Feelings of uncertainty and powerlessness from Covid-19: Implications for advertising appeals in the restaurant industry

Are rational (emotional) advertising appeals more congruent with healthy (indulgent) products? Prior research shows inconsistent results on the congruency effect between appeal type and product category. This study sheds light on this topic by examining the moderating effect of two psychological states (i.e., feelings of uncertainty and powerlessness) caused by Covid-19 on the relative effectiveness of rational vs. emotional appeals in the context of food advertisements. The results suggest that people with low levels of uncertainty respond more favorably to rational (vs. emotional) appeals of a healthy food item, and this effect is attenuated among people with high levels of uncertainty. On the other hand, powerful people find emotional (vs. rational) appeals of an indulgent food item more attractive, and this effect is attenuated among powerless people. Theoretical and managerial implications are discussed.     

The impact of advertising on patrons’ emotional responses,perceived value,and behavioral intentions in the chain restaurant industry: The moderating role of advertising-induced arousal

The purpose of this study was twofold: to investigate the structural relationships between patrons’ emotional responses induced by advertising, their perceived value, and their behavioral intentions in the chain restaurant industry; and to investigate which attributes of advertising bear the strongest impact on behavioral intentions. Based on the literature review, six evaluative dimensions of advertising were derived: relevant news, brand reinforcement, stimulation, empathy, familiarity, and confusion. Theoretical relationships between these six evaluative dimensions and patrons’ emotional responses, perceived value, and behavioral intentions were derived based on the literature review. Following the collection and analysis of data obtained from chain restaurant patrons, it was found that four dimensions of advertising in particular (relevant news, stimulation, empathy, and familiarity) have a significant impact on inducing emotional responses in patrons. Among the four dimensions, stimulation was found to bear the most significant effect on patrons’ emotional responses. It can thus be stated that advertising-induced emotional responses positively influence patrons’ perceived value. During this study, it was found that the level of arousal induced by advertising plays a moderating function in the relationship between patrons’ emotional responses and hedonic value. The possible interpretations of these findings and their managerial implications are discussed in the latter part of this article.     

The effect of increasing employee compensation on firm performance: Evidence from the restaurant industry

This study examined the effect of employee compensation on restaurant performance from both short-term and long-term perspectives. The results of this study showed that increasing employee compensation immediately enhances (decreases) restaurant revenue growth (profitability) but decreases (improves) restaurant revenue growth (profitability) after one year. The results suggested that restaurant firms can utilize employee compensation as a management tool to enhance performance in terms of both short-term revenue growth and long-term profitability gains. The results further implied that restaurant firms could consider making small but continuous increases in employee compensation to maintain higher performance outcomes. However, such increases should be implemented with appropriate initiatives to reduce shirking behaviors by overpaid employees.     

The financial impact of online customer reviews in the restaurant industry: A moderating effect of brand equity

The salient impact of electronic Word-of-Mouth (eWOM) on firm performance has been widely noticed by scholars and practitioners. While eWOM serves as an important source of information that helps reduce perceived uncertainty risks in service purchases, it is highly likely that other sources of information are simultaneously used with eWOM in the purchase decisions. Thus, this study empirically examined the financial effects of restaurant eWOM (review volume and review rating) and their changes in the presence of brand equity. Three-stage least squares analysis was employed in the empirical investigation. Our findings revealed that review volume and review rating contributed to restaurant profitability. Brand equity was found to moderate the effects of the review attributes on restaurants profitability, which implies that eWOM has a greater influence on the financial performance of weak-branded restaurants than strong-branded ones. Implications for researchers and practitioners are discussed.     

Application of upper echelon theory for corporate social responsibility dimensions: Evidence from the restaurant industry

ABSTRACT

This study applies upper echelon theory and validates its conceptual framework by investigating chief executive officers’ observable determinants (e.g., the age, tenure, and formal education of top managers) of corporate social responsibility (CSR) in the restaurant industry. Multiple CSR dimensions (e.g., operational, non-operational, community, diversity, employee, environment, and product) are examined through fixed effects regression. The results indicate that older and highly educated CEOs who serve more stakeholders perform fewer CSR activities, whereas longer tenured CEOs who serve more stakeholders perform more CSR activities. Consequently, non-operational, community-, diversity-, employee-, and environment-related CSR activities are significantly explained by the proposed attributes. By validating both the theoretical perspectives of upper echelon theory and the role of stakeholder demands in CSR decisions, this research can contribute to expanding the CSR and upper echelon literature to the restaurant industry.     

CSR and financial performance: The role of CSR awareness in the restaurant industry

Initiatives for corporate social responsibility (CSR) often have served business as a source of competitive advantage. However, despite firms’ attempts to capitalize on their CSR efforts, stakeholders’ low awareness of these initiatives makes it difficult to realize the full value of the strategic CSR. In this study, we propose and test in the context of the restaurant industry whether CSR awareness, measured by CSR media coverage, moderates the relationship between the social and financial performance. Our results support the notion that stakeholders’ CSR awareness affects the manner in which CSR initiatives can result in financial gain. Our research has implications both for firms’ investment policies in social initiatives and for highlighting the importance of communicating CSR initiatives to relevant stakeholders.     

