Michael D. Hartline Associate Professor of Marketing, School of Business, Samford University, Birmingham, Alabama, USA

Transcription

1 An executive summary for managers and executive readers can be found at the end of this article Brand equity: is it more important in s? Balaji C. Krishnan Assistant Professor of Marketing, Fogelman College of Business and Economics, The University of Memphis, Memphis, Tennessee, USA Michael D. Hartline Associate Professor of Marketing, School of Business, Samford University, Birmingham, Alabama, USA Keywords Brand equity, Brands, Services marketing Abstract While the brand equity associated with tangible goods has received a great deal of attention in the literature, a basic understanding of the nature of brand equity for s has yet to emerge. Most of what is known about brand equity for s is based on theoretical or anecdotal evidence. In addition, the presumed differences in brand equity associated with search-dominant, experience-dominant, and credence-dominan t s has yet to be empirically examined. The objectives of this study are threefold: to empirically test whether brand equity is more important for s than for tangible goods, to test whether the presumed differences in brand equity for search-, experience-, and credence-dominan t s can be confirmed in an empirical examination, and to assess whether consumer knowledge of a product category has an effect on the importance of brand equity across product types. Contrary to suppositions in the literature, the results indicate that brand equity is more important for tangible goods than for s. In addition, the results do not support the presumed differences between types as brand equity for search-dominant s is more important than for both experience- and credence-dominan t s. The same pattern of results is achieved when consumer knowledge of each product category is included as a covariate. Introduction Brand equity has gained renewed attention in recent years (cf. Van Osselaer and Alba, 2000; Yoo et al., 2000). While many definitions of brand equity exist, one of the most widely accepted definitions states that brand equity is the ``added value endowed by the brand to the product (Farquhar 1989, p. 47). Brand equity is important due to the quality-laden informational content that it provides when consumers process information about a particular product. The importance of brand equity has led to many published studies that explore the importance of brand equity in marketing (Aaker, 1991; Keller, 1993). Role of brand equity in marketing of s has not been explored in any detail However, despite its importance, the role of brand equity in the marketing of s has not been explored in any detail. This lack of research is troubling given the fact that s now account for the vast majority of GNP and total employment in the US economy. Due to the inherent differences between goods and s (Zeithaml et al., 1985), the concept of brand equity may require some adaptation for extension into the context of s marketing. Consequently, our limited understanding of brand equity in s begs for more research on brand equity effects and whether these effects differ between goods and s. This is important as researchers are finding differences between s marketing and goods marketing in other areas, but the results are often inconclusive and conflicting (Langford and Cosenza, 1998). The research register for this journal is available at The current issue and full text archive of this journal is available at JOURNAL OF SERVICES MARKETING, VOL. 15 NO , pp , # MCB UNIVERSITY PRESS,

2 Meaningful implications for s marketing management Direct and indirect measures of brand equity The objective of this research is to assess brand equity in the context of s marketing and to compare it to brand equity for goods. The end results of this research should lead to a deeper understanding of brand equity effects for s, as well as some meaningful implications for s marketing management. In the sections that follow, an overview of the relevant literature in brand equity for both goods and s is presented. Next, several research questions are developed based on this review. The results of an empirical study are described, along with the implications that can be derived from the study. Conceptual background Branding and brand equity have been topics of interest to marketing researchers for many years. A brand can be defined as ``a name, term, sign, symbol, or design, or combination of them which is intended to identify the goods and s of one seller or group of sellers and to differentiate them from those of competitors (Kotler, 1991, p. 442). The brand becomes an important tool for the marketer as the consumer uses it as a cue to infer certain product attributes, like quality. Brand equity pertaining to goods has been well researched in the marketing literature. Aaker (1991) and Keller (1993) have both provided conceptual schemes that link brand equity with various consumer response variables. Specifically, Aaker (1991) identified four major consumer-related bases of brand equity: (1) brand loyalty; (2) name awareness; (3) perceived quality; and (4) other brand associations. Keller (1993) proposed a knowledge-based framework for creating brand equity based on two dimensions: (1) brand awareness; and (2) brand image. Similarly, Alba and Hutchinson (1987) proposed that knowledge has two subdimensions of experience and familiarity. The effects of experience and familiarity on consumers brand equity perceptions occur at two levels: (1) brand; and (2) product category. While knowledge about a brand may directly influence the brand equity associated with a particular brand, the knowledge about a product category will influence the brand equity associated with all brands in the product category. The measurement of brand equity has also been a fruitful area of study (Cobb-Walgren et al., 1995; Keller, 1993; Lassar et al., 1995; Park and Srinivasan, 1994). In general, there are direct and indirect measures of brand equity. In the direct approach, an attempt is made to assess the value added by the brand to the product (Farquhar, 1989; Keller, 1993). This approach is closely linked to the accepted definition of brand equity. The indirect approach focuses on the identification of the potential sources of brand equity (Aaker, 1991; Keller, 1993). For example, Aaker (1991) developed a JOURNAL OF SERVICES MARKETING, VOL. 15 NO

