Elsevier

Industrial Marketing Management

Volume 52, January 2016, Pages 163-174
Industrial Marketing Management

Franchisee-based brand equity: The role of brand relationship quality and brand citizenship behavior

https://doi.org/10.1016/j.indmarman.2015.07.008Get rights and content

Highlights

  • We develop and empirically test a new model of franchisee-based brand equity (FBBE).

  • Brand relationship quality enhances FBBE via brand citizenship behavior.

  • Results show that the factors affecting FBBE vary with franchisor competence but not with relationship duration.

  • This is the first study to empirically test the concept of brand relationship management in B2B markets.

Abstract

Despite the evidence that brand management is core to the success of franchising businesses, limited empirical work has focused on branding in such business-to-business (B2B) exchanges. Integrating social exchange theory and the identity-based brand management framework, this study proposes that brand relationship quality is crucial in promoting franchisee brand citizenship behavior that can enhance brand equity attributable to franchisees, thereby advancing a model of ‘franchisee-based brand equity’ (FBBE). Survey results from 352 franchisees in franchised B2B exchanges suggest that brand relationship quality promotes brand citizenship behavior, thereby enhancing FBBE. Additionally, moderated mediation analysis indicates that the indirect effect of brand relationship quality on FBBE via brand citizenship behavior is stronger when franchisor competence is high. However, franchisor–franchisee relationship duration has no moderating effects on these relationships. The findings of this study have implications for franchising practitioners that are interested in understanding the role of brand relationship management in promoting franchisee brand citizenship behavior and FBBE.

Introduction

Franchising is increasingly becoming an important model for business growth across the globe. In this business arrangement the franchisor sells contractual rights to franchisees to distribute goods or services using the franchise brand name and business practices (Combs, Michael, & Castrogiovanni, 2004). Thus, much of the success of franchise business models is attributed to branding, as firms with high brand equity are able to attain a sustainable point of differentiation and gain more financial leverage than those without (Aaker, 1991). However, despite the importance attributed to the franchise brand, limited empirical research has focused on franchise branding (Zachary, McKenny, Short, et al., 2011) and business-to-business (B2B) branding in general (Leek & Christodoulides, 2012).

Literature indicates that channel members tend to gain competitive advantage through the co-creation of brand equity (Gordon, Calantone, & di Benedetto, 1993). Thus, both franchisors and franchisees share the incentive to promote and sustain franchise brand equity (Pitt, Napoli, & van der Merwe, 2003). Prior research confirms that successful franchise brand management is a reflection of the value addition of both B2B (franchisor–franchisee) and business-to-consumer (B2C) (franchisee–customer) relationships that nurture a shared objective, that is, building the franchise brand (Doherty & Alexander, 2006). While franchisees are expected to contribute to the development of the franchise brand, they may, in the absence of negative impacts on their short-term profits, have little incentive to safeguard brand equity (Dant & Nasr, 1998). Therefore, when compared to other traditional B2B models, brand management within franchise systems poses unique challenges and opportunities. For instance, even though the responsibility of developing and managing the franchise brand rests with all parties, neither franchisors nor franchisees have total control of the brand management process (Pitt et al., 2003). This situation presents unique challenges that require internal franchise branding activities to be well-coordinated and integrated between both parties. However, despite the above-recognized importance of B2B branding and internal branding in enhancing the franchise brand (Doherty and Alexander, 2006, Zachary et al., 2011), limited empirical work has focused on franchise brand management.

Internal branding literature suggests that a strong brand personality is important in brand building (Aaker, 1997). Thus, to be effective brand ambassadors or representatives it is essential for franchisees to align their behavior and identify with the franchise brand. Since the notion that franchisees can form relationships with their franchise brand is central to this study, there is therefore a need to assess the strength and effects of such a relationship on brand equity. This inference is based on the assumption that brands are imbued with human-like features that can lead to the development of self-brand relationships that are similar to the way individuals form personal relationships (Aaker, 1997, Aggarwal, 2004, Fournier, 1998). However, while the concept of brand relationships has been explored in B2C markets, there is limited research investigating brand relationships in franchised B2B exchanges.

