominent to create a successful brand name.
Through the brand name, enhancements of brand image, loyalty and perceived quality should also be made (Yoo, Donthy & Lee, 2000). When choosing a name the question arises whether the name should be derived directly from the company name, linked to the company name, or completely individual (McDonald, de Chernatony & Harris, 2001). A brand name can create associations in customers’ minds and these associations are either from the name itself or from associations that have been learned from the company’s communication (Riezebos, 2003).
For service firms it is quite common that the customers judge the quality based on the corporate brand and the size of the firm. Rather than branding the individual service, the corporate brand is considered to be the brand in service firms (Dall’Olmo Riley & de Chernatony, 2000). The company, however, must not forget to market the individual benefits of each individual service brand so to distinguish them for the customer. When the brand name is tied to the corporate brand the company can gain from economies of scale but it can also hinder expansions into new segments.
This is not a problem when branding the service with an individual brand name. Individual brand names are also good should the service fail, because then no damage from the failure will be connected to the company name (McDonald et al. , 2001). Advertising Because customers change in line with what is socially acceptable and evolve with their surroundings it is important that the presented brand is also continuously changed to fit the position the company wants to hold (Keller, 1993; Lory & McCalman, 2002). The perceptions customers have about the brand should be shared, positive and consistent (McDonald et al. 2001). Therefore it is important that the same message is given through all communication channels. Through a thematic line in the advertising the managers can shape the perceptions the customers have and decide how they will think about the brand (McDonald et al. , 2001; Padgett & Allen, 1997). Through advertising, a certain image of the brand is created and customers choose the brand with the image that best fit themselves (Dall’Olmo Riley & de Chernatony, 2000). Cobb-Walgren et al. (1995) mention several advantages with building brand awareness and brand equity through advertising.
The authors say that through advertising, the perceived quality of the brand can be affected together with user experience. Advertising can also be used to improve brand recall as the brand is paired with 12 Frame of Reference the service category (Keller, 1998) and the more money that is spent on advertising the more overall brand awareness will increase (Yoo et al. , 2000). When advertising a consultancy agency there is a choice of what to base the advertisement on (Lory & McCalman, 2002). Either the advertisement is related to the practise, the service or the individual consultants.
The choice of how to advertise has to do with the size of the company, where large organisations with a wide range of services benefit from advertising the practise. Small consultancy organisations on the other hand, often have constrained resources and therefore might not be able to advertise. Symbolic associations According to de Chernatony and Segal Horn (2003) the most important communication channel is the staff facing the customers. When the staff is consistent in the way they are presented, with for example staff uniforms, they have the greatest impact on the brand perceptions (de Chernatony & Segal Horn, 2003; McDonald et al. 2001). Since there are so many points of contact with customers in the delivery of services it is important to uphold good communications also within the company so that all employees present the same image of the brand (de Chernatony & Segal Horn, 2003). Also mentioned as important influencers of brand associations are office decor, car parking, the building’s design, appearance of the reception area etc. , as those factors often are the customer’s first interaction with the service firm (McDonald et al. , 2001; Yoo et al. , 2000). 2. 4. 4 External Brand Communications
When Berry (2000) discusses external brand communications, he is referring to the information about the service company that is uncontrolled by the company itself. The external brand communications can influence both the awareness and the meaning of the brand. The awareness of the brand may not only be derived from the presented brand, but also from communications about the company obtainable by independent sources. Since these communications are not intended by the company as a mean of strengthening the brand, they do not have the same effect on brand awareness and brand meaning, thereof the dotted lines.
Berry (2000) indicates that in extreme cases, when word-of-mouth (WOM) becomes extensive and publicity widespread and receives a lot of attention; the dotted lines can turn into bold. The two most common forms of external brand communication that Berry (2000) points out are word-of-mouth and publicity. Word-of-Mouth According to Berry (2000) WOM is common in services due to the service characteristic of intangibility. Wirtz and Chew (2002) support this by claiming that WOM is even more important in a service context.
Both Berry (2000) and Wirtz and Chew (2002) argue that since services are harder than products to evaluate before the actual purchase, the customer is more likely to rely on experience based information from other customers. Gronroos (2004) continues by saying that to a potential customer, a 13 Frame of Reference person who has experienced the service is regarded as a more objective source of information. As a result, if there is a conflict between an advertising message and WOM, the advertising will lose. This demonstrates that the marketing impact of WOM is greater than the planned communication.
The idea that satisfied customers generate WOM is generally accepted (cf. Gronroos, 2004; Gremler, Gwinner & Brown, 2001). According to Wirtz and Chew (2002) many studies have shown a positive relationship between satisfied customers and WOM, while some have shown a negative relationship. They indicate that this can be explained by an asymmetric U-shape relationship between customer satisfaction and WOM. This tells us that WOM is more frequent when the customer is either very satisfied or very dissatisfied. Gronroos (2004) explains that WOM can be either positive or negative.
Negative WOM is generated when the customer has had too many negative experiences. This results in less effective advertising campaigns and the company needs to invest more in creating positive communications. Gronroos (2004) however accentuate that if the WOM is too negative, no increase in marketing communications will be enough to save the situation. Positive WOM will have the opposite effect; hence decrease the need of spending a lot on marketing communications. The customer takes on the role as a marketer without any additional cost for the firm.
