HOSPITAL BRAND EQUITY 2
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Master thesis proposal
Hospital Brand Equity: the role of doctor reputation
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CHAPTER I
INTRODUCTION
1.1 Research questions
The primary aspect of concern for this study is;
Ø What is the role of doctor reputation in Hospital Brand Equity?
This is the main subject of concern which this research is out to solve. However, it naturally leads to the cropping up of a host of other subsidiary questions which are more or less prerequisites to the primary research question;
Ø Does doctor reputation influence Trust positively?
Ø Does doctor reputation influence Customer Satisfaction positively?
Ø Does Customer Satisfaction influence Trust positively?
Ø Does trust influence Relationship Commitment positively?
Ø Does relationship Commitment influence Brand Loyalty positively?
Ø Does trust influence Brand Awareness positively?
Ø Does customer Satisfaction influence Brand Awareness positively?
Ø Does brand Loyalty influence Brand Equity positively?
Ø Does brand Awareness influence Brand Equity positively?
1.2 Background to the study
This research is integrating two separate frameworks. The management framework based on Torres et al (2009) postulations and the marketing framework based on Kim et al (2008) postulations. The hospital is regarded as a managerial platform and then again as a marketing entity. These two conceptual frameworks are overlapping. One leads to or depends on the other. On one hand the hospital is regarded as a platform where management comes into play in order to coordinate the efforts of the staff members and hospital assets so as to realise all the set objectives explicitly. On the other hand, the hospital is regarded as a marketing entity where there are limited patients who are willing and able to seek services from it and thus the hospital needs to direct its efforts towards luring the patients to seek its services specifically and to remain loyal.
Hospitals have over the years been primarily centers for the provision of health care. They have grown by and by and have covered almost every locality in most urban centers. This springing up of hospitals has led to a new turn of events in the health care industry. Hospitals are engaging each other in cut throat competition in an effort to survive in the ever dwindling market. They have turned to employing marketing skills in conjunction with their professionalism in health care so as to win the hearts of the ‘limited’ patients. This has led to hospitals seeking affiliations with highly reputable doctors so as to build on their brand equity; which begs the question, “What is the role of doctor reputation in Hospital Brand Equity?”
The fact that there is a dilemma in the role which the reputation of doctors play in building Hospital Brand Equity is the key motivation to this study. Among many services provided, going to hospital puts customers in one the most difficult positions to choose from. This is more so considering its risk is related to customer’s health. Which means brand equity plays an important role for hospitals, however, in many countries it is legally not allowed to increase hospital brand equity through advertising (Kirmani and Zeithaml, 1993). Under this rule, hospitals are considering leaning on doctor reputation as a counter attack mechanism. Does doctors’ reputation really have a positive impact in Hospital Brand Equity?
In the modern world, the pace of life becomes faster and faster, time seems to be a scarcity even more. People confront the situation of making different choices almost every minute, what to eat, what to wear, where to go, whom to meet, which to buy, among others. Need is the reason. Thanks to the information we receive voluntarily or passively, we form a certain kind of value system that helps us make all these decisions. Most of the decisions that we make are involving other parties, a shop for a product, a person for a communication, a hospital for a treatment etc. People always want to make the right decisions to save time and enjoy the fulfilment of need, but how? Experience tells us to make the right choice for many circumstances, but what about the things we haven’t experienced. A new product, a new service, there are so many new things waiting for us to try out, but how do we choose quickly and correctly? Brand is a fast way to help us match a product or a service to our needs, it is the gate to understand the things we haven’t experienced, and it is the name which helps us to distinguish good or bad in those things we have experienced. Customer is god, said by Lance Arrington (1991), companies and firms should focus on customer need to form competitive advantages. Customers learn a company first through its brand (Keller, 1993), the effectiveness of brand communication is important; brand equity is a key to competitive advantage, business survival and success. Brand equity became more and more popular among marketers and researchers (Cobb-Walgren et al., 1995).
Brand equity has been studied by many scholars in the last decades. Branding is important especially for service firms, service is intangible product, customer perceives monetary, social, and safety risks in buying services, because it is not easy to evaluate service before purchase, Berry (2000) tests strong brands increase trust in intangible product, branding help customers better understand and visualize services.