3 method to measure consumer-based brand equity based on the four dimensions of: (1) loyalty; (2) perceived quality; (3) associations; and (4) awareness. While both approaches have merit, Keller (1993) argues that the direct and indirect approaches are complementary and should be used together. Branding is more critical for s than for goods Search, experience and credence Brand equity research in s There has been little research (comparatively) in the area of branding in s. The literature in this area has been slow to develop and is primarily conceptual in nature. For example, there is a debate on the type of branding strategy that should be followed for s. Berry et al. (1988) suggest that brands should have distinctiveness, relevance, memorability, and flexibility. Moreover they argue that `` brands should be the firm s name and should not be individualized (Berry et al., 1988, p. 28). Onkvisit and Shaw (1989) take issue with Berry et al. (1988) and recommend the branding of s on an individualized basis. In a more recent study, Berry (1999) found brand cultivation to be a principal success driver in a study of 14 mature, high-performance companies in a variety of industries. Some researchers have also argued that branding is more critical for s than for goods. For example, Onkvisit and Shaw (1989) argue that branding is critical in s because many s are seen as commodities by consumers. Further, the intangible nature of s makes it difficult for consumers to evaluate their quality. Branding a can help consumers by helping to assure them of a uniform level of quality (Berry, 2000). Branding also aids the provider by elevating the above the commodity level to differentiate the relative to competing brands. Bharadwaj et al. (1993) have also argued that branding may be more important for s than goods due to the complexity faced by consumers in the purchase of s. Due to the unique characteristics of s, consumers have a difficult time evaluating the content and quality of a prior to, during, and after the consumption of the (Darby and Karni, 1973; Nelson, 1970). As a result, brand names can help to reduce the risks associated with the purchase and consumption of many s (Bharadwaj et al., 1993). Brand equity by type of All products, whether goods or s, possess search, experience, and credence attributes (Darby and Karni, 1973; Nelson, 1970). Search attributes, such as brand name and price, include product characteristics that consumers can determine and evaluate prior to purchase. Experience attributes, such as fun, emotion, or entertainment value, are those product characteristics that can be discerned and evaluated only after purchase or during consumption. Credence attributes include any product characteristics that consumers cannot determine or evaluate even after purchase or consumption (Darby and Karni, 1973). While most goods are high on search and experience attributes, most s are high on experience and credence attributes. Consequently, consumers are able to determine and evaluate most characteristics only during or after consumption, if they can be discerned at all. Very few s are dominated by search attributes, though dry cleaning is often 330 JOURNAL OF SERVICES MARKETING, VOL. 15 NO