There are different ways of influencing and encouraging positive WOM (Gremler et al. , 2001). Gronroos (2004) recommends references and testimonials as one way of actively use WOM in the company’s advertising. Gremler et al. (2001) argues that positive WOM can be encouraged through the development of interpersonal bonds between employees and customers. The positive WOM is enhanced through creating a greater trust in the relationship between the employee and the customer. The degree of trust is influenced by familiarity, care and personal connections. Gremler et al. 2001) define familiarity as “…the customer’s perception that the employee has personal recognition of the customer and knows specific details about his/her service needs” (p. 48). The familiarity is assumed to increase with the frequency of interactions. Care is defined as “…the customer’s perception of the employee having genuine concern for the customer’s well being” (Gremler et al. , p. 49), and personal connection is defined as “…a strong sense of affiliation or bond based on some tie” (Gremler et al. , p. 50). The personal connection is related to personal chemistry.
Some people just connect based on same personalities, interests, attitudes or other common attributes. By fostering the relationship between employees and customers and creating greater trust using familiarity, care and personal connection, Gremler et al. (2001) illustrate that positive WOM will be encouraged. Wirtz and Chew (2002) alternatively suggest incentives for generating positive WOM. Through their study it is shown that incentives were found to be an effective way of creating WOM. The likelihood of the customer to make a recommendation increased along with increased incentives.
The authors specify that for the WOM to be positive, it is not enough with only incentives, the customers must also be satisfied. Wirtz and Chew (2002) therefore imply that the manager’s first goal should be to keep the customers satisfied so that incentives can be used in a next step to increase the spread of positive WOM. 14 Frame of Reference Publicity Publicity is very important as: “A better-known company is perceived to be a better company, and publicity is about becoming better known” (Marconi, 2004, p. 141). A common misunderstanding is that publicity is the same as public relations (PR).
Instead publicity is a part of PR along with for example promotions, community relations, media relations etcetera. (Marconi, 2004). Publicity is about managing information intended for one or more audiences with the purpose of influencing their opinions or decisions (Marconi, 1999). The word publicity is often associated with positive attention. However, Marconi (1999) stresses that it is important to realize that there is also such a thing as bad publicity. Even though Berry (2000) states that publicity is essentially uncontrolled, there are ways of influencing it and trying to manage it (Marconi, 1999; 2004).
In comparison to advertising, publicity is relatively cheap (Marconi, 1999). Publicity is often a part of a larger marketing effort, and under those circumstances it is important to integrate publicity as a part. Marconi (1999) argues that the publicity is often handled under a separate department from marketing, and therefore often results in inconsistent messages to the customer. To avoid this it is important that the marketing and publicity departments are working closely together and share information.
If a publicist for example is publishing a subject, he or she should be aware of what other related activities are undertaken at the same time in order to best publish the subject. As mentioned earlier, publicity is relatively cheap in comparison to advertising. However, it is important to be aware that publicity is not free, which is a common misconception. The focal difference between advertisement and publicity is that in advertising the message is fully controlled by the company, whereas in publicity it is most often not.
Marconi (1999) emphasizes that since publicity is not as controlled as advertising, it has a higher credibility. Marconi (1999) advocates that the most essential in publicity is to have a plan. This plan will facilitate the internal communication and make sure that all parts of the company communicate the right messages at the right time. The publicist can try to create publicity by approaching the media, but media is not interested in publishing a press release just to help the company spread a message. Therefore it is important that the story the publicist tries to sell is newsworthy. . 4. 5 Customer Experience with Company The customer experience with the company has the most influential impact on brand meaning and can be affected by several factors. The components most often brought up as influencing the experience are the employees and the customers, and the relationship between the two (cf. de Chernatony & McDonald, 1998; Ind, 2001; McDonald et al. , 2001). Bateson and Hui (1990) say that it is the service encounter that makes up the service experience in which customer’s needs and wants are satisfied.
By service encounter the authors refer to interactions between employees and customers, customer-to-customer interactions and the service environment. It is the customer’s 15 Frame of Reference psychological reactions to the service encounter that is the service experience. Further, Riley and de Chernatony (2000) suggest that the service brand is a holistic process that starts with the relationship between the firm and the employees, to later become realized in the interaction between the customer and the service provider. Since the brand delivery through taff and customer participation are important parts of the customer experience, they will be discussed below. Brand delivery through staff The employees are often pointed out as being a great determinant of the customer’s experience in services, and are often associated with the consistency of the service quality delivered (cf. de Chernatony & McDonald, 1998; Gronroos, 2000). The consistency of quality is directly related to the heterogeneity of services, which was previously discussed as one of the service characteristics.
De Chernatony and McDonald (1998) argue that even if a company has developed a service image of the brand, this can easily be destroyed if no attention is being given to the role of the staff. Service marketing therefore needs to focus more on the internal marketing of the brand than in the case of product marketing. Riley and de Chernatony (2000) support this due to the important role of the employees. Internal marketing is used to get the employees to share the firm’s values, in order to communicate these to the customers.
For this reason the authors claim that the communication with the employees may be even more important than the one with the customers. Studies have shown that the customer satisfaction is dependent on staff satisfaction. Therefore firms should motivate their employees and encourage them to be customer-oriented (de Chernatony & McDonald, 1998). Important factors in the motivation and management of the employees are recruitment, training and appraisal (de Chernatony & McDonald, 1998; Ind, 2001).
Ind (2001) argues that each of these factors are important individually, but it is even more important that they are linked together and are based on the same values and share the same philosophy. De Chernatony and McDonald (1998) assert that by addressing these issues, a customerfocused culture can be established, which in turn is a condition for delivering consistent service quality and building a strong service brand. The branding process starts with recruitment of the right people (Ind, 2001). The aim is to employ people that share the same values as the firm, that is to say with the brand.
In order to do so the values of the brand need to be correctly communicated in all recruitment messages. Ind (2001) states that this is often not the case as many firms have a tendency to portray themselves as having values they actually do not, but maybe wish to have. The next step is training of the people employed (Ind, 2001). This training should be carried out in a way that the values of the firm are embedded in the employees. It is an opportunity to create an understanding of the brand and bring the employees into line with its principles (Ind, 2001).
Gronroos (2004) believes that the most important part of the training is to provide the employees with a holistic view of the marketing process. They need to be able to see the whole process and their individual role, as 16 Frame of Reference well as the role of each individual in relation to other individuals, both within the firm and with its customers. When it comes to appraisals and rewards, these should be defined based on the firm’s values. If the values of the firm for example are to be collaborative and cooperative, then the reward system should not be based on individual performance, but on the performance of the group (Ind, 2001).
Customer participation When branding a product, the value delivery system is assumed to be internal and unseen by the customers. The value delivery system for services on the other hand is fully visible and involve the customer as an active participant (de Chernatony & Segal-Horn, 2003; Gronroos, 2004). The role of the customer in the service delivery process has an important impact on the development of a service brand. The way customers evaluate a service greatly depends on the extent to which the customer participates in the delivery of the service (de Chernatony & McDonald, 1998; Bitner, Faranda, Hubbert & Zeithaml, 1997).
The customers can be involved in the delivery of the service to different degrees. Sometimes the customer’s level of participation is low, as in the fast-food sector. Within for example the banking and insurance sector the role of the customer is becoming more active, and when participating in services like the Weight Watchers the customer needs to play a very active role (de Chernatony & McDonald, 1998). Bitner et al. (1997) state that in business-to-business services the customer often has a higher degree of involvement than in business-to-consumer markets.
There are different strategies that can be implemented when the customers are involved in the service delivery process. These are according to de Chernatony and McDonald (1998) based on three factors: defining the customers’ role; recruiting, educating and rewarding customers; and managing the customer mix. Bitner et al. (1997) claim that the customers’ role can be divided into three categories: the customer as a productive resource; the customer as a contributor to quality, satisfaction and values; and the customer as a competitor.
The authors accentuate that the roles overlap each other, meaning that the customer can play more than one role at a specific situation. When the customer plays the role as a productive resource, it is seen as a partial employee that performs the same kind of tasks and contributes with the same kind of information to the firm (Bitner et al. , 1997; de Chernatony & McDonald, 1998). Bitner et al. (1997) present different views on how to deal with the customer as a productive resource.
They claim that some experts want to isolate the service delivery system as much as possible to reduce the uncertainty that comes from the customer’s input, while others believe that the most efficient strategy is to regard the customer as an integrated part of the value delivery system and therefore the company should design the customer’s role in the most effective way. 17 Frame of Reference When the customers are involved in the production of the service, they are also affecting the quality and hence their evaluation of the service brand (Bitner et al. , 1997; de Chernatony and McDonald, 1998).
The customer’s role as a contributor to quality, satisfaction and values is all about the customer itself influencing how its own needs are fulfilled. This is especially apparent in services where the outcome is highly dependent on customer participation (Bitner et al. , 1997). The authors also claim that in addition to contributing to their own satisfaction, some customers enjoy participating in the service delivery for several reasons. The notion of the customer as a competitor is linked to the fact that the customer often has the choice of performing the service itself or have someone else perform it.
This implies that the company competes against the customer for the distribution of the service (Bitner et al. , 1997). Some examples where the customer clearly can be seen as a competitor can for organizations be payroll, research or accounting. Effective customer participation may call for recruiting, educating and rewarding customers through a similar process that employees undergo (de Chernatony & McDonald, 1998; Gronroos, 2004). According to Blattberg, Getz and Thomas (2001) few companies have a selective approach to recruiting new customers, meaning that they deliberately deselect certain customers.
The authors claim that targeting is the most important feature in the recruitment process. A firm should target those customers who has a need that the firm’s offerings can satisfy, whether this need is yet recognized or not by the customer. After being recruited, the customer often needs to be educated and trained (de Chernatony & McDonald, 1998). This can for example represent providing the customers with more information so that they know exactly what their roles are (Gronroos, 2004). The customer can be rewarded for playing its role correctly by for example getting access to faster service (de Chernatony & McDonald, 1998).
De Chernatony and McDonald (1998) claim that the service brand can be strengthened by managing the customer mix effectively since customers often simultaneously experience the service. There can be different degrees to which customers come in contact with other customers. For example in restaurants or on airplanes there is a high customer-to-customer contact, while in legal or consultancy services the degree of contact is low. 2. 5 Summary of Characteristics of Services and the Service Branding Model Services differ from products in many ways.
The characteristics of services that are most evident are intangibility, inseparability of production and consumption, heterogeneity and perishability. All of these characteristics of services influence the marketing of services, and hence the building of brand equity (Zeithaml et al. , 1985). Although brand equity has many definitions, the definition by Keller (1993, p. 2) that brand equity is “the differential effect that brand knowledge has on response to a marketing program”, will be used in this thesis. Berry (2000) bases his service branding model on this definition and explains how service firms build brand equity.