Brand equity and customer relationship have been studied in many fields, however in hospital market it still remains rather new, Kim, Kim, Kim, Kim, & Kang, (2008) investigates structural relationships among brand equity and its factors, (Torres, Vasquez-Parraga, & Barra 2009) points out the relationship among patient loyalty, satisfaction, trust, relationship commitment and doctor reputation. Yet neither academically nor practically, has the relationship between doctor reputation and hospital brand equity been revealed. Thus, the purpose of this research is to shade light on these controversial issues once and for all.
1.3 Objectives
1.3.1 Broad objective
Ø To find out the role of doctor reputation in Hospital Brand Equity
This is the main objective of this study. It is broad and naturally answers or requires the answering of other minor objectives. As stipulated by The Marketing Accountability Standards Board (MASB), Hospital Brand Equity functions to distinguish one hospital’s service as unique from those of others. This study majorly aims at finding out the roe that the reputation of a doctor plays in making the services of a particular hospital unique from those of the others.
1.3.2 Specific Objectives:
According to Philip, Wong , Armstrong and Saunders (2008) a service provider’s reputation carries with it the knowledge of the needs and wants of the consumers targeted and hence causes the delivery of the desired satisfactions. This implies that the reputation of a doctor plays a role in satisfying the clients. If and when one gets satisfied with something, he tends to build trust in it. Bearing this in mind, this research aims at;
Ø To find out whether doctor reputation influence Trust positively.
Ø To find out whether doctor reputation influence Customer Satisfaction positively.
Ø To find out whether Customer Satisfaction influence Trust positively.
Philip, Wong, Armstrong and Saunders (2010) stipulate that companies build strong Relationship Commitment so as to create value for their clients as well as for their selves. This suggests that it increases brand loyalty. The fact that it creates value for their clients suggests that the clients build trust in it and hence this research aims at;
Ø To find out whether trust influence Relationship Commitment positively.
Ø To find out whether Relationship Commitment influence Brand Loyalty positively.
There are very many brands that are coming up every very often. With the hastily rising force of globalization, the difference between marketing within a hospital's local country and marketing in outside markets is fading very rapidly. Bearing this in mind, hospitals should move with speed to reorganise their marketing tactics to meet the test of the overall marketplace on top of maintaining their competitive edge within local markets (Joshi and Mohan, 2005) . Hospitals are thus embracing the aspects of building trust and customer satisfaction so as to enhance brand awareness and loyalty. Therefore this research aims at;
Ø To find out whether trust influence Brand Awareness positively.
Ø To find out whether customer Satisfaction influence Brand Awareness positively.
Ø To find out whether brand Loyalty influence Brand Equity positively.
Ø To find out whether brand Awareness influence Brand Equity positively.
CHAPTER II
2. Literature review
2.1 Overview
The relationship between doctor and patient is of prime significance in the general health service. It is an exclusive connection which relies on trust as well as confidence linking the parties involved for the delivery of excellent health care. Efficient communication between the doctor and patient is a vital clinical utility in constructing a curative doctor-patient association, which is the engine and fuel of medicine. Much dissatisfaction from patients and numerous complaints are as a result of the collapse in the relationship between doctor and patient (Ha, Anat, & Longnecker, 2010). Torres et al., (2009) investigated the bond between patient commitment, patient loyalty, patient trust and patient satisfaction as directed to doctors.
2.2 Doctor reputation
A hospital is a professional service provider; doctors are the main assets of hospitals. Torres et al., (2009) researches on the relationship among doctor reputation, patient satisfaction, trust, commitment and loyalty, showed that patient satisfaction and trust are affected by doctor reputation. A good doctor reputation increases patient satisfaction and trust in a doctor. This leads to the formulation of this research’s prime hypothesis that;
Ø The doctor reputation plays a major role in enhancing Hospital Brand Equity.
When a hospital is affiliated with a highly reputed doctor, say for instance Benny Carson, the brand name of that hospital is enhanced, just like John Hopkins Hospital in this case.
A person’s reputation represents third-party experiences with a relationship partner (Einwiller, 2003), or secondhand rumors that produce one’s general beliefs about the subject of the rumors (McKnight & Chervany, 2001). Reputation is most often analyzed in individual level. It is a mechanism for evaluating risk of interaction; Dalton and Croft (2003) suggest such risk evaluating is important for any social exchange. Accordingly, this issue can be transferred into doctor reputation easily; and doctor reputation can be treated as a mechanism for patients to evaluate risk of interacting with the hospital. That is to say, doctor reputation gives ability to anticipate future outcome of the service. Positive doctor reputation signals of high level of trustworthiness and low level of risk, and therefore can play a role of catalyst in making a decision to revisit and recommend to others. In business literature reputation is linked to both customer satisfaction and trust. It can positively and directly influence satisfaction (Andreassen, 1994) A person’s reputation affects others’ trust in that person (Casalo, Flavi_an, & Guinalı´u, 2007). Doctor’s reputation has a role in how patients gain trust in their hospitals. Patient satisfaction and trust are affected by doctor reputation. A good doctor reputation increases patient satisfaction and trust in a doctor (Torres et al., 2009). Thus leading to the formulation of hypotheses regarding doctors’ reputation and customer satisfaction considering the research question that;
Ø Doctor reputation influence Customer Satisfaction positively.
A highly reputed doctor is more likely to instil the notion of total satisfaction on the patients he treats as compared to the lowly regarded doctors.
The reputation of a doctor plays a major part in how patients grow trust in their providers of medical service. Mechanic & Meyer (2000) established that relationships in the medical field are usually initiated on the foundation of recommendations of friends and family, consequently trust primarily may be founded on reputation. Satisfaction of the patient along with trust is influenced by the reputation of the doctor (Torres et al., 2009). The reputation a person’s in business is related to trust and customer satisfaction. The latter can also be affected by the corporate image (Bloemer & de Ruyter, 1998; LeBlanc & Nguyen, 1996). The reputation of a person’s influences the trust of others’ towards that person (Casalo, Flavian, & Guinaliu, 2007), predominantly in relationships that are long-term which incorporate historical events that represent reliability (Anderson & Weitz, 1989). It is also possible to establish trust at the start of a relationship (Einwiller, 2003). These lead to the formulation of this research’s hypothesis regarding doctors’ reputation and trust in the research questions that;
Ø Doctor reputation influence Trust positively.
When a patient is poised to receives treatment from a highly reputable doctor, he or she is more likely to develop confidence and trust in the treatment that he is about to receive.
2.3 Factors related to doctor reputation and brand equity
Kim et al., (2008) discussed from a customer relationship management perspective about brand equity in hospital marketing, the results have shown trust, customer satisfaction, relationship commitment all have positive influence on brand loyalty and brand awareness, and brand awareness has strong positive influence on hospital brand equity. In addition, patient satisfaction and trust are affected by doctor reputation. A good doctor reputation increases patient satisfaction and trust in a doctor. Torres et al., (2009) researched on the process of patient loyalty formation, the factors doctor reputation, trust, customer satisfaction and relationship commitment and the result has revealed a sequential process from trust to satisfaction to relationship commitment and finally to building loyalty. These lead to the construction of a model that explain the relationships among doctor reputation, brand equity and the influencing factors for building successful brand equity: trust, satisfaction, relationship commitment, brand loyalty, and brand awareness:
Based on researches, the factors related to doctor reputation and brand equity are as follows:
(1) Trust.
(2) Customer satisfaction.
(3) Relationship commitment.
(4) Brand loyalty.
(5) Brand awareness.
Each factor is discussed in turn below.
2.3.1. Trust
Trust is defined as the perceived credibility and benevolence of a target party (Doney and Cannon, 1997). Customer trust relies on interactions involving reliability, durability, and integrity between at least two parties who mutually believe that one’s actions are devoted to the interest and benefit of the other party in the relationship (Peppers & Rogers, 2004). Accordingly, the first dimension focuses on the objective believability of an exchange partner, as in an expectancy that one can rely on the partner's word or written statement. The second dimension is the extent to which one partner is genuinely interested in the other's welfare and motivation to seek joint gains. In the health care context, if trust is formed, patient would rely on doctor’s word and doctor is truly interested in patient’s welfare to benefit mutually. Considering this, an hypothesis related to the research question that links trust and relational commitment can be drawn that;