Moderating effect of capital intensity on the relationship between leverage and financial distress in the U.S. restaurant industry

During the recent and ongoing economic turmoil, countless businesses have been facing financial distress and many have filed for bankruptcy. This issue is especially critical for the restaurant industry due to restaurants’ sensitivity to economic fluctuations. Therefore, the purpose of this study is to examine the financial distress issue in the U.S. restaurant industry. In particular, the study examines a moderating effect of capital intensity on the relationship between a firm's leverage and degree of financial distress. The dataset includes publicly traded U.S. restaurant firms during the period 1990–2008. The study measures the degree of financial distress by modified Z-scores, and findings suggest a positive moderating effect of capital intensity on the relationship between leverage and financial distress.     

Time-series forecasting: a testing of applications to the food-service industry

This paper examines the use of an intuitively appealing forecasting model for the food-service industry. After examining the current state of forecasting a brief introduction to the time-series method is undertaken. Finally, the simplest form of the model is applied in a case study.     

Travelers' switching behavior in the airline industry from the perspective of the push-pull-mooring framework

We tested the applicability of the push-pull-mooring (PPM) migration theory to travelers' airline selection in order to clarify their switching behavior. Based on the extensive review of the literature and open-ended survey, we identified the constituents of four push, three pull, and four mooring factors. A field survey was conducted at an international airport in South Korea, and a total of 529 complete responses were used for data analysis. Our results showed that the PPM model comprising the second-order factor structure provided an acceptable representation of the observed variables in a comparison with the first-order construct model. Results of the structural analysis also indicated that all PPM categories directly affected switching intention. In addition, mooring dimension had a significant moderating effect on the relationship between pull category and switching intention. However, no moderating effect of mooring factor on the relationship between push factor and switching intention was found.     

The effect of relational benefits on perceived value in relation to customer loyalty: An empirical study in the Australian coffee outlets industry

Retaining and cultivating customer loyalty has become increasingly important for coffee outlet marketers and operators due to the highly competitive environment. This study aims to develop and test a model investigating how relational benefits enhance perceived value to win customer loyalty. Using a self-administered questionnaire survey, 949 respondents from coffee outlets were used for this study. The findings show that relational benefits have direct effect on perceived value and customer loyalty. In addition, relational benefits also have indirect effect on loyalty via perceived value. Finally, perceived value positively influenced customer loyalty. The findings suggest that coffee outlet operators with a better understanding of their customers’ perceptions, and help them in developing competitive strategies that differentiate themselves from competitors and win customer loyalty in an aggressive market.     

The moderating role of context in the effects of choice attributes on hotel choice: A discrete choice experiment

This study used discrete choice modeling to identify the moderating role of context in the effects of cognitive, affective, and sensory attributes on hotel choice. To evaluate a hotel consumer's choice for attributes in a different choice context (leisure vs. business), a stated preference experiment based on D-optimal design was conducted using both a multinomial logit (MNL) model and a random parameter logit (RPL) model. The results show that while leisure travelers' choices for family vacation trips were more influenced by price and overall atmosphere than were business travelers', business travelers put an emphasis on room quality and comfort when on a business trip alone. The study demonstrates the trade-offs made by leisure and business travelers when choosing a hotel through discrete choice modeling. The findings provide hotel managers with important insights and implications in terms of target segmentation, product development, and marketing communication strategy.     

Managing relationships in the Tourism Supply Chain to overcome epidemic outbreaks: The case of COVID-19 and the hospitality industry in Spain

The rapid spatial diffusion of the COVID-19 epidemic outbreak has resulted in the total economic disruption of the Tourism Supply Chain (TSC) causing a significant reduction in revenue and creating liquidity issues for all operators. Firms in TSC are linked to each other in complex patterns, leading one risk to another. The purpose of this article is to understand the role of relationship management between hotel chains and their key TSC agents in order to overcome economic disruptions caused by epidemic outbreaks. Among the main contributions of this article are the identification of governments, tour operators, and competitors as the key relationships to be managed by hospitality firms. In addition, key areas for coordination with these actors are explored. Finally, the objectives of relationship management according to the partner are also addressed.     

FDI spillovers in the Chinese hotel industry: The role of geographic regions,star-rating classifications,ownership types,and foreign capital origins

Although productivity spillovers have long been recognized to be a major benefit of foreign direct investment (FDI), such spillovers have not yet been systematically studied in the context of the hotel industry. This paper investigates hotel-related FDI spillover effects as well as moderating factors (geographic region, star rating classification, ownership type and foreign capital origin) in China. Evidence from province-level panel data reveals the existence and significance of intra-industry spillovers from foreign to domestic hotels in China, although the nature and magnitude vary based on different moderating factors. Domestic hotels in eastern and western China and those with alliance and limited liability ownership structures benefit significantly from productivity spillovers. Foreign-invested three-star hotels transfer a significant amount of positive productivity, whereas domestic three- and five-star hotels benefit the most from productivity spillovers. Moreover, foreign-invested hotels from Hong Kong, Macau, and Taiwan (HMT) and non-HMT countries generate positive spillovers of similar magnitudes.