Experimental Design

This study set out to determine how the attributions customers make about a firm’s control over failures influences the effects of brand equity on customers’ responses, when they are confronted with service failures. To increase generalizability, this study conducted research in two service industries: hair salons and restaurants. Hair salons and restaurants were ideal for the study because both are commonly used by and familiar to a wide range of consumers, which should provide a diverse group of respondents who could meaningfully complete the survey. In addition, both service industries maintain a strong presence in high-equity brand contexts

Testing the model in these two services therefore should have implications for existing theories and for managers of high-equity brands.

3.2.1 Experiment Procedure

This study constructed scenarios to manipulate the brand equity and firm’s controllability over service failure across the two service industries with a completely randomized full factorial design. The participants were randomly assigned to one of the four cells in a 2 × 2 (firm’s controllability over the failure: low or high × brand equity: high versus low) between-subject experiment. The experimental design for this study is summarized in Table 1.

Table 1 Experimental design

Firm’s Controllability Over the Failure

Brand Equity Low High

Low High

Low: partial blame to other customers or who to blame is unknown;

High: the firm is perceived to have had the ability to prevent the failure but did not.

Written scenarios were used to create the four experimental conditions in the two service industries. A scenario methodology was chosen for the study, in which subjects were asked to imagine themselves in the scenarios presented. Scenario methodology has been used in previous studies of customer reaction to service failure. There is strong evidence that individuals respond to an experimental scenario in the same manner as they would respond to a similar, actual experience (Maxham & III, 2001).

Initially, respondents learned that they would participate in one study about the service experiences. In the scenarios, participants were asked to recall an actual hair salon (restaurant) where they received service before. In both service industries, participants were randomly assigned to two brand equity conditions, to complete the brand equity scales and the customer satisfaction scales depending on the quality of past experiences.

Respondents first read a short description of a firm. In the case of the hair salons, respondents were told to imagine that they had already made an appointment to get their hair cut. However, when they arrived on time, the respondents find out that they have to wait for 35 minutes to get served.

In the restaurant scenario, respondents were asked to imagine that they had already made an appointment for dinner. Then the respondents subsequently learn that they have to wait for 35 minutes to become seated. Next, both groups of respondents read scenarios describing one of two controllability manipulations. Last, respondents were asked to complete the customers’

satisfaction scales again after service failure in order to examine the intensity of their negative emotions, and the degree of satisfaction reductions was analyzed. In addition, patronage reduction was used to exam the customers’ response after service.

3.2.2 Stimulus Development

Manipulation of brand equity

To manipulate brand equity, the study selected some pictures for different brand equities.

There were three exclusive and luxurious hair salon pictures for a high-equity brand manipulation and three pictures of university-affiliated haircut service for a low-equity brand (Appendix A). In addition, this study provided a description about the service and the quality of the hair salon corresponding to the pictures in order to induce customers to recall one hair salon that he/she has been to (Appendix A). In this study, we used perceived quality, which is one dimension of brand equity to do the manipulation check since it is the most obvious and external concept to evaluate brand equity. Therefore, consistent with well-established measures of brand equity (e.g., Aaker and Keller 1990; Smith and Park 1992), we considered previous research and measure brand equity based on perceived quality, where perceived

quality reflects a global brand evaluation (DelVecchio, Jarvis, Klink, & Dineen, 2007). For the purpose of a manipulation check, participants were asked to report the name of the hair salon he chooses and to complete the brand equity scale adapted from Yoo & Donthu (2001).

Examples included, “The likely quality of this hair salon is extremely high.” and “This hair salon’s quality appears to be reliable.” (1 = “strongly disagree,” 7 = “strongly agree”). Results supported the high- and low-equity brands’ intuitive designations. In addition, the pictures and description that represents high equity was rated significantly higher on the brand-equity scale than the low-equity hair salon brand. The results of the manipulation will be reported in Chapter 4.

Manipulation of a firm’s controllability over failure

A service failure scenario was designed to stimulate participaants into an unsatisfactory service experience due to an unnecessarily long wait. The respondents were randomly assigned to two scenarios about the firm’s controllability over failure.

To manipulate the controllability variable, we depicted in two scenarios. Both scenarios were that customers had to wait 35 minutes for their hair cuts even if they had already made an appointment three days previously (occurrence of service failure). However, in a firm’s high controllability over failure situation, the reason for making the customers wait was that the salon forgot to make the appointment. In a low controllability scenario, failure happened because the last customer was so critical that he/she kept complaining about the hairstyle. The

firm’s controllability over failure depends on how the participants attribute the service failure.

This study used the scale of attributions about the firm’s controllability developed by Maxham and Netemeyer (2002). (e.g. “The service failure was entirely the organization’s fault.”, on a scale from 1 = strongly disagree, to 7 = strongly agree)

3.3 Measurements