4 Presence of search attributes helps make the purchase less risky Evaluation of products prior to purchase mentioned as an example in the literature. Examples of experience-dominant s cited in the literature include vacations, theme parks, and hotels. Credence-dominant s are thought to include auto repair, medical procedures, and legal representation. It has been suggested that the importance of brand equity for s will vary depending on whether the is dominated by search, experience, or credence attributes. For example, Bharadwaj et al. (1993) proposed that brand equity is more important for s that are dominated by experience and credence attributes. The presence of search attributes helps to tangibilize the, thereby making the purchase less risky for the consumer (Gausseman, 1981; Murray and Schlacter, 1990). The relative lack of search attributes in the vast majority of s makes the purchase task more complex and riskier than for goods. Moreover, in contrast to goods, many s involve costs that cannot be fully determined by the consumer in advance of the purchase decision (e.g. legal s). This contributes to the uncertainty of the outcome and, at the very least, a heightened degree of potential financial loss to the consumer. For most tangible goods, price is established prior to purchase and consumption. For s, however, this is not always possible as many s are associated with variable completion times and/or component elements that are not completely identifiable in advance of purchase or consumption. Consumers typically use a risk-reduction technique in purchasing products. However, the lack of search attributes, along with the heterogeneity of quality, can make the -buying decision more difficult for the consumer (Zeithaml et al., 1985). Thus, the perceived risk in purchasing a is higher than the perceived risk in purchasing a good (Gausseman, 1981; Murray and Schlacter, 1990)[1]. Moreover, among the types of s, consumers perceive the highest risk in purchasing s dominated by credence attributes and the lowest risk in purchasing s dominated by search attributes (Mitra et al., 1999). On the other hand, consumers tend to optimize their cognitive effort through some manner of simplified cognitive processing. This process is often accomplished through associations with familiar brand names and schematic structures in memory (Myers-Levy and Tybout, 1989). Similarly, Levitt (1981) and Berry (1986) recommend that ``tangibilizing the intangible holds the key to success in s marketing. One way to increase the tangible nature of a (and increase the number of search attributes) is to use an extrinsic cue like a brand name. Thus, the use of brand names in s marketing can help to reduce consumers purchase risk and optimize their cognitive processing abilities (Onkvisit and Shaw, 1989). Consumers rely heavily on extrinsic cues, such as brand names, in their evaluation of products prior to purchase (Olson, 1977; Olson and Jacoby, 1972). This reliance on extrinsic cues occurs because the expected costs of search to determine relative quality levels of competing brands exceed the expected gains from search (Nelson, 1974; 1978; Zeithaml, 1988). Hence, when intrinsic cues are difficult to discern, or the cost of the search is high, consumers will rely on external cues. This tendency is likely to be more pronounced when products ± like most s ± are dominated by experience or credence attributes. When credence attributes dominate the offering, consumers are even more likely to rely upon external cues, such as brand name, to aid in their buying task. This occurs because consumers cannot judge the performance of credence-dominant s even after consumption. As a result, it is JOURNAL OF SERVICES MARKETING, VOL. 15 NO

5 expected that branding would be more important in s dominated by credence attributes than those dominated by search or experience attributes. For similar reasons, it is expected that consumers are more likely to rely on brand names for s that are high on experience attributes than those that are high on search attributes. Several questions are offered for examination A sample of 65 undergraduates Research questions Based on extant literature, several questions are offered for examination. First, researchers have proposed that branding is more important for s than for goods (Bharadwaj et al., 1993). However, this proposition has not been tested empirically. Second, researchers have implied that brand equity is more important for s that are dominated by credence attributes than those dominated by experience attributes (Berry, 1995; Bharadwaj et al., 1993). Similarly, brand equity is thought to be more important for experience-dominant s than for search-dominant s. Finally, based on the research of Alba and Hutchinson (1987) and Keller (1993), it is expected that consumer knowledge about a product category will affect the brand equity of all the brands in that category, while consumer knowledge about a particular brand is likely to increase brand equity for that particular brand. Based on previous research and the preceding discussion, the following research questions are proposed: Q1. Is brand equity more important for s than for goods? Q2. Does the importance of brand equity differ among credence-dominant, experience-dominant, and search-dominant s? Q3. As espoused in the literature, is brand equity more important for credence-dominant s than for experience-dominant s? Q4. As espoused in the literature, is brand equity more important for experience-dominant s than for search-dominant s? Q5. Irrespective of product type (good or ), does knowledge about the product category affect the importance of brand equity in that category? Methodology Pretest A pretest was conducted to determine whether consumers perceive differences in the search-, experience-, and credence-dominant characteristics of s as suggested in the literature (Darby and Karni, 1973; Zeithaml, 1988). A convenience sample of 65 undergraduate students at a major southeastern university was used. Study participants were supplied with a list of 25 s (see Table I) and a short explanation about purchase decisions that described how some s can be easily evaluated before purchase, while others cannot be easily evaluated prior to purchase. Participants were then asked to indicate their ability to judge the performance of each on the list before purchase using a nine-point scale ranging from ``Not at all to ``Very well. Participants were then provided with a second explanation about purchase decisions that described how some s cannot be easily evaluated even after consumption. The participants were then asked to indicate their ability to judge the performance of each after using it on the same nine-point scale. The mean scores on both scales for each are shown in Table I. It was decided that s having a high score on both scales would be viewed as search-dominant because their performance can be evaluated 332 JOURNAL OF SERVICES MARKETING, VOL. 15 NO

