An exploratory study into the luxury services SME sector : the impact of brand equity on performance during and economic uncertainty

Abstract

Branding has evolved over recent decades from being just a name to differentiate products and services to taking on new roles such as a relationship builder and a strategic asset used in planning and budgets (Aaker, 1991, 1996, 2002, Berry, 2000, De Chernatony & McDonald, 2003, Duffy, 2003, Keller, 2000, Keller et al, 2002) Brand equity is so imperative that it has now become a financial asset of a company, often reflected in an annual balance sheet (Aaker, 2002, De Chernatony & Me Donald, 2003, Faullant, Matzler & Fuller, 2008) The following research is an exploratory study into service brand equity in luxury service SME’s to determine the impact the level of brand equity has on their performance during an economic downturn Both SME’s and luxury services are of topical debate at the moment as they are both vulnerable in this current economic downturn Despite this, both are under researched in the literature Therefore, this research aims to examine the importance of brand equity to these sectors and determine ways in which they can build it A mixed methodology approach was used for the research in order to gam a thorough insight into these complex issues For the quantitative research 177 questionnaires were completed by consumers in health spas and local shopping centers The study was carried out in the North West of Ireland For the qualitative research, two local spa managers were interviewed, one with a strong brand equity and one without, to determine the differential effect their brand equity had on their performance The research concluded that a luxury service SME can leverage brand equity to survive or even thrive in economic uncertainty The service experience, internal branding and brand image were the most important contributors However, constant investment in a brand and the people it influences is essential in order to build consumer loyalty.