The model 18 Frame of Reference shows that brand equity is built up by brand awareness and brand meaning, which in turn is built up by presented brand, external brand communications and customer experience with company. The presented brand has the greatest impact on brand awareness and has to do with how the company intentionally present its brand through for example name, advertising and different symbolic associations (Berry, 2000). These need to be consistent and present the same image of the brand through all channels (de Chernatony & Segal Horn, 2003; McDonald et. l. , 2001). Brand awareness is also influenced by external brand communications which are messages about the company that are not fully controlled by the company itself. The external brand communications consist of word-of-mouth and publicity (Berry, 2001). Even though these are seen as uncontrolled by the company in the end, there are ways for the company to influence these. Word-of-mouth can be encouraged by for example satisfied customers (Gremler et al. , 2001), the use of references (Gronroos, 2004) or incentives (Wirtz & Chew, 2002).
Publicity on the other hand can be influenced by approaching the press and using press releases (Marconi, 1999). External brand communication does not only influence brand awareness, but also brand meaning. Even the presented brand has some influence on brand meaning to the customers. Despite these two influencing the brand meaning, it is the customer experience with the company that finally has the greatest impact (Berry, 2001). This experience with the company is namely dependent on the role of both the staff and the customer itself (cf. e Chernatony & McDonald, 1998; Ind, 2001; McDonald et al. , 2001). For the experience to be good, the company can first make sure that the staff is delivering the right image of the brand, by recruiting the right people, train and educate them and appraise them in the right way (de Chernatony & McDonald, 1998). This needs to be done in order to have motivated employees that can deliver a consistent quality and act in the right way towards the customers (de Chernatony & McDonald, 1998; Ind, 2001). The customer also has a part in his or her experience with the company.
Since the customer is a part of the service delivery system it is important that the customer knows his or her role. The customer can play different roles which can be overlapping or differ from time to time (de Chernatony & McDonald, 1998; Bitner et. al. , 1997). It is also important to manage recruitment, training and appraisal of the customers, just as for the employees (de Chernatony & McDonald, 1998; Gronroos, 2004). Sometimes it can also be a matter of managing the customer mix, when customers have to interact with each other in the delivery of the service (de Chernatony & McDonald, 1998). 9 Method 3 Method This chapter presents the method chosen to fulfil the purpose of the thesis. Case studies are introduced and a detailed description of sampling and data collection is presented. A discussion of analysis and research quality follows. 3. 1 Research Method Scientific studies can be conducted as either quantitative or qualitative studies (cf. Carson et al. , 2001; Berg, 2001; Widerberg, 2002). The research methods have different features, but are not contrary to each other (Johannessen & Tufte, 2002/2003).
Quantitative studies deal with amounts of something, the occurrence or frequency (Berg, 2001; Widerberg, 2002) and answer what questions (Carson et al. , 2001). The studies deal with a few variables which are measured by figures or translated into figures and analysed statistically after the data collection has been made (Hollensen, 1992/1995). The results are then used to make generalizations over a large, representative population (Hollensen, 1992/1995) even though the complete population has not been studied (Johannessen & Tufte, 2002/2003).
Qualitative studies, on the other hand, are seeking descriptive data (Taylor & Bogdan, 1984) through a holistic viewpoint and examine several variables, but only in a small population (Hollensen, 1992/1995). The studies are about the character of something and seek to find the content or meaning (Carson et al. , 2001; Widerberg 2002) through answering questions of how and why (Carson et al. , 2001). Berg (2001) adds that qualitative research refers to concepts, definitions, metaphors, symbols, and descriptions.
The data in a qualitative study is continuously analyzed and interpreted by the researcher and the outcome is normally a deeper understanding of the subject (Johannessen & Tufte, 2002/2003). Although both a quantitative and a qualitative study could be supported to find out how service firms build brand equity, a qualitative research method has been chosen. This choice was based on the fact that we want to go deeper into the subject and examine how small service firms work with the different components of the service branding model.
With a quantitative study we would only be able to measure the extent of differences and similarities without finding out the deeper meanings of them. By doing a qualitative study we will be able to understand why certain actions are taken and how the small service companies actually think about and work with building their brand equity. 3. 2 Case Studies Our qualitative study is performed through a case study. Case studies are suitable when the time scale is limited (Bell, 1999) and give us the opportunity to answer questions such as why and how (Carson et al. 2001; Berg, 2001). Case studies can be focused on individuals, groups or an entire community, and through systematically gathering information an understanding of operations or functions can be achieved (Berg, 2001; Patton, 2002). In a multiple case study several cases are studied and can 20 Method then be compared to each other. Through a comparison of multiple cases differences as well as similarities can be found and uniquenesses in each case can be identified (Johannessen & Tufte, 2002/2003; Carson et al. 2001; Daymon & Holloway, 2002).
This case study will be a collective, instrumental case study. In an instrumental case study the chosen cases are of secondary importance and only serve the role of giving an understanding of theoretical questions. When several instrumental cases are investigated to gain a deeper understanding, a collective case study is being made (Berg, 2001). In a case study, theory can be generated and tested, findings from other research can be confirmed and insights may also be given into a field that has not been thoroughly studied before (Daymon & Holloway, 2002).
We find a case study appropriate as we want to test the service branding model on small service companies, and the used cases are thus of secondary importance. The use of a case study is also supported since we are studying a field that has not been studied in detail before. A case study can be designed as an exploratory, explanatory or descriptive case study (Berg, 2001). Exploratory case studies are often used as preludes to large social science studies and must have some type of organizational framework designed before the research starts.