6 Ability to judge performance before purchase Standard Mean deviation Ability to judge performance after use Standard Mean deviation Education Restaurants Exercise clinics Banking Movie theaters Telephone s Fast food Spectator sports Insurance Legal s Mail s Automobile association Salons Car rental Securities trading Dry cleaning Hair cutting Lawn mowing Veterinary s Electrical utilities Utilities Health care/surgery Plumbing s Pest control s Taxi s Table I. Pretest results: ability to judge performance Consumers perceptions not entirely consistent with suppositions before purchase. Services having a low score on the first scale and a high score on the second scale were classified as experience-dominant because this relationship indicates that performance cannot be evaluated prior to purchase, but that performance can be evaluated after consumption. Similarly, s having low scores on both scales were viewed as credence-dominant because consumers cannot evaluate performance after consumption. The validity of the pretest was established based on the fact that the respondents did not identify any as being easy to evaluate prior to purchase, but difficult to evaluate after consumption (i.e. a high score/low score relationship). Overall, the results of the pretest indicated that consumers perceptions of the search-, experience-, and credence-dominant classifications were not entirely consistent with suppositions expressed in the literature. Based on these results, a focus group was conducted with four respondents and four non-respondents to further examine the classification issue. The focus group participants were provided with types of s that are used frequently as examples of search-, experience-, and credence-dominant s, along with the definitions of search, experience, and credence attributes. Overall, the respondents were in agreement with the literature that dry cleaning is dominated by search attributes, while restaurants are dominated by experience attributes. However, they did not agree that they could not judge a doctor s or dentist s performance. Most focus group participants felt that a doctor or dentist could be judged by the degree to JOURNAL OF SERVICES MARKETING, VOL. 15 NO

7 One selected for each category Product and brand names used in prior research were used which a patient s pain had been relieved. Some participants felt that they could judge a doctor s performance the moment they enter the office using surrogates such as cleanliness, the doctor s professionalism, or the way that support staff treat them. Overall, the focus group helped to clarify the inconsistency between consumers classification of s and the examples provided in the literature. In keeping with our research objectives, examples provided by focus group participants as being search-, experience-, or credence-dominant s were used. Three expert judges (two marketing faculty, one marketing doctoral candidate) selected one for each category from among the examples provided by the focus group participants. The judges were asked to select s that would have a high degree of familiarity among the student respondents. All three judges chose the same three s for inclusion in the study: (1) movie theaters (search dominant); (2) hair salons (experience dominant); and (3) pest control (credence dominant). Measures and subjects Based on previous empirical and conceptual studies a consumer perception approach was used to measure brand equity (Aaker, 1991; Agarwal and Rao, 1996; Keller, 1993; Lassar et al., 1995). Likewise, brand equity was measured both directly and indirectly via the use of ``strong and ``weak brand names (Keller, 1993; Lassar et al., 1995). The same expert judges were asked to choose a strong brand name and a weak brand name for each of the three s from a randomly generated list of local providers. Two judges chose different brand names for one of the s. These differences were resolved via discussions with the concerned judges. To examine differences in brand equity between goods and s, televisions (Sony and Goldstar) ± a product and brand names used in prior research ± was used (cf. Lassar et al., 1995). The final list of product categories and brand names is shown in Table II. Many researchers measure brand equity using complex techniques such as conjoint analysis, lengthy batteries of questions, or multi-attribute preference models (cf. Green and Srinivasan, 1990; Park and Srinivasan, 1994; Winters, 1991). However, Agarwal and Rao (1996) found that it may not be necessary Product category Service/good Strong and weak brand names Brand equity score a t-value Search-dominan t Movie theater Seigen Cinema * Bon Marche Experience-dominant Hair salon Lock Works * Super Cuts Credence-dominant Pest control Terminix * Ventress Pest Control Tangible good Television Sony * Goldstar a Total indirect brand equity measure. Since price premium is a relative measure of brand equity, it could not be included in this score * All t-values indicate significant differences at p < 0.01 Table II. Product categories and brand names 334 JOURNAL OF SERVICES MARKETING, VOL. 15 NO

