The impact of service recovery on Consumer-Based Brand Equity (CBBE)

The current thesis contributes to service marketing and branding literature by investigating the impact of service recovery (customer participation in service recovery and firm recovery) on Consumer-Based Brand Equity (CBBE) and perceived justice. This thesis examines the mediating role of perceived justice between service recovery and CBBE. It further identifies the moderating role of service failure severity on the relationships between service recovery, perceived justice and CBBE. Finally, this thesis investigates the occurrence of the service recovery paradox with respect to the dimensions of CBBE. The theoretical development involves a systematic literature review of service recovery literature which set the parameters to review the branding literature. A total of five research questions are developed to fulfil the research gaps which are identified from the literature review. For the empirical investigation, this research uses an exploratory sequential mixed-method research design to answer the research questions (RQs). The first empirical phase is carried out through a qualitative study. There are 24 Semi-structured interviews conducted for qualitative data collection. The second phase is quantitative and includes a 3 (customer participation in service recovery vs firm recovery vs no recovery) X 2 (low service failure severity vs high service failure severity) factorial scenario-based experiment undertaken by 322 participants. RQ1 is answered in the qualitative phase, whereas RQ2, RQ3, RQ4 and RQ5 are answered in the quantitative phase. The findings of the qualitative phase suggest that perceived quality, perceived value, brand reputation, brand trust, and brand loyalty are the dimensions of CBBE, which have the tendency to decline after a service failure but may increase after a successful service recovery (RQ1). The positive impact of service recovery on these dimensions of CBBE, perceived justice and overall brand equity is confirmed in the quantitative phase (RQ2). The quantitative findings suggest that perceived justice is a critical mediator between service recovery and CBBE (RQ3). Further, it is concluded that service failure severity is a significant moderator among the relationships except in the case of service recovery and brand reputation (RQ4). Finally, the findings suggest that brand loyalty is the only dimension of CBBE which may produce a service recovery paradox (RQ5)