Understanding brand and dealer retention in the new car market: The moderating role of brand tier |
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Authors: | Peter C. Verhoef Fred Langerak |
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Affiliation: | a University of Groningen, School of Economics, Department of Marketing, P.O. Box 800, NL-9700 AV Groningen, The Netherlands b Rotterdam School of Management, Erasmus University, Department of Marketing Management, Office T10-16, P.O. Box 1738, NL-3000 DR Rotterdam, The Netherlands c Rotterdam School of Economics, Erasmus University, Office H15-19, P.O. Box 1738, NL-3000 DR Rotterdam, The Netherlands |
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Abstract: | Dealers may contribute to brand retention through their sales and service efforts. In this study we investigate the degree to which dealers contribute to brand retention and how this contribution is moderated by brand tier. To this end we distinguish between economy, volume and prestige brands. We also investigate how the effectiveness of dealer instruments to increase dealer retention differs across these brand tiers. We collected data on brand retention and dealer retention among consumers who recently purchased a new car. Our findings show that dealers selling volume brands are able to improve brand retention rates. In contrast, dealers of prestige and economy brands are unable to affect brand retention. In line with the notion of brand-dealer fit we also find that the effects of dealer extrinsic service quality and dealer payment equity on dealer retention differ between prestige, volume, and economy brands. Extrinsic dealer service quality has the smallest effect for dealers selling economy brands, while dealer payment equity is the most important determinant of dealer retention for these dealers. |
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Keywords: | Brand loyalty Dealer loyalty Brand-dealer fit Brand tiers |
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