8 Sample from a major southeastern university Seven-item brand equity scale to subject respondents to difficult questions in order to obtain accurate measures of brand equity. Instead, they argue for a simpler approach using single-item measures of brand equity. Based on their recommendations, several single-item measures were used to both directly and indirectly assess brand equity. A single price-premium question was used as a direct measure of brand equity. This measure asked respondents to indicate how much extra they would be willing to pay for the strong brand name good/ using a scale ranging from zero to five, where the scale points reflected increasing dollar amounts. The indirect measures of brand equity included six items that asked respondents to rate, on a seven-point scale, the quality (individual and relative), value, patronage motivation, trustworthiness, and familiarity of a strong and weak brand in each good and category. The brand equity measures are provided in the appendix. Similar measures and questionnaires were used for all products examined in the study. A sample of 184 upper-level undergraduate and graduate business students at a major southeastern university was enlisted to complete the questionnaire. Because there were four total products (goods/s) and eight total brand names that had to be evaluated, two different questionnaires were designed. Subjects were randomly assigned to one of the two questionnaire groups where they evaluated two products and four brand names[2]. Analysis Before the brand equity score was calculated for each good/ category, a manipulation check was performed to test for significant differences in the ratings of the strong and weak brand in each product category. The results of this analysis, shown in Table II, indicate that the ratings are different for each strong/weak brand name pair. Consequently, it was concluded that the respondents perceived the strong and weak brand names as intended. The overall brand equity score for each product category was calculated using a three-step process. First, difference scores for each of the six indirect measures of brand equity were calculated for each strong/weak brand name pair. Second, these scores were then combined with the price premium question to arrive at a final seven-item brand equity scale for each product category. The reliability estimates (coefficient alpha) for this scale were acceptable across the four product categories: (1) movie theaters (0.868); (2) hair salons (0.919); (3) pest control (0.868); and (4) televisions (0.881). The final brand equity score for each product category was calculated by summing all seven items (to create a difference score) and dividing by the rating for the weak brand in that category. This indexed measure reflects the percentage increase in brand equity ascribed to the strong brand relative to the weak brand. This procedure standardizes each respondent s rating relative to the lower level of brand equity ascribed to the weaker brand in each product category. The brand equity index for s as an entire category was calculated by averaging across all three types. Since each respondent evaluated two product categories using the same basic measures, a within-subjects repeated measures design was used to test for significant differences between the brand equity indices of movie theaters (search-dominant ), hair salons (experience-dominant ), pest JOURNAL OF SERVICES MARKETING, VOL. 15 NO