For conducting causal studies, explanatory case studies are suitable, especially when complex studies of organizations are made. The descriptive case studies are used when “how” and “why” questions are being asked and when the research is based on a descriptive theory (Berg, 2001). In this thesis, we have provided a frame of reference including several different theories in the studied field and a graphic presentation of the model that the research is based upon and hence a foundation for a descriptive case study has been formed. Since it is mportant to set a distinctive time frame in which the case study is taking place (Daymon & Holloway, 2002), we have decided to study how the different companies are working with their brand equity mainly today, but also in the recent past and near future, if relevant. The reason for this focus is that we want to avoid information being skewed due to the respondent not remembering completely what has happened in the past and not being able to know what is going to happen in the future. 3. 2. 1 Case Sampling A case study starts by selecting appropriate cases to be researched.
This selection is purposeful and seeks cases that are unique, typical, representative or never previously encountered (Merriam, 2002a; Carson et al. , 2001). Daymon and Holloway (2002) add that a case can be selected out of convenience as long as the researcher is confident about what is to be studied. No specific guidelines can be given as to how many cases that should be included in a case study; this will be guided by the time and resource constraints in the specific study (Carson et al. , 2001; Smith & Osborn, 2003).
However, should a suggestion be made, a minimum of two to four cases is given along with a maximum of ten to fifteen cases (Carson et al. , 2001). Daymon and Holloway (2002) are of the opinion that no more than four cases should be used. The 21 Method more cases used, the more the benefits of a case study will decrease as the depth of each case will be affected negatively. Since Carson et al. (2001) suggested a minimum of two to four cases, and Daymon and Holloway (2002) suggested four cases as a maximum, we decided to study four cases.
The cases were selected on the basis of their size as we decided to focus on small service companies. In order to minimize the possibility of differences among industries, only one industry was chosen and the choice fell on IT-consultancy firms. 3. 2. 2 Data Collection In qualitative research data can be collected through interviews, observations and secondary information (Merriam, 2002b; Berg, 2001). The way of collecting data is determined by which source will yield the best information (Merriam, 2002b).
In this thesis interviews were conducted as we felt that is the best way of really getting a deep understanding of how the selected companies build their brand equity. There are different kinds of interviews including highly structured, semi-structured and unstructured (cf. Merriam, 2002b; Johannessen & Tufte, 2002/2003; Daymon & Holloway, 2002). The interviews we conducted were semi-structured meaning that an interview guide was prepared before the interview (Johannessen & Tufte, 2001). The interview guide contained themes to be covered in the interview and also some specific questions.
There is no strict order to follow in a semi-structured interview, and not all interviews will be sequenced in the same way (Daymon & Holloway, 2002). A lot of room will be left for improvisation and adaptation to given answers (Merriam, 2002; Carson et al. , 2001). Although the same interview guide was used for all interviews, the order of the themes and questions was not the same. It was the flow of the conversations that determined the sequence and also inspired new questions. The length of the interviews is also discussed in the method literature (cf. Berg, 2001; Daymon & Holloway, 2002).
Berg (2001) is of the opinion that no correct answer can be given to which is the most appropriate length of an interview. It has simply to do with the research questions and what the subject of the study is. The length of the interview is said to not give any evidence to the quality of the information given or the interview itself, it all depends on the specific case. Although Berg (2001) does not believe that respondents necessarily back out of an interview engagement because it is time consuming, our experience was that informants were not willing to spare more than an hour.
Daymon and Holloway (2002) determine that in cases like that, it is important to go with the informants’ wishes. Therefore, when calling to book the interviews we have accepted the time allowance given to us but still made room in our own schedule for an extended interview should the respondent be willing. To keep the respondent stimulated and interested in the interview it is important to prepare simple and short questions and make sure that only one question is asked at a time (Patton, 2002).
It is also important to be encouraging during the conversation so that the respondent feels that what he or she says matters and thus stays motivated to give extensive answers. Despite the length of the different interviews differed, we were always the ones concluding the interviews and hence the time we were given was enough. 22 Method Tape-recorder In order to take the best care of the material collected during the interviews a taperecorder was used. The positive and negatives sides of using such a device is being debated in method research (cf.
Carson et al. 2001, Easterby-Smith et al. , 2002; Ejvegard, 2003) but a conclusion from the debate can be drawn that it is a matter of preference. By using a tape-recorder it will be easier for the interviewer to concentrate on what the respondent says and by that come up with more questions related to his or her answers (Patton, 2002; Daymon & Holloway, 2002). However, since the respondent knows about the tape recorder, he or she might become distracted and the answers may not be as comprehensive as they would without recording (Easterby-Smith et al. 2002; Ejvegard, 2003). After the interview has been conducted and recorded the tapes should be transcribed (Carson et al. , 2001; Daymon & Holloway, 2002). By doing this as soon as possible the information is fresh in mind and the researcher will not have forgotten what the person had to say (Murray, 2003). The transcription will help the authors to look back at the notes and double-check answers and both data processing and comprehensiveness is improved (Carson et al. , 2001; Daymon & Holloway, 2002; Widerberg, 2002).
In our study the transcription started as soon as possible after each interview. To minimize the problem of the respondent feeling cautious because of the tape recorder we explained that it was used for administrative purposes only, as a way to fully grasp everything that was being said and that the tapes would be destroyed after the study was completed. None of the respondents had any objections to be recorded and we felt that they were not restrained by its presence. Confidentiality and Anonymity According to Berg (2001) it is important to consider issues of consent which s related to the topics confidentiality and anonymity. Confidentiality is obtained when all elements that might reveal the identity of the subject is removed from the research. Anonymity on the other hand simply involves the removal of the subject’s name. To address the issue of confidentiality and anonymity we let the involved companies read our empirical findings before having to decide if they wanted to be anonymous or not. This way they could object to material that they perceived as misinterpreted or take away information that they wanted to be kept confident.
