Assessing CRM indicators effects on creating brand image at health care services

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1 Available online at Reef Resources Assessment and Management Technical Paper ISSN: RRAMT 2013 Vol. 38(2), 2013, 5 Assessing CRM indicators effects on creating brand image at health care services Khatere Gheysari a1, Atefeh Bemani b, a lecture of business management. PayameNoor University, Department of Management, BOX , Tehran, Iran b lecture of business management.payamenoor University, Department of Management, BOX , Tehran, Iran Abstract: This survey examines the relationship between Customer Relationship Management (CRM) effectiveness indicators and creating a brand image in health care service sector, exclusively in health care services. In this case, six important factors helping with creating a positive brand image in customers mind due to receiving health care service have been defined. According to the results we can say that CRM factors could play an effective role in creating a positive image in people who have received health care services. The sample used in the survey consists of 135 patients hospitalized in the surgery section in five private hospitals in Mashhad and percent are women and percent are men Published by RRAMT France Ltd. Keywords: brand equity, image, service quality, CRM, customer satisfaction, customer commitment 1. Introduction Positive brand image is one of the most important concepts in business processes, Because the brand success can let the marketers create competitive advantage through becoming flexible against the outside competitors' pressure and becoming able to create some obstructions for inside competitors. Business brand plays a significant role in the service companies. Because the powerful increases the trust to intangible products and services, and empowers customers to picture them better and it also intensifies further purchases and the attitude to them and it can diminish probable risks in buying service as well. In the research hospitals, that are one of the biggest service companies, have been surveyed as the goal society and due to the fact that these institutes are not allowed to do any advertisements legally and they don t represent services with credit features (services that the satisfaction with them can be evaluated only after using them and after some time past) so they have to try to attract and maintain the customers using some powerful variables indirectly. In the research we have tried to find a way to create a positive image of the hospital in customers; mind using effectiveness CRM indicators. Effectiveness CRM indicators prepare a way to express the purposes and requests of organization at all levels, they also help with evaluating strategic goals improvement continuously, and cause an augment in probability of change speed and rate and have a power to improve businesses. Effectiveness CRM indicators consist of four dimensions: customer knowledge, interaction, customer value, customer satisfaction. [4]

2 Problem statement: Reef Resources Assessment and Management Technical Paper, Vol. 38(2), 2013,, pp This study examines the relationship between effectiveness CRM indicators and their effects on creating positive image in health care customers minds. Research necessity and its goals: The researches on service branding have expanded so slowly and they are at the primary concepts level, so we work on it here. Some researchers believe that branding for services is more vital than for products, because being intangible in services make it difficult for customers to evaluate their quality. Service branding enables suppliers to differentiate their services from those from competitors and due to that reduce in purchasing services will be diminished. Krishnam and Hartlin stated that all products and services can have one of the following characteristics: tentative, of credit, of research [12]. Research characteristics like brand name and price can be evaluated and chosen before buying; like laundry services. Tentative characteristics such as emotional attractiveness or being amusing or being proper can be evaluated only during consuming services; like hotels, restaurants and travel services. Credit characteristics can be evaluated only after being used, such as health care and medical processes and legal representatives. The brand equity importance depends on the characteristic type and the fact that services are mostly creditbased is one reason that made us research on making it tangible and creating positive image using powerful tools like CRM indicators and brand equity. 2.Theoretical bases: 2.1.Defining concepts: Brand equity: There are very much yet equal definitions for brand equity. For example Bell and Halberc state: brand equity is natural and inseparable value that is hidden in the brand name and it appears when consumers wishfully pay more money to acquire the same quality level because of brand name attractiveness comparing to other brand names[7]. Service quality: Gronroos divides service quality into two sections that are technical and functional. Technical quality expresses what the consumer receives really from services and functional quality or customer service is a way in which the service is delivered to the customer as an important factor [6]. Hospital image: Brand image consists of the symbolic definitions that customer considers as unique features and a product or service characteristics and it relates to the presented product as a symbol for the brand in the customer s mind [8]. Kotler states that the consumer s view of the hospital or his image is comparative. A positive image can help with improving one s strategic position among other competitors. A good image can be created through customers' behavioral trust that is produced by their past experiences[10]. It can be expected that brand image can be useful, especially where it is difficult to differentiate the product or service from others based on quality characteristics. [8] : Danney and Kannon defined trust as having confidence to an institute or person and being optimistic about it. In the case of health care services trust can create a strong relationship between the customers and service providers in a way that the hospital can prepare better preservation services to the patients, gain their trust and keep profiting as well[3]. Customer satisfaction: Customer satisfaction is a person s pleasant feeling that is caused by comparing the product function and his expectations. If the product function is more that his expectations, the customer will be satisfied and if the product function is less than what he had expected, the customer will not be satisfied. [11] Customer Relationship Management (CRM): All organization's components are related to the customers in an intelligent way. Barnet states that CRM s goals can be in the group of cost saving, income increasing and strategic effects, that cause in gaining more benefits, having better improvement, customer satisfaction increasing and reducing in marketing cost and general sale cost. As it was said in introduction part, in this research regarding CRM effectiveness indicators, trust variable was taken from customer value perspective, service quality variable was taken from interaction with customer perspective, loyalty 371

