RESPONSIBLE ENTREPRENEURSHIP VISION DEVELOPMENT AND ETHICS

Service quality and brand personality in hotel and hospitality the case of Romanian hotels 173
Brand loyalty
Brand loyalty holds great importance for market researchers, marketing managers and marketing
academics. A loyal customer is one who repurchases a service or product from a particular
provider. It represents a great issue and companies spend millions of dollars each year
in order to track brand loyalty levels through marketing research organizations. Customers’
loyalty plays a crucial role in a company’s growth and in its performance and it is linked with
repeat business. Customer loyalty is linked to the company’s survival and to its future growth.
Once a customer is satisfied with a company, it is very likely that he/she will remain with
that company and this will lead to future revenues for the company. Business theory tells us
that customer retention leads to profitability. More, it is well known that the cost of acquiring
new customers is higher than the cost of retaining existing customers. Therefore, the aim
of a service company is to satisfy its customers with the purpose of stimulating customer retention
and repeated purchases. Positive attitudes about a brand generate a certain commitment,
which is required in order to establish long-term business relationships.
In the academic literature, loyalty is also referred to as commitment and retention. Some
even say that brand loyalty is a measure of the health of the company. “The advantages that
brand loyalty offers are allowing marketers to charge a premium price, reducing the cost of
doing business through decreasing acquisition and promotion costs, in this attempt increasing
shareholder value and hence profitability” (Bennett & Rundle-Thiele, 2001).
Many researchers have tried to identify the relationship between service quality and brand
loyalty or customer loyalty. Several studies have analyzed this connection and some of them
did identify a relationship, whereas some others have not. In a study by Cronin & Taylor (1992),
“service quality did not appear to have a significant and positive effect on repurchase intention,
having in mind that customer satisfaction positively impacts repurchase intention”. On
the other hand, Lenka et al. (2009) found that service quality does impact positively customer
loyalty in a study of Indian commercial banks.
Brand value (Brand equity)
Brand equity and customer equity constitute the value provided by brand and customer
portfolios to companies or to the firm’s offering. They are metrics of marketing performance
in the long term, as well as key factors in firm valuation processes. In an exploratory study,
“Relating brand equity and customer equity”, Romero and Yague (2015) analyze the interaction
between brand equity and customer equity. Their result suggests, “the value of brands
and customer portfolios should be jointly measured so as to obtain trustworthy assessments
of firm value” (Romero & Yague, 2015).
Stewart (2009) states that since “marketing consists of 20-25% of a firm’s expenditures,
it is imperative to establish the linkage between marketing investment and product or service
performance”. This should be done considering a thorough understanding of all the alternative
measures. Thus, in terms of measurement, Mizik (2014) state that “the aggregate analyses
indicate that brand equity, as measured by customer mindset metrics, positively affects
current financial performance”. The author observed “the much greater impact of brand equity
on the firm’s future financial performance so as that only a small portion of the total financial
impact of brand equity is reflected in current year profits, whereas a larger amount of
the profitability impact is realized in the future”.