None of the companies insisted on being anonymous after reading the empirical findings, hence the full name of the companies and the respondents will be displayed in the thesis. The companies only wanted to change small mistakes in the text and nothing of importance needed to be taken away. 3. 3 Data Analysis In a qualitative study the data collected from each interview is broken down and arranged into different themes (Holloway, 1997; Denscombe, 1998). This process is ongoing continuously throughout the data collecting process (cf. Merriam, 2002b; Hollensen, 1992/1995; Taylor & Bogdan, 1984).
Hence, the boundary between collection and analysis of the data is somewhat blurred (Hollensen, 1992/1995). The ongoing 23 Method analysis is done by the researcher by noticing and keeping track of emerging themes in the different interviews and then evolving the interview guide to suit these new themes (Taylor & Bogdan, 1984; Merriam, 2002b; Johannessen & Tufte, 2002/2003). When themes are found they should be interlinked with one another in order to easier facilitate their explanation (Daymon & Holloway, 2002). New questions should be formulated if the collected data challenge or modify previous findings (Holloway, 1997). If he analysis is delayed until after all the data is collected, one might also miss out on gaining more reliable and valid data (Merriam, 2002b; Daymon & Holloway, 2002). When analysing it is important that the researcher is attentive to the potential danger of interpreting the data in the desirable way. By doing so, the results will be biased and not as convincing as they could have been, had the information been interpreted as it should (Darmer, 1992/1995). As Holloway (1997) and Denscombe (1998) suggest, we have throughout the data collection process continuously analysed the gathered data and adjusted the questions to emerging themes.
All the collected data was also organised into the different themes, and we tried to be aware of our preconceived ideas, and not let them affect the analysis. We did this by constantly checking our transcripts and by having an ongoing discussion amongst ourselves to ensure that we interpreted the data in the same way. 3. 4 Research Quality In a study it is important to show that the quality of the study is good. A study can be highly reliable and at the same time lack validity, if so, a reasonable level of quality has not been achieved (Ejvegard, 2003).
The terms reliability and validity stem from quantitative research and not all researchers believe that the two concepts can be used for qualitative research (Daymon & Holloway, 2002). In this thesis, however, the two terms will be used along with an explanation on how to understand them in the setting of a qualitative study. 3. 4. 1 Reliability The reliability of a study is determined by the ability to, through the use of the same method, reproduce the same results as have been previously achieved (Widerberg, 2002). Ejvegard (2003) expresses reliability to be the degree to which the measuring instrument can be trusted.
If a result is not reproduced with, for example the same questionnaire, reliability of the study has not been achieved. The problem with reliability in qualitative studies is that the main tool in the research is the researcher himor herself, and he or she is influencing and interpreting the data based on personal background. Hence it might be very hard to reproduce the same results. To be able to overcome this problem as much as possible, the researcher can record data, methods and decisions taken throughout the study (Daymon & Holloway, 2002).
The notion of thick description was first used by Ryle (1968) who coined the expression to signify the difference in meaning of two seemingly alike acts. He explains thick description to be when not only the mere act, but the underlying meaning of an act is brought forward and given attention. Even though two people (or two com- 24 Method panies) are engaging in the same activity, their reasons for doing so might differ greatly. If only a thin description is given, the act is just reported and then found to be the same, whereas the thick description will explain the differences behind the acts and how they differ.
To attain reliability an interview guide with easily comprehensible questions was used (see Appendix 1). As a problem with qualitative studies is that the researchers are influencing and interpreting the data, we have recorded and transcribed each interview and tried to be as objective as possible when analysing the collected data. We have also tried to bring forward the underlying intentions of the acts we were told of during the interviews. Through these actions we have tried to achieve reliability. 3. 4. 2 Validity
Validity refers to the notion that what is meant to be studied is actually studied (Widerberg, 2002; Merriam, 2002b; Ejvegard, 2003) and many researchers claim that validity is what is most important in qualitative studies (Daymon & Holloway, 2002). Three different aspects of validity can be noticed; internal validity, generalisability and relevance (Daymon & Holloway, 2002). Internal validity is achieved when the study correctly reflects the aim of the study and when the findings are accurate. To assure internal validity in our thesis, we have let the respondents in each studied case reflect upon the results of each made interview as ecommended by Carson et al. (2001) and Merriam (2002b). Through this act the occasions where any misunderstandings may have occurred have been corrected. Since the aim of the thesis is to study small service firms, a weakness could be that one of the companies exceeds the size definition. However, the fact that the limit is exceeded with one employee will probably not make a great difference for the results. Since the recruitment took place after the study was commenced, the way the company operates to build its brand has most likely not yet changed.
In our thesis, the age of the companies has not been taken into consideration. Still, we do not believe that the results have been affected negatively, even though one of the companies is much older than the other ones. Generalisability is sometimes called external validity and indicates whether the results can be applied to fit other populations that are similar but have not been studied. Generalisations cannot be made in the same way in qualitative studies as in quantitative because the studied population has rarely been randomly selected (Carson et al. , 2001). Not all researchers (Carson et al. 2001; Johannesson & Tufte, 2002/2003) agree that generalisability is something to strive for in a qualitative study as the research is deep rather than wide and the data will therefore be specific for each studied case. For qualitative research Johannesson & Tufte (2002/2003) prefers to use the notion transferability which is achieved when the results of a study also can be used outside the study and be applicable in other settings. To achieve generalisability (or transferability), features that are specific to the case can be related and compared to typical cases (Carson et al. , 2001).
By comparing findings from selected cases to previous theory, patterns and concepts can be tested (Daymon & Holloway, 2002; Car- 25 Method son et al. , 2001). The result may be that the theory can not be generalized to the specific setting. For this thesis, the intention is to study if Berry’s (2002) service branding model is applicable to the way small service firms operate and will together with the rest of the presented frame of reference serve as a typical case. The findings of the thesis may not be generalisable to all service firms, but are more likely to be generalisable to services similar to those offered by IT-consultancies.
An example of similar services could be those offered by management consultancies while services such as hair cuts might be too different. According to Glaser and Strauss (1967, in Denscombe, 1998) and Lincoln and Guba (1985, in Denscombe, 1998) a study achieves relevance by being theoretically relevant. Relevance of the research can be achieved either by contributing to existing knowledge, by addressing practical problems, by being relevant in the current time, or by having benefits for the researcher. Daymon & Holloway (2002) argues that a study can achieve relevance by finding out how something works.
In previous literature we have found a gap in the field of brand equity, in relation to small service firms, and by addressing this lack of previous research we will contribute to existing knowledge. The knowledge we have achieved is related to how something works, and these findings are of immediate interest as the service sector is continuously growing. By these three measures we have tried to achieve relevance. 26 Empirical Findings and Analysis 4 Empirical Findings and Analysis This chapter starts off by presenting the four sampled companies.
The empirical findings are then presented together with an analysis where they are related to the frame of reference. The empirical findings and analysis are structured according to the research questions presented in the introductory chapter. A summary of how each section affects the answer of the research questions is also given. 4. 1 The Four Cases All information is based on the four interviews with the representatives of the companies presented below. In this section we state the names and positions of each respondent together with the date of the interview.
Hence, the term personal communication and the current date will not be used further on when presenting the retrieved information. 4. 1. 1 Pdb Pdb was founded in 1983 and is situated in Jonkoping. The company offers ITsolutions within the area of system development. Due to recent recruitment Pdb now has 50 employees. The person we interviewed at Pdb was Allan Hagborg who is the marketing manager of the company and has been with Pdb since 1996. The interview took place on the 12th of April, 2005 at Pdb’s head office in Jonkoping. 4. 1. 2 Proserva
Proserva was founded in August 2002 and can be said to be based on three previous companies, IQ InformationsQvalitet, Iterium and S-data. These three companies were all acquired by the Norwegian group Intellinet and grouped into Intellinet Sweden in 2000. Although not having any problems and being successful, Intellinet Sweden was brought down with the rest of the company when the Norwegian part of the group went bankrupt in 2002. The CEO of Intellinet Sweden then decided to start up a new company – Proserva. Today Proserva has 35 employees whereof 15 work in Jonkoping.
The person we interviewed at Proserva was Thomas Bethmarker who works with marketing at the company and has been with the organization from the start. The interview took place on the 29th of March, 2005 at Proserva’s sales office in Jonkoping. 4. 1. 3 Imano Imano was founded in 2002 and has branches in Gothenburg, Jonkoping and Vaxjo. With a strong industry focus on the forest- and agricultural sector, a differentiation from other IT-consultancy firms has been made. Imano has grown successfully during its first years and has now come to a stage where a more strategic way of expanding might be necessary.
The focus has simply been on consulting and so far no ex- 27 Empirical Findings and Analysis plicit thought has been given to build the brand. Imano has thirteen employees, all working as consultants. The person we interviewed at Imano was Niklas Johansson who is one of the founders of the company and he is also a member of the managerial group. The interview took place on the 8th of April, 2005 at Imano’s head office in Gothenburg. 4. 1. 4 Persistent Solutions Persistent Solutions was founded in 2000 and is situated in Jonkoping.
The customers are mainly in the telecom industry and are offering service solutions including a combination of software and professional services. So far the company has made a profit every year since it was started. Also at Persistent solutions the focus has been on consulting and hence no explicit thought has been given to build the brand. Today the company has grown to employ 17 people. The person we interviewed at Persistent Solutions was Mats Berggren who is one of the founders of the company. The interview took place on the 13th of April, 2005 at Persistent Solution’s head office in Jonkoping. . 2 How do small service companies present their brand in order to enhance brand awareness and brand meaning? According to Berry (2000), service companies use their name, advertising, and symbolic associations to present their brand. The specific ways each company works to present its brand is described and analysed below. 4. 2. 1 Name According to Berry (2000) the customer first comes into contact with the company name and hence a name that portrays the right image and purpose should be chosen. This has been considered primarily in Imano, Persistent Solutions, and Proserva but also at Pdb.
The name Imano is influenced by the fact that one of the founders is Italian. Mano means hand in Italian and the thought is to interpret Imano as “in hand”. The reason for this name is that the company’s philosophy is to support their customers and symbolically “hold their hands” during a project. Imano does not want to take over when hired by a customer, instead they want to be supportive and help them in everyway they can. Persistent Solutions is also meant to be an indicator of how the company works, that the solutions offered are persistent.
The systems offered by the company are large and are often running for ten years. This means that it takes quite a while to develop them, and also a long time to change them. The persistency of the systems and the customer relations it entails is why the name was chosen. For Proserva, the name was chosen in order to make associations in the customers mind to create the right picture, where the will is to be thought of as professional and to asso- 28 Empirical Findings and Analysis ciate to computer servers. There is a play on words and this can also be seen in the catchphrase “The power is served”1.