3 Reef Resources Assessment and Management Technical Paper, Vol. 38(2), 2013,, pp variable was taken from customer value perspective and satisfaction variable was taken from customer satisfaction dimension and we called them factors effective in creating successful customer relationship management [4]. Relationship commitment: Commitment is considered as one of the most powerful factors to predict voluntary decisions to stay in a relationship. Commitment is the two parties' desire to enter in a mutual security to create a short time investment and in the hope of a long time profit. It also can be defined as the desire to expand a strong relationship and keeping the relationship. [5] Loyalty: Oliver defines brand loyalty as a deep commitment to repeat buying or encouraging buying a service or product continuously and states that brand loyalty is a customer s background to buy a special mark or name in a product group regularly [14] Literature review Table1. The research literature review and the hypotheses researchers results hypotheses Kim, h et al.(2003) The evaluation of relationship between trust H1 and brand equity Kim, h et al.(2005) CRM is a factor that improved brand equity Aaker, DA (1991) Keller,K(1993). Pappu,R.,Quester,P(2006) Wooldridge.B, (2004) Introduction indicators :satisfaction,loyalty,relationship,quality for evaluating Brand equity Introduction indicators :Brand image,awareness for evaluating Brand equity The evaluation of relationship between satisfaction and brand equity[15] The evaluation of relationship between brand equity and brand image[16] H4 and H5 H6 H2 H Hypotheses development and conceptual model According to the previous discussions and literature review we have developed six hypotheses: H1: has a positive effect on brand equity H2: Consumer satisfaction has a positive effect on brand equity H3: Commitment in relationships has a positive effect on brand equity H4: Brand loyalty has a positive effect on brand equity H5: Service quality has a positive effect on creating image Main hypothesis: Brand equity has a positive effect on creating image Conceptual model: According to the literature review and the hypotheses above, the conceptual model of the research is as the following: 372

4 Reef Resources Assessment and Management Technical Paper, Vol. 38(2), 2013,, pp Research methodology Figure1: the conceptual model This research is naturally a descriptive and operational research that is based on an standard questionnaire that is used in a study by Kang Hun Kim et al in 2006 in south Korea, and has 25 question that are translated into Persian and 135 people have answered to them. Statistical operations are based on Pierson Correlation coefficient and step by step multiple and linear regression and error independence test. Statistical Society and sample The society in research consists of all the patients that are hospitalized in the women and men surgery sections in Mashhad private hospitals. At first all the private hospitals (Pastor Hospital, Sina Hospital, Mehr Hospital, Razavi Hospital, Bentolhod Hospital) were selected. Then sampling was done on all of the patients in the women and men surgery sections in a random way (in simple random sampling each member has an equal and independent chance to be in the sample). So sample size in the research is 135 patients hospitalized in surgery section of considered hospitals that percent were women and percent were men. (Stanley, 1381) 4.Research findings: 4.1.Findings of research variables: Table2: average, standard deviation and the variables' Cronbach alpha Independent variables Questions: M SD α 20,21, Satisfaction 17,18, Relationship commitment 14,15, loyalty 1,2,3, Service quality 5,6,7,8, Brand image 10,11,12,13, Brand equity 23,24,

