The effect of quality of relations on brand value in franchise alliance

Franchising is one of the dominant strategic methods for international strategies. In franchise method, the franchiser agrees for franchisee to use the franchisers brand, product, etc. in exchange of fees. This method is one of the key strategic methods (Leek and Christedoulides, 2014) for internationalization. The quality of relationship between the two business partners play a key role for franchising success. The quality of relationship has three dimensions including trust, commitment and satisfaction (Athanasopoulou, 2009). This research focuses on this important issue in international strategy. More specifically we will discuss the brand value, quality of relationship and brand citizenship behavior. According to the literature, the specific value of brand includes: quality of relationship, the brand image and the brand loyalty (Nyadzayo et al, 2016). The quality of relationship itself, has two dimensions including brand trust and commitment (Kim et al, 2002). The brand citizenship behavior includes seven dimensions namely, brand consideration, brand enthusiasm, sportsmanship, brand endorsement, self-development, and brand advancement (Nyadzayo, et al, 2016). Theoretical framework and literature review In this research we synthesized the literature and developed the conceptual framework of the research. Sehat et al (1393) in their research entitled “customer’s loyalty improvement, based on relational marketing” concluded that, enthusiasm in brand has strong impact on customer’s loyalty. Erkmen and Hancer (2014) investigated the role of trust in branding. Rezgani (1993) has also investigated the relationship between salesforces behavior and trust in marketing. Asadpoor (1392) also concluded that long-term compare to short-term relationship has meaningful effect on perception of brand and loyalty. Therefore, in this research we developed the following hypothesis: H1: Quality of relations has significant and positive effect on brand citizenship behavior. H2a: Brand citizenship behavior has positive and significant effect on value of relations. H2b: Brand citizenship behavior has positive effect on brand’s image. H2c: Brand citizenship behavior has positive effect on the brand’s commitment. H3: Brand’s citizenship behavior as mediating variable has positive effect on the relationship between quality of relations and special value of brand. H4: Franchise competence moderates the relationship between quality of relations and brand citizenship behavior components through behavior. H5: Duration of relationship moderates the relationship between quality of relations and brand citizenship behavior components through behavior.

This is an applied research using survey as research design. It is a quantitative research. The data has been collected using questionnaire. The sample has been drawn from the companies operating in home appliances manufacturing industry. In total 268 completed questionnaires have been collected. Prior to distribution of the questionnaires we conducted a pilot study. The face validity and content validity of the questionnaire have been tested. The internal consistent of the constructs have been verified by calculating Cronbach Alfa (quality of relations α= 0.71, brand’s citizenship behavior α= 0.89, special value of brand α= 0.90 and the franchiser’s competence α= 0.87). We conducted the data analysis in three levers. First, the descriptive analysis helped us to analyze variables individually to get a broad picture of the distribution of the data. Then we conducted bivariate analysis to test the correlation between the variables. Then we conducted multi-regression analysis using structural equation modeling to test the hypothesis.

The data has been analyzed in three levels. Descriptive analysis of the data revealed that most of the respondents were female. Majority of the respondents have had less than 6 years old. We have also found that most of the data for the measured variables were distributed normally. The association between variables have been measured using spearman rank-order correlation. All measured variables were associated significantly. We used factor analysis for testing the model of the research. The model test revealed that the SEM model was fit (RMSEA: 0.055, GFI: 0.886, PCLOSE: 0.175). We tested the hypotheses. The hypotheses one, the relationship between quality of relations and brand citizenship behavior was significant and positive. The relationship between the brand citizenship behavior and both quality of relation, brand image and brand commitment all were positive and significant. We also found significant relationship between all research variables.

The data analysis shows that quality of relations has significant effect on the brand citizenship behavior. It means that the agents those have better relations with their business partners have more autonomy to perform. They get more loyal to the franchiser. The agents pass this image of better quality of products and services to the customers. Trust is a key element in establishing good relationship between the franchiser and franchisees. It is concluded that to increase quality relationship in franchise strategic method, the firms should establish trust and become more loyal to the reciprocal relationships.