The full name of Pdb is Pdb Datasystem AB although Pdb is the name always used. Pdb is short for “Program och Datortekniska Byran” which is a technical term as IT was very technically oriented when the company was founded. It can hence not be said that the company is trying to create an image through the company name. However, there is a process going on at the moment where the thought is to start using the company name more like a quality sign and instead focus attention on the trade marked slogan “IT in Smalandska”2.
The reason behind the choice of the slogan is that the associations with Smaland are considered to be positive and interpreted as standing for being hardworking, thrift and entrepreneurial, an image that would also be desirable for Pdb to have. For service companies the authors Dall’Olmo Riley & de Chernatony (2000) has identified that it is quite common to use the company name instead of branding the individual services. The companies might therefore have their quality evaluated based on their corporate brand and the size of the company. Using the company name as a brand can be seen in all of the articipating companies. Having the quality of the brand based on the size of the company can be seen as accurate since the biggest company, Pdb, is also the one that most frequently attracts customers from outside its network. Only Proserva and Pdb explicitly separate between the different services in their marketing. The services, however, do not have their own brand names, the names used for separating the services are the generic names. Using the company names as the brand name is in line with Keller (1993) who says that one possible criterion when choosing brand name for a service can be simplicity.
Because all the companies work within IT, the services provided are pretty complicated and the solutions offered are customized for each specific case. The different services might be designed differently for different customers, and hence the generic names sometimes have different meanings. All the companies are using the company name as its brand rather than individual brand names for the separate services. As the company name is then portrayed in all situations it is more often exposed to customers.
The customers will then probably become more aware of the company name than they would have if each individual service had its own name, and brand awareness will most likely increase. For the three companies Proserva, Persistent Solutions, and Imano, that have an underlying meaning of their company names, the name can be seen as having influence on the meaning of the brand. Pdb on the other hand does not have an underlying meaning for their name, the brand meaning has thus been influenced by other factors than the name. 1 2 In Swedish: ”Kraften ar serverad”. In Swedish: “IT pa Smalandska”.
Smalandska is the dialect spoken in Smaland, which is a county in Sweden. 29 Empirical Findings and Analysis 4. 2. 2 Advertising All four companies have a webpage, though the attitude towards it differs greatly. For Imano it is the only advertising tool, but still it is “… a constant bad conscience” as it is not worked on actively enough. Although recently changed and improved, a need and will to work with it more actively in the future has come to the surface. Proserva on the other hand uses its webpage very extensively, “The webpage is our absolute core and I update the page several times a week”.
The webpage is constantly referred to in contact with customers and therefore it is important that the information available is not out of date. The webpage is not really seen as a marketing tool for Persistent Solutions, “It’s not important in itself. It’s more something that’s expected…”. It is recognised however that the webpage is a useful tool when meeting someone who has never heard of the company and it can be used as a complement in the search for information but “…nothing is sold from the webpage”. At Pdb as opposed to the other three companies, advertising in the form of signs and posters is the main tool.
When trying to find the right spots for posting signs there is a will to be creative. An example of a spot is by the check-in area and baggage claim at Axamo airport in Jonkoping where a lot of decision-makers’ attention can be caught whilst on business trips. The signs consist both of the slogan and pictures of the consultants in the customers’ business environment. The company name and slogan is also displayed at different places at Kinnarps Arena where the local ice-hockey team HV71 play their home-games. During all power plays and box plays the slogan appears on the screen, “everyone who has been to an ice-hockey game knows about this”.
By displaying the name and the slogan in many different locations where prospective and current customers are assumed to be, a higher level of awareness is most likely created. It is not just a way of creating more awareness among prospective customers; we believe that it is a good way of keeping existing customers aware of the brand. None of the other companies use this kind of marketing effort and advertising in papers and magazines is not common either. Imano does not spend any money at all on advertising at the moment, but in the future ads might be placed in industry magazines focused on the forest- and agricultural sector.
Once or twice a year there is image advertising for Proserva in computer-focused magazines, preferably if there is an appendix about outsourcing in order to attract the right target audience. The reason why not more advertising is made is that the activities of the firm are very niched, and it is believed that advertising would be a waste of money. This can be related to the fact that small companies often can exploit and target smaller market niches that is too small for large companies (Bjerke & Hultman, 2002).
Advertising in the form of ads in papers or magazines is not done at Persistent Solutions either as “I don’t believe it’s very rewarding, it’s pretty hard as the solutions are so big and are to be used by hundreds of people…”. In the future ads might be considered in industry magazines, but the timing must be right, either when a new version or a new release is being made. Pdb stands out again by placing an ad in every issue of IBM’s monthly membership magazine. Several articles have also been contributed and published in that magazine and these articles can be said to be veiled marketing as they are put together by an advertising agency.
These articles are more specific compared to the traditional ads: “…we explain what we’re good at… it’s a little more technical”. The articles have 30 Empirical Findings and Analysis been very successful, “they have given us an enormous response and it’s actually the first time prospective customers have started to call us”, and therefore new articles will continuously be produced although not all are expected to be published. Using ads in papers and magazines is an expensive advertising method, and therefore not expected to be used to a large extent, due to the lack of resources in small businesses (Burns, 2001).
Writing articles, as in the case of Pdb, seems like a good idea since the company gets a chance to explain in more detail what it is offering. Articles are longer and more informative than ads, and by reading it, more awareness will be created. The main difference between Pdb and the other three companies however is that Pdb are using an advertising agency to produce all ads and printed materials. Everything that is presented to external partners goes through them first. As Lory and McCalman (2002) has pointed out, it is quite