9 control (credence-dominant ), and televisions (tangible goods). These differences were also examined with respect to the effects of knowledge of the product category as a covariate in the design. Search-dominant s have the highest brand equity index Brand equity indices Results The results, shown in Table III, indicate that there are significant differences in brand equity indices among the product categories examined. However, these differences are not consistent with most propositions espoused in the literature. For example, the brand equity index for televisions (tangible goods) is significantly higher than the index for all s combined. Hence, our results indicate that brand equity may not be more important for s than for goods. Further, while our results do show that the importance of brand equity differs among search-, experience-, and credence-dominant s (Q2), these differences are not consistent with current assumptions in the literature. Our findings indicate that searchdominant s have the highest brand equity index, followed by credence-dominant s. The brand equity indices for experience- and credence-dominant s are not significantly different, indicating that brand equity is equally important for both types of s. Likewise, our results show that brand equity is equally important for search-dominant s and tangible goods, as their indices are not significantly different. The brand equity indices for all product types were also examined for differences after accounting for consumer knowledge about the product category as a covariate (Q5). Our results, shown in Table IV, indicate that knowledge of the product category has no effect on the relative differences in brand equity indices. It was earlier presumed, based on Keller s (1993) research, that consumer knowledge about a product category would play an important role in determining brand equity scores. While this may be true within a product category (as hypothesized by Keller), results indicate that consumer knowledge has no effect on relative brand equity scores across product categories. Discussion In total, our results indicate that tangible goods and search-dominant s are very similar in terms of brand equity indices and the importance of brand Product category b mean score Searchdominant (166.06) Experiencedominant (59.45) Credencedominant (80.15) All s (101.89) Experience-dominant (59.45) *** Credence-dominant (80.15) *** Tangible good (130.33) *** *** ** Notes: ** p < 0.05; *** p < 0.01 a Mean difference between brand equity index scores based on both direct and indirect brand equity measures. The index represents the percentage increase in brand equity of the strong brand relative to the weak brand in each product category. A Bonferroni adjustment is made for multiple comparisons b Search-dominant (movie theater), experience-dominan t (hair salon), credence-dominan t (pest control), tangible good (television) Table III. Differences in mean brand equity index scores a 336 JOURNAL OF SERVICES MARKETING, VOL. 15 NO

10 Product category b mean score Searchdominant (157.99) Experiencedominant (61.58) Credencedominant (80.15) All s (99.91) Experience-dominant (61.58) *** Credence-dominant (80.15) *** Tangible good (126.67) *** 46.52*** ** Notes: ** p < 0.05; *** p < 0.01 a Mean difference between brand equity index scores based on both direct and indirect brand equity measures. The index represents the percentage increase in brand equity of the strong brand relative to the weak brand in each product category. A Bonferroni adjustment is made for multiple comparisons b Search-dominant (movie theater), experience-dominant (hair salon), credence-dominan t (pest control), tangible good (television) Table IV. Differences in mean brand equity index scores a after accounting for knowledge of each product category Consumers do not understand the differences implied by the search Diversity among s and types equity. Both indices are higher than those for experience- and credencedominant s, while the brand equity index for tangible goods is higher than that of all s combined. Though these findings are inconsistent with assumptions found in the literature, they do make intuitive sense. By their nature, search-dominant s are somewhat similar to tangible goods in that both possess attributes that consumers can evaluate prior to purchase and consumption. The lack of a significant difference between experience- and credence-dominant s is also inconsistent with the literature. However, since both types of must be experienced before an evaluation can take place (regardless of how difficult this evaluation may be to the consumer), it seems reasonable that brand equity would be similar for both types. Based on the results of the pretest and our analysis, it appears that consumers do not perceive and understand the differences implied by the search, experience and credence attributes of s as suggested in the extant literature. This is particularly true with respect to the specific examples that have been used in the literature as they do not seem to match consumers categorization schemas. While the results are dependent on the types of s used in the study, it should be noted that the selection of these s was based on a pretest where the respondents reported their ability to evaluate these s before purchase and after use. Hence, this study attempted to match specific examples with the categorization schemas employed by the respondents. Limitations and future research The differences in brand equity indices of the types used in our study point to the often found diversity among s and types. Our study is limited in the fact that only three types of s and one type of tangible goods were examined. Thus, future research should attempt to examine brand equity across many different product categories and product examples. This type of examination is important if research is to move away from anecdotal evidence to a more empirically derived classification of s and types. The classification of s into search-, experience-, and credence-dominant categories is a good example of JOURNAL OF SERVICES MARKETING, VOL. 15 NO

11 Respondents did perceive the strong and weak brand names as intended Contentions in the literature not supported how presumptions made in the literature may not adequately match consumers classification schemas or evaluative processes. Our results are limited by the choice of brand names used in the study. It is possible that our results could change if different brand names were used for each product category. However, it should be noted that the respondents did perceive the strong and weak brand names as intended. Further, an attempt was made to control for brand name effects by indexing the brand equity differential score to the score for the weak brand. In effect, each brand equity index reflects the percentage change in brand equity associated with the strong brand relative to the weak brand. As a future extension to our study, researchers could examine the relative importance of search, experience, and credence attributes in the brand equity for tangible goods. While all tangible goods possess searchable attributes, many goods also possess attributes that consumers can evaluate only during use. Further, some goods may possess attributes that cannot be easily evaluated even after use. For example, automobiles possess many experience-based (e.g. comfort, gas mileage, handling, suspension) and credence-based attributes (e.g. anti-lock brakes, emission controls). Experience-based attributes are also important in tangible goods such as computers (e.g. speed, ease-of-use) and shoes (e.g. comfort, durability). In short, experience- and credence-based attributes could play a different role in the brand equity for tangible goods than they do in the brand equity for s. Many researchers do not approve of the use of student samples. While it is possible that use of student samples could have affected the results, it should be noted that students are viable consumers and useful for examining the concept of brand equity. The pretest was designed to frame the study in terms of examples with which students were fairly familiar. Future research could attempt to replicate and extend our research via the use of non-student samples. Conclusion Overall, the results of our study do not support the contentions in the literature that brand equity is more important for s than for goods. Further, our results do not support the presumption that brand equity is more important for credence-dominant s than either experience-dominant or searchdominant s. Knowledge of the product category does not affect brand equity differences across product categories. Our study highlights the importance of empirically examining long-held presumptions in the literature that are based on conceptual or anecdotal evidence. In addition, our study supports the contentions of Agarwal and Rao (1996) that brand equity can be measured using fewer items and simpler questions than in previous studies. This type of data collection is easier to conduct as respondents are not subjected to difficult questions that require a great deal of effort. Notes 1. George et al. (1984; 1985), did not find reasonable evidence to state that s are riskier to purchase than goods. Murray and Schlacter (1990), however, take issue with the experimental procedure used by George et al. 2. One group was exposed to questions relating to movie theaters (search-dominan t s) and hair salons (experience-dominan t s), while the second group was exposed to questions relating to pest control s (credence-dominate d s) and televisions (tangible goods). This procedur e was used to prevent respondent fatigue and random marking of answers that could be associated with responding to the same questions eight different times. 338 JOURNAL OF SERVICES MARKETING, VOL. 15 NO

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13 Nelson, P. (1974), ``Advertising as information, Journal of Political Economy, Vol. 81, July/ August, pp Nelson, P. (1978), ``Advertising as information once more, in Tuerck D.J. (Ed.), Issues in Advertising: The Economics of Persuasion, American Enterprise Institute, Washington, DC, pp Olson, J.C. (1977), ``Price as an informational cue: effects in product evaluation, in Woodside, A.G., Sheth, J.N. and Bennett, P.D. (Eds), Consumer and Industrial Buying Behavior, North Holland Publishing Company, New York, NY, pp Olson, J.C. and Jacoby, J. (1972), ``Cue utilization in the quality perception process, in Proceedings of the Third Annual Conference of the Association for Consumer Research, in Venkatesan, M. (Ed.), Association for Consumer Research, Iowa City, IA, pp Onkvisit, S. and Shaw, J.J. (1989), ``Service marketing: image, branding, and competition, Business Horizons, Vol. 32, January-February, pp Park, C.S. and Srinivasan, V. (1994), ``A survey-based method for measuring and understanding brand equity and its extendibility, Journal of Marketing Research, Vol. 31, May, pp Van Osselaer, S.M.J. and Alba, J.W. (2000), ``Consumer learning and brand equity, Journal of Consumer Research, Vol. 27, June, pp Winters, L.C. (1991), ``Brand-equit y measures: some recent advances, Marketing Research, Vol. 3, December, pp Yoo, B., Donthu, N., and Lee, S. (2000), ``An examination of selected marketing mix elements and brand equity, Journal of the Academy of Marketing Science, Vol. 28, Spring, pp Zeithaml, V.A. (1988), ``Consumer perception s of price, quality, and value: a means-end model and synthesis of evidence, Journal of Marketing, Vol. 52, July, pp Zeithaml, V.A., Parasuraman, A. and Berry, L.L. (1985), ``Problems and strategies in s marketing, Journal of Marketing, Vol. 49, Spring, pp Appendix. Brand equity measures These examples are taken from the questionnaire for movie theaters. All other products and brands were assessed using similar or identical measures. Price premium measure Assume that a movie at (weak brand) costs $3.50. How much extra would you be willing to pay for the same movie at (strong brand)? (1) Up to 50 cents more (2) Up to $1.00 more (3) Up to $1.50 more (4) Up to $2.00 more (5) More than $2.00 Indirect brand equity measures (1) Evaluate the quality of the two movie theaters using the following scale: Inferior quality High quality Strong brand Weak brand (2) Evaluate the quality of the two theaters overall when compared to all other theaters in the city. Use the following scale: One of the worst One of the best Strong brand Weak brand Please tell us how much you agree or disagree with the following statements about the two theaters. Evaluate each theater separately using the following scale: Strongly disagree Strongly agree 340 JOURNAL OF SERVICES MARKETING, VOL. 15 NO

14 (3) This theater provides good value for the money. Strong brand Weak brand (4) There are good reasons to go to this theater rather than other theaters. Strong brand Weak brand (5) When it comes to theaters, this is the one I can trust. Strong brand Weak brand (6) When it comes to theaters, this is the theater I am most familiar with. Strong brand Weak brand & JOURNAL OF SERVICES MARKETING, VOL. 15 NO

15 This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present Executive summary and implications for managers and executives The concept of brand equity A brand is a name, term, sign, symbol, design ± or combination of them ± which helps consumers to identify the goods and s of one seller or group of sellers, and to differentiate them from those of competitors. The consumer uses the brand as a cue to infer certain product attributes, like quality. The brand is therefore an important tool for marketers. Brand equity is the added value given by the brand to the product. Brand equity is usually seen as more important for s than for goods. Because s are intangible, consumers have more difficulty evaluating their quality. Branding a can aid consumers by helping to assure them of a uniform level of quality. Search, experience and credence attributes All products, whether goods or s, possess search, experience and credence attributes. Search attributes, such as brand name and price, include product characteristics that consumers can determine and evaluate before buying. Experience attributes, such as fun, emotion or entertainment value, can be discerned and evaluated only after purchase or during consumption. Credence attributes include any product characteristi cs that consumers cannot determine or evaluate even after purchase or consumption. While most goods are high on search and experience attributes, most s are high on experience and credence attributes. Consequently, consumers are able to determine and evaluate most characteristics only during or after consumption, if they can be discerned at all. Very few s are dominated by search attributes, although dry cleaning is one. Vacations, theme parks and hotels are examples of experience-dominant s. Credence-dominant s include car repair, medical procedures and legal representation. The traditional view of the importance of brand equity Brand equity is generally thought to be more important for s that are dominated by experience and credence attributes. The presence of search attributes helps to make the more tangible and so makes purchase less risky for the consumer. The relative lack of search attributes in most s makes the task of purchasing them more complex and riskier than for goods. Moreover, the price of most goods is established before they are bought, but the cost of s such as legal representation often cannot be confirmed until after they have been provided. Some surprising results from research Research by Krishnan and Hartline reveals some surprising results. Brand equity may not be more important for s than goods. Tangible goods and search-dominant s are similar in terms of brand equity indices and the importance of brand equity. Both indices are higher than those for experience-dominant and credence-dominant s, while the brand equity index for tangible goods is higher than that of all s combined. The results can, however, be explained. Both search-dominant s and tangible goods can be evaluated by consumers before being bought. Similarly, since both experience-dominant and credence-dominant s must be experienced before an evaluation can take place, regardless of how difficult this evaluation may be to the consumer, it seems reasonable that brand equity should be similar for both these types. (A preâcis of the article ``Brand equity: is it more important in s?. Supplied by Marketing Consultants for MCB University Press.) 342 JOURNAL OF SERVICES MARKETING, VOL. 15 NO