Diagnosing the Relationship Between Corporate Reputation and Retail Patronage
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Volume 9 Number 4
Diagnosing the Relationship Between Corporate Reputation and Retail Patronage Wei-Ming Ou Department of Marketing Management, Shih Chien University, Kaohsiung, Taiwan Russell Abratt H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University, Ft. Lauderdale, FL, USA
ABSTRACT
Corporate reputation is relatively stable, longterm, collective judgments by outsiders of an organization’s achievements. It may be an important factor that influences consumer behavior. A study was conducted in Taiwan to investigate the effects of retailer reputation on consumer store patronage patterns. A sample of 350 supermarket consumers was studied in Taiwanese cities. It was found that corporate reputation does not have a significant impact on shopping expenditure, time traveled and patronage frequencies. Three explanations that hindered the influence of corporate reputation on consumers’ shopping expenditure, travel time and patronage frequencies in grocery shopping contexts are proposed; they are perishable goods, price consciousness and reputation indifference. These imply consumers might have a positive impression toward a grocery retailer; yet they just do not want to patronize the retailer anymore. Implications for reputation and retailing research are discussed. Corporate Reputation Review (2006) 9, 243–257. doi:10.1057/palgrave.crr.1550032 KEYWORDS: corporate reputation; retailing;
Taiwan; supermarket patronage INTRODUCTION
The resource-based view asserts that firms gain and sustain competitive advantages by
deploying valuable resources and capabilities that are superior, scarce and inimitable (Barney, 1991; Ray et al., 2004; Roberts and Dowling, 2002). One of the valuable resources that executives can exploit is corporate reputation. Corporate reputation is relatively stable, long-term, collective judgments by outsiders of an organization’s action and its achievements. It implies a long lasting, cumulative assessment rendered over a long time period (Gioia et al., 2000). Both academics and practitioners propose that positive corporate reputation results in business survival and profitability (Balmer, 2001; Gray and Balmer, 1998; Roberts and Dowling, 2002; Van Riel and Balmer, 1997), and is an effective mechanism to preserve or accomplish competitive advantage (Fombrun et al., 2000; Fombrun and Shanley, 1990; Van Riel and Balmer, 1997). Although the advantages of positive corporate reputation are clear, there could be negative reaction by some stakeholders to a positive corporate reputation in some situations. Some recent studies have highlighted the limitations of positive corporate reputation (eg, Ou et al., 2006; Porritt, 2005). One of the critical decisions confronting the consumer in interacting with retail stores is store patronage (Nevin and Houston, 1980). Leszczyc and Sinha (2000) indicated that store choice was a dynamic decision and
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Corporate Reputation Review, Vol. 9, No. 4, pp. 243–257 © 2006 Palgrave Macmillan Ltd, 1363-3589 $30.00
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