Brand equity is defined as the differential effect of brand knowledge on consumer response to the brand (Keller, 2003). Some B2B scholars have conceptualized brand equity as identity-based brand equity (Burmann, Jost-Benz, & Riley, 2009), retailer-perceived brand equity (Baldauf, Cravens, Diamantopoulos, & Zeugner-Roth, 2009), retailer-based brand equity (Samu, Lyndem, & Litz, 2012), customer-based retailer equity (Pappu & Quester, 2006) and B2B brand equity (Kuhn, Alpert, & Pope, 2008). In particular, the concept of brand equity from the retailer's perspective encapsulates three conceptual ideals, namely; (i) the equity associated with the retailer brand, (ii) the equity associated with the retailer's store brand, and (iii) the retailers' perceptions of the brand they sell (Baldauf et al., 2009, p.2). The current study builds on this research stream by proposing an alternative way of conceptualizing brand equity in franchising. Thus, to capture franchisees' perceptions of the franchise brand with which they are associated with we advance the term franchisee-based brand equity (FBBE). Even though various brand equity models exist, extant literature continues to call for the development of additional models that are grounded in empirical research on brand equity in various contexts (Broyles, Schumann, & Leingpibul, 2009). Therefore, drawing on social identity and identity-based brand management theories, our study investigates the potential antecedents of FBBE, and in so doing addresses the following question:

What role does brand relationship quality and brand citizenship behavior play in building FBBE in franchisor–franchisee relationships?

The remainder of the paper is structured as follows: First, insights from social exchange theory and the identity-based brand management view are integrated to provide a theoretical framework for the study. Then literature on FBBE, brand relationship management (BRM), brand relationship quality (BRQ), brand citizenship behavior (BCB), franchisor competence, and franchisor–franchisee relationship duration is reviewed. The research methodology, data analyses, and empirical findings are then presented. We conclude by discussing theoretical and managerial implications, limitations, and future research directions.

Section snippets

Theoretical framework, literature review and hypotheses

As Fig. 1 illustrates, our conceptual framework predicts that (i) the manner by which franchisors manage the franchise brand can affect BRQ, (ii) in turn, BRQ influences franchisees' BCB, (iii) BCB is posited to mediate the link between BRQ and FBBE, and (iv) the link between BCB and FBBE can be moderated by franchisor competence and franchisor–franchisee relationship duration. The solid lines specify the effects examined in this study, while the dotted line represents effects that have been

Sampling procedures

Survey data were collected from franchise owners (that is, franchisees) in Australia. The sampling frame was built from syndicated databases, franchise websites, and franchise magazines. To ensure generalizability, the sampling frame included 2200 franchisees from various industries consisting of 123 different franchise brands. Stratified random sampling based on industry category and geographic location was then used to draw the sample to ensure that the identified groups were proportionally

Data analysis and results

We tested the research hypotheses specified in Fig. 1 in two interlinked steps. First, we examined the direct relationships (H1, and H2a–c) and simple mediation effects (H3a–c). We then incorporated the proposed moderators into the conceptual model to test the moderated mediation hypotheses (H4 and H5).

Discussion

As business markets continue to experience the intense pressures of globalization, commoditization, and growing consumer power, B2B firms are increasingly seeking to enhance their competitiveness through brand management (Keränen et al., 2012). Yet, extant literature on B2B branding remains fragmented indicating the need for more empirical work in the area (Keränen et al., 2012, Kuhn et al., 2008). In particular, limited empirical research addresses the role of B2B branding in franchising.

Acknowledgments

The authors would like to acknowledge the financial support provided by the Monash University Institute of Graduate Research (MIGR) and the Faculty of Business and Economics at Monash University. We are also extremely grateful to the Editor and the three anonymous reviewers for their constructive comments and suggestions.

Munyaradzi W. Nyadzayo, Ph.D.: is currently a Lecturer in Marketing at Swinburne University of Technology. His primary research interests include B2B branding, B2B brand relationships, services marketing, digital marketing, and retailing particularly in franchising markets. Munyar's work has been published in Industrial Marketing Management and Journal of Business Research, among others. He obtained his Ph.D. from the Department of Marketing at Monash University, Melbourne in 2012.

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  • Cited by (0)

    Munyaradzi W. Nyadzayo, Ph.D.: is currently a Lecturer in Marketing at Swinburne University of Technology. His primary research interests include B2B branding, B2B brand relationships, services marketing, digital marketing, and retailing particularly in franchising markets. Munyar's work has been published in Industrial Marketing Management and Journal of Business Research, among others. He obtained his Ph.D. from the Department of Marketing at Monash University, Melbourne in 2012.

    Margaret J. Matanda, Ph.D.: is a Senior Lecturer in the Department of Marketing, Monash University. Her research interests include marketing strategy, B2B branding, B2B relationships, supply chain management, and health marketing. Margaret's work has been published in Industrial Marketing Management, Journal of Small Business Management, Journal of Marketing Management, International Business Review, and the International Journal of Entrepreneurship and Innovation Management, among others.

    Michael T. Ewing, D.Com: is a Pro-Vice Chancellor (Executive Dean) of Business and Law at Deakin University. Mike's research interests include marketing communications, brand management, health promotion, and marketing strategy. His work has been published in Industrial Marketing Management, Journal of the Academy of Marketing Science, Journal of Advertising Research, Journal of Advertising, Journal of Business Research, Psychology & Marketing, and the European Journal of Marketing, among others.

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