5 4.1.1.Data analysis Reef Resources Assessment and Management Technical Paper, Vol. 38(2), 2013,, pp patients consisting women and men answered to 25 questions of questionnaire and elemental results can be seen in table1.research hypotheses were analyzed using SPSS and multiple and linear regression tests and correlation coefficient and error independence test. The results are as the following. Statistical analysis results: The efficiency of CRM effectiveness indicators were predicted according to table3, using step by step multiple and linear regression model based on trust (ß=0.502), consumer satisfaction (ß=0.319), commitment to relationships (ß=0.195), loyalty (ß=0.258), service quality (ß=0.321), with determination coefficient of Table3: step by step multiple regression coefficients Beta B Sig Rsquare Satisfaction Satisfaction Relationship commitment Satisfaction Relationship commitment Loyalty Satisfaction Relationship commitment Loyalty Service quality For error independence test in the model, DurbinWatson statistic was used and the result was So there had been no problem in using regression and the mail hypothesis is supported, therefore brand equity cause in creating positive image in consumers' minds Testing first to fifth hypothesis Because the measurement scale was ordinal, Spearman correlation was used to test hypotheses 1 to 5 and the results are shown in table4. Spearman test is used to examine the relationship between two variables. Table4: Spearman correlation coefficients Brand equity Independent variables Sig Spearman correlation % Satisfaction % Relationship commitment % Loyalty % Service quality % Besides the correlation between two variables, brand equity and dependent variable, image was 88.2%. So all hypotheses were supported in a meaningful level (p<0.01) and it was shown that there is a positive relationship between independent variables and creating value and hospital image. 374

6 Reef Resources Assessment and Management Technical Paper, Vol. 38(2), 2013,, pp Discussion and results According to the outcomes of analyzing 135 questionnaires of hospitalized patients in private Mashhad hospitals, all of the six hypotheses were supported. In this research having a positive hospital image is considered as a dependent variable that the independent variables' effect on it was expressed in hypothesis form. With reviewing table3 and beta coefficients that show independent variable's effect on dependent variable, it can be observed that trust and service quality have the most effects on creating brand equity and after them are satisfaction, loyalty and commitment in relationships and this ranking is consistent with answers' averages. Because in this research main goal is to find a relationship between brand equity and hospital image using factors effective in creating successful customer relationships, so variables that had been able to create more brand equity for hospital are trust to the brand and service quality. Suggestions: In this section noticing six hypotheses we can present some operational suggestions for society officers that are service companies' officers and hospitals' managers as following: 1 The first hypothesis confirms the relationship between trust and hospital brand equity. Creating trust is done by effective answering to likely complaints and solving customers' problems and also giving needed information about curing time, type via brochures and CDs to each patient and introducing the hospital and its facilities completely. These factors and using experienced personnel especially having professional doctors are some of the most important factors that can reinforce the relationship between trust and creating value and positive image. 2 The relationship between customer satisfaction and brand equity is supported. Normally it needs more time and thinking in service market especially health care service that is created using a close relationship between the patient and hospital personnel and serving the patient in a good and timely way, and this is the shortest way to create brand equity. 3 The third hypothesis that was supported was the relationship between commitment to relationships and hospital brand equity. One factor that highly reinforces the relationship between doctors and patients is creating longtime relationship between them. Service companies strategy, here hospitals, should be customerbased and based on creating benefits and longtime advantage for both sides, because patients need to doctors that play supportive roles for them and at least their relationship during curing time should be supportive and kindly and this relationship should continue even some time after curing. 4 The forth hypothesis that was supported was positive relationship between brand loyalty and brand equity. Creating brand equity is so difficult and needs so many times because it is an abstract concept. Hospitals can increase brand loyalty among patients and find a direct and easy way to create brand equity using presenting good service in curing section and in official section according to patients' status and also creating facilities for them and introducing hospital and its facilities completely. 5 The fifth hypothesis that is supported is positive relationship between service quality and brand equity. Among many factors determining service quality, trustfulness, that means the ability to deliver needed service in a true way and sensitivity, that means desire to help the customers and delivering timely service, have higher priorities. So using them we can increase qualitative service level and after that we can create brand equity that its importance was explained before. 6 The sixth hypothesis that is positive relationship between brand equity and hospital image is supported. The relationship shows that creating brand equity is the most direct way to create brand image. But how should it be created in relation to health care service that they cannot do any advertisements? One case is to have experienced doctors, because it was shown to using informal interviews that almost all of them consider having professional doctors as the main reason for choosing a special hospital. This cause to create a high value for the hospital, because most people know the hospitals with their doctors, so this has creates a clear hospital image in people's minds and people pay attention to other factors like facilities, service quality and personnel greeting methods after that. A hospital brand value expands through mouth marketing and one hospital's name comes to mind before others unconsciously and this way we can gain the important goal that is longtime benefit. 375

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