Spillover Effects of Brand Alliance and Service Experience on Host Brands in Loyalty Program

143 Pages·2017·2.22 MB·English

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Marketing Theses & Dissertations Department of Marketing
Fall 2015
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Gulfem Cigdem Kutlu
Old Dominion University, [email protected]
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Kutlu, Gulfem C.. "Spillover Effects of Brand Alliance and Service Experience on Host Brands in Loyalty
Program Partnerships" (2015). Doctor of Philosophy (PhD), Dissertation, Marketing, Old Dominion
University, DOI: 10.25777/3b9e-0k19
https://digitalcommons.odu.edu/marketing_etds/2
This Dissertation is brought to you for free and open access by the Department of Marketing at ODU Digital
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SPILLOVER EFFECTS OF BRAND ALLIANCE AND SERVICE EXPERIENCE ON
HOST BRANDS IN LOYALTY PROGRAM PARTNERSHIPS

By:
Gulfem Cigdem Kutlu
B.A. July 2000, Marmara University, Turkey
M.B.A. May 2005, Radford University

A Dissertation Submitted to the Faculty of
Old Dominion University in Partial Fulfillment of the
Requirements for the Degree of
DOCTOR OF PHILOSOPHY
BUSINESS ADMINISTRATION – MARKETING
OLD DOMINION UNIVERSITY
NOVEMBER 2015

Approved by:

_______________________
Yuping Liu-Thompkins (Chair)

______________________
John B. Ford (Member)

_______________________
Edward P. Markowski (Member)
ii

ABSTRACT

Three studies explored the consequences of loyalty program partnership on individual
brands. The first study sought to determine what kinds of brand equity and category similarity
would result in customers’ higher perceived attractiveness of and intention to join the loyalty
program partnership. The study finds that higher category similarity increases both perceived
attractiveness and joining intention towards a loyalty program partnership. When loyalty
program partnership consisted of similar category businesses, individual brands also experienced
changes to their brand equity levels. Low equity brands when partnered with high equity brands
experienced a significant improvement in their brand equity levels. A high-high pairing
increased the brand equity for the both host and partner brands while a low-low pairing increased
the brand equity for the host brand.
The second study investigated if participation in a loyalty program partnership affected
the brand identity distinctiveness of the host brand. Contrary to expectations, host brand did not
experience any loss in brand identity distinctiveness after a loyalty program partnership. The
third study examined the possible effects of negative spillover in a loyalty program partnership in
a partner service failure situation. In line with predictions, this study found that host brands were
not immune to service failures by the partner brand. Even though the host brand did not cause the
service failure, they were negatively affected by the service failure due to their association with
the partner brand through loyalty program partnership. Negative effects on the host brand
included decline in brand equity and lessened future behavioral intentions towards the host
brand. Category similarity was again a significant factor in determining the effects of the
negative spillover among the partner brands. Decline in the host brand equity was significant
iii

when the partner brand causing the service failure was a similar brand. Findings of these studies
are helpful in understanding the pros and cons of loyalty program partnerships and can help
managers select the best partners for their loyalty programs.
iv

Copyright, 2015, by Gulfem Cigdem Kutlu, All Rights Reserved.
v

ACKNOWLEDGEMENTS

It’s a great pleasure to thank those who made this dissertation possible. It was a hard and
a long journey. I offer my gratitude to all of those who supported me throughout this dissertation.
First, I would like to thank my doctoral committee advisor, Dr. Yuping Liu-Thompkins
for the time she spent in helping me create, refine and complete this dissertation. She encouraged
me whenever I doubted myself and guided me through the challenges of this dissertation. I am
deeply indebted to her. I would also like to thank my committee members, Dr. John B. Ford and
Dr. Edward P. Markowski, for their valuable expertise and their commitment to the improvement
of this dissertation.
I’m grateful to my mentor Dr. Lynn Saubert and my colleagues and friends at Roanoke
College for all their encouragement and emotional support. I would also like to thank my friend
Susan for seeing me through my highs and lows, and listening to me each day as I completed this
dissertation.
Above all, I’m grateful to my parents, my brother and my grandmother for being my
biggest supporters. Although they did not know exactly what I went through, their unconditional
love, emotional support and never ending encouragement helped me through this journey. I
couldn’t have done this without them.
vi

TABLE OF CONTENTS
ABSTRACT ........................................................................................................................ ii
ACKNOWLEDGEMENTS ................................................................................................ v
LIST OF TABLES ............................................................................................................. ix
LIST OF FIGURES ............................................................................................................ x
CHAPTER I ........................................................................................................................ 1
INTRODUCTION .............................................................................................................. 1
CHAPTER II ....................................................................................................................... 6
LITERATURE REVIEW ................................................................................................... 6
BRAND EQUITY – DEFINITION AND MEASUREMENT ........................................... 6
What is Brand Equity? ................................................................................................................. 6
Measuring Brand Equity ............................................................................................................ 12
Benefits from Brand Equity ....................................................................................................... 14
BRAND ALLIANCE - DEFINITION AND ITS EFFECTS ON BRAND EQUITY ...... 16
Potential Benefits and Problems Associated with Brand Alliance ............................................ 16
Determinants of Brand Alliance Success and Failure ................................................................ 17
RESEARCH CONTEXT – LOYALTY PROGRAM PARTNERSHIPS ........................ 20
Loyalty Program Definition ....................................................................................................... 21
Consequences of Loyalty Program Partnership ......................................................................... 23
Summary of the Key Gaps and Research Questions .................................................................. 25
CHAPTER III ................................................................................................................... 28
PRELIMINARY QUALITATIVE ANALYSIS............................................................... 28
CHAPTER IV ................................................................................................................... 33
STUDY 1 .......................................................................................................................... 33
HYPOTHESES FORMULATION ................................................................................... 33
METHODOLOGY ........................................................................................................... 39
Design ........................................................................................................................................ 39
Pretests ....................................................................................................................................... 39
Pretest 1 .................................................................................................................................. 40
vii

Pretest 2 .................................................................................................................................. 42
Pretest 3 .................................................................................................................................. 42
Main Study Procedure ................................................................................................................ 43
Measurements ............................................................................................................................ 45
Manipulation Checks ................................................................................................................. 46
Tests of Hypotheses and Results ................................................................................................ 47
CHAPTER V .................................................................................................................... 56
STUDY 2 .......................................................................................................................... 56
HYPOTHESES FORMULATION ................................................................................... 56
METHODOLOGY ........................................................................................................... 60
Design ........................................................................................................................................ 60
Main Study Procedure ................................................................................................................ 60
Measurements ............................................................................................................................ 62
Manipulation checks .................................................................................................................. 62
Tests of Hypotheses and Results ................................................................................................ 63
Study 2b (United Airlines) ......................................................................................................... 65
Main Study Procedure ................................................................................................................ 65
Measurements ............................................................................................................................ 66
Manipulation checks .................................................................................................................. 66
Tests of Hypotheses and Results ................................................................................................ 67
CHAPTER VI ................................................................................................................... 70
STUDY 3 .......................................................................................................................... 70
HYPOTHESES FORMULATION ................................................................................... 70
METHODOLOGY ........................................................................................................... 76
Design ........................................................................................................................................ 76
Pretest ......................................................................................................................................... 76
Main Study Procedure ................................................................................................................ 77
Measurements ............................................................................................................................ 79
Manipulation Checks ................................................................................................................. 79
Tests of Hypotheses and Results ................................................................................................ 79
CHAPTER VII .................................................................................................................. 83
viii

DISCUSSION AND RECOMMENDATIONS ................................................................ 83
SUMMARY OF FINDINGS ............................................................................................ 83
LIMITATIONS AND FUTURE RESEARCH ................................................................. 85
MANAGERIAL IMPLICATIONS .................................................................................. 87
REFERENCES ................................................................................................................. 90
APPENDICES .................................................................................................................. 99
Appendix 1: Pretest 1 Questionnaire ......................................................................................... 99
Appendix 2: Pretest 2 Questionnaire . ..................................................................................... 104
Appendix 3: Pretest 3 Questionnaire . ..................................................................................... 107
Appendix 4: Study 1 Questionnaire ......................................................................................... 111
Appendix 5: Study 1 Control Groups Questionnaire ............................................................... 116
Appendix 6 - Study 2 Questionnaire ........................................................................................ 118
Appendix 7 – Study 2 Control Group Questionnaire ............................................................... 123
Appendix 8 - Pretest 4 .............................................................................................................. 125
Appendix 9 - Study 3 Questionnaire ........................................................................................ 126
VITA …………………………………………………………………………………...131
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LIST OF TABLES
TABLE PAGE
1. Brand Equity Dimensions ………………………………………………………10
2. Preliminary Airline Analysis …………………………………………………....30
3. Study 1 Sample Characteristics …………………………………………………44
4. Study 1 Scales …………………………………………………………………...46
5. Study 1 Mean Joining Intention …………………………………………………48
6. Study 1 ANOVA for Joining Intention ………………………………………….49
7. Study 1 Mean Perceived Attractiveness ………………………………………...50
8. Study 1 ANOVA for Perceived Attractiveness …………………………………51
9. Study 1 ANOVA for Host Brand Equity Change ……………………………….53
10. Pre and Post Partnership Host and Partner Brand Equity Measures …………….55
11. Study 2 Sample Characteristics …………………………………………………61
12. Brand Identity Distinctiveness Scale …………………………………………....62
13. Study 2 Pre and Post Partnership Host Brand Identity Distinctiveness …………64
14. Study 2 ANOVA for Host Brand Identity Distinctiveness Change ……………..64
15. Study 2b Sample Characteristics ……………………………………………..…66
16. Study 2b Pre and Post Partnership Host Brand Identity Distinctiveness ……..…68
17. Study 2b ANOVA for Host Brand Identity Distinctiveness Change ………...….69
18. Study 3 Sample Characteristics …………………..……………………………..78
19. Study 3 Pre and Post Service Failure Host Brand Equity Measures ………...…..80
20. Study 3 Pre and Post Service Failure Host Brand Behavioral Intentions……..…81
21. Study 3 ANOVA for Host Brand Equity Change ……………...………………..82