Strategic Management for Tourism and Hospitality Industry

Strategic Management for Tourism and Hospitality Industry

(TOUR 502 ) Article Summary

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Submitted by         :                  DOGA SENYIGIT    

Submitted to           :         PROF. DR. OSMAN KARATEPE

Article details :

From Mission Statement to airline branding

YiHsin Lin   ,   Chris Ryan

Journal of Air Transport Management 53 (2016) 150-160

Abstract

In this article the two authors (YiHsin Lin, Chris Ryan) tried to emphasize about the importance of having  a good mission statement together with the branding strategy for the airline companies, as these concepts may enhance  confidence of the passenger in the airplane. Therefore, the aim of the study is to analyze the correlation between the two variables mission statements and brand equity, including the third variable that is brand trust which acts as a moderating variable. Random sampling was used in this research  that 518 passengers at Taiwan Taoyuan International Airport took a survey. Results in overall show there is positive correlation between the airline companies’ mission statement and  understanding of the passenger’s brand trust and brand equity. Also brand trust is a mediator variable between brand equity and passenger perception. In general, this paper provides assistance for the research on airline companies’ mission statements and it acts as a guide for airline managers to study the relationships of these 3 variables and interpret them to apply them in practice.

Introduction

In this paper, the authors undertook a research with a sample of Taiwanese participants  to look how the airline’s mission statement might have an effect on the passengers’ perception of a carrier’s brand. It also focuses on the the mission statement accompanying the brand related terms such as brand image. The researchers wrote about the different  definitions from different researchers about the mission statement. Basically, the mission statement is an identity of the companies answering the questions about what does the company do, how does it do, why does it do and its reason for being including the why the stakeholders would want to work with this company. It also make a point about its importance as there are increase in the companies that uses mission statement as it shows better performance for the companies.

Apart from defining mission statement the researchers also defined the term brand image which is a way to get attraction from the consumers by fulfilling their wants and needs. For companies to differentiate themselves from their rivals in the industry they need to have a good brand image which a company must implement a correct branding process. To increase the brand trust of the customers the company must have a strong brand. Apart from the security there are other criterias including price, baggage handling , timing of the flight and cabin service and facilities which play also very important role in contribution for the brand image.

Another important brand related term is brand equity which is the subjective assessment of the brand in perspective of potential and current customers which also help to determine the increase in price of the product which is beneficial for the company. In airline industry if the airline company  has a good brand equity will point a customers have a more frequent preference and purchase intention for the airline.

As airline industry has heteregenous and international customer target it became really crucial for the airlines to have good brand image by representing their brands in their mission statements.So airline companies trying their best to improve their service quality which will make a better brand value.

The past research mostly focused on the impacts of mission statement in non-profit companies whether than the companies that aim to make profit and furthermore  there is a little research has been made in the mission statement of airline companies. Moreover the researchs that have been made mostly focused in the point of view of the internal stakeholders. So this study will emphasize on whether there is a relationship between mission statement and brand related terms in the eyes of the airline passengers.

Conceptual background

Mission statement is the fundamental thing for the airline company as it is a strategic key for  the company to execute better firm performance.  It also shows the path for the stakeholders to know their aims and rationale for being in the industry. To have a satisfying mission statement Pearce and David (1987) make an advice for the nine components which are clients,  services , location of the company , technology, concern for survival, philosophy, self-concept, concerning for the public image of the airline company and concerning for their staff. The other four components which are suggested by Campbell and Yeung (1991 a, b) are purpose, strategy , behaviour and values of the company. Mission statement has also directly related to branding  as when customers agrees with the mission statement they look more positive about the brand. By this way, strong brand also represents both the company values and it also expresses the customers choice, behavior and habits.

Branding represents the company in a way that the customers are not afraid to purchase the product as there is a less risk of having a bad value.Brand trust make the customers more relaxed as they know the product they are buying by relying the provided mission statement. So when this increased the brand value this also affiliated with the brand equity which will increased their recognition and value in the market. Brand equity in is both tangible and untangible assessment by the customers in financial and customer-based perspectives as it is customers’ responses to the marketing of the brand.

Hypotheses

 The authors of the research proposed three hypotheses as follows;

H1. The mission statement has a direct  effect on brand trust.

H2. The mission statement has a positive impact on brand

equity.

H3. Brand trust has a direct influence on brand equity.

The aim was to make assessment if the proposed linkages among these terms existed as if it is found it can be useful for the companies to implement them in their mission statement.

Methodology

The methodology part categorized into two as;

• Survey setup
• Sample characteristics

In survey setup section  there was a set of questions prepared about mission statement,  brand equity and brand trust. In mission statement variable  there were 10 questions asked in total including the philosopy of safety component.In brand equity there were 13 questions and to measure the brand trust 4 questions were created.In the questionnaire they had  5 point likert scale, 5 representing the opinion of  strongly agree and 1 representing if the respondents  strongly disagree.The questionnaire was written in English and Chinese then there was back translation made to make sure that respondents understand the questions fully. The questionnaire  was checked and modified by 30 students in Asia university who had  experienced both of these two  airline companies. Before giving the questions the respondents were asked to read the composition of the mission statements for the both airlines. There were 540 questionnaires distributed and out of this 540, there were 518 questionnaires which were valid meaning a 95.9% response rate.