Skip to main content
SpringerLink
Log in

Brand credibility and customer-based brand equity: a service recovery perspective

  • Original Article
  • Published:
Journal of Financial Services Marketing Aims and scope Submit manuscript

A Correction to this article was published on 03 July 2021

This article has been updated

Abstract

The aim of this paper is to examine the impact of perceived justice on satisfaction with service recovery and how this satisfaction with service recovery can increase both Lebanese banks’ brand credibility and customer-based brand equity. The questionnaire was completed by a total of 403 bank customers. The findings of this paper indicate that perceived justice strongly influences satisfaction with service recovery. Similarly, satisfaction with service recovery affects both Lebanese banks’ brand credibility and customer-based brand equity. Moreover, the regression analysis demonstrates that satisfaction with service recovery partially mediates the relationship between perceived justice and brand credibility and customer-based brand equity.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

Change history

References

  • Aaker, D.A. 1991. Managing brand equity. New York, NY: WordPerfect.

    Google Scholar 

  • Adams, S. 1963. Toward an understanding of inequity. Journal of Abnormal and Social Psychology 67(5): 422–436.

    Article  Google Scholar 

  • Adams, S. 1965. Inequity in social exchange. Advances in Experimental Social Psychology 2(1): 267–299.

    Article  Google Scholar 

  • Akleh, T. 2020a. Banking confidence, exchange rate are key to Lebanese recovery, says banker, ArabianBusiness. https://www.arabianbusiness.com/banking-finance/452251-banking-confidence-exchange-rate-are-key-to-lebanese-recovery-says-banker. Accessed 12th Feb 2021.

  • Akleh, T. 2020b. Lebanese banks post record losses amid warning that worse may be to come, ArabianBusiness. https://www.arabianbusiness.com/banking-finance/453613-most-lebanese-banks-post-big-losses-amid-warning-that-worse-is-to-come. Accessed 12th Feb 2021.

  • Association of Banks in Lebanon. 2020. Contribution to the Lebanese Government’s financial recovery plan. https://www.abl.org.lb/Library/Assets/Gallery/Documents/ABL%20Contribution%20ENGLISH%20AW.pdf. Accessable 12th Feb 2020.

  • Baek, T.H., and K.W. King. 2011. Exploring the consequences of brand credibility in services. Journal of Services Marketing 25(4): 260–272.

    Article  Google Scholar 

  • Bagherzadeh, R., M. Rawal, S. Wei, and J.L.S. Torres. 2020. The journey from customer participation in service failure to co-creation in service recovery. Journal of Retailing and Consumer Services 54(1): 102058.

    Article  Google Scholar 

  • Bitner, M.J., B.H. Booms, and M. Stanfield. 1990. The service encounter: Diagnosing favorable and unfavorable incidents. Journal of Marketing 54(1): 71–84.

    Article  Google Scholar 

  • Blodgett, J.G., D.H. Granbois, and R.G. Walters. 1993. The effects of perceived justice on complainants’ negative word of mouth behavior and repatronage intentions. Journal of Retailing 69(4): 399–428.

    Article  Google Scholar 

  • Blodgett, J.G., D.J. Hill, and S.S. