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Customer-based corporate reputation of a service firm: scale development and validation

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Abstract

Although corporate reputation has attracted significant attention among marketing scholars, current measures of it do not adequately capture the perceptions of the most important stakeholder group, customers, and often overlook its relationship to important customer-outcome variables. In this article, we identify dimensions of customer-based corporate reputation and develop scales to measure these dimensions (Study 1). Based on comprehensive validation procedures across three service firm types, we found support for a five-dimensional scale with the following dimensions: Customer Orientation, Good Employer, Reliable and Financially Strong Company, Product and Service Quality, and Social and Environmental Responsibility. In Study 2, using a second sample, we validate our scale and examine its relationship with important customer-outcome variables—customer satisfaction, loyalty, trust, and word of mouth. Most of the reputation dimensions were strongly associated with important outcome variables, with a few exceptions. We discuss the results with reference to the marketing implications.

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Notes

  1. We conducted a principal axis factor analysis because it tends to be used when the purpose is to get the least number of factors which can account for the common variance (correlation), excluding variable-specific variance (Hatcher 1994; Malhotra 1999). Also, principal axis factoring allows the dimensions to be related to each other. Oblique rotation was chosen because we expected the dimensions to be correlated.

  2. The AVE roughly corresponds to the Eigenvalue in Exploratory Factor Analysis.

  3. Model identification was also achieved when the data pertaining to the three service contexts—banking, retailing, fast-food—were analyzed separately (GFI = 0.90/0.92/0.94, AGFI = 0.89/0.93/0.93, NNFI = 0.91/0.93/0.95, CFI = 0.97/0.96/0.97, RMR = 0.03/0.07/0.05, RMSEA = 0.09/0.08/0.07, χ 2/df = 3.35/3.09/2.66).

  4. We also compared our CBR scale with the RQ of Fombrun et al. (2000) by performing a confirmatory factor analysis on our data for the RQ items. The CFA resulted in a marginal model fit (GFI = 0.76, AGFI = 0.74, NNFI = 0.75, CFI = 0.87, RMR = 0.06 RMSEA = 0.09, χ 2/df = 5.72); six indicators had a coefficient of determination of less than 0.40. A re-specified model with 14 items was calculated, which led to an improved model fit. Overall, the RQ did not represent our data very well and not as well as our five-dimensional CBR scale.

  5. The second-order model exhibits a marginal to acceptable fit (GFI = 0.84, AGFI = 0.82, NNFI = 0.86, CFI = 0.87, RMR = 0.04, RMSEA = 0.07, and χ 2 = 1392.545, df = 345 (χ 2/df = 4.03, p = 0.00)). The χ 2/df value is higher than that of the multidimensional model, but within the acceptable range of 2–5 (Marsh and Hovecar 1985).

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Acknowledgments

The authors wish to thank the anonymous reviewers and the editor for numerous valuable comments as well as Grahame Dowling, Michael Jones, and Nicole Ponder for their comments on earlier versions of the paper.

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  1. Institute for Management, University of Koblenz-Landau, Universitätsstrasse 1, 56070, Koblenz, Germany

    Gianfranco Walsh

  2. Culverhouse College of Commerce and Business Administration, University of Alabama, P. O. Box 870225, Tuscaloosa, AL, 35487-0225, USA

    Sharon E. Beatty

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Walsh, G., Beatty, S.E. Customer-based corporate reputation of a service firm: scale development and validation. J. of the Acad. Mark. Sci. 35, 127–143 (2007). https://doi.org/10.1007/s11747-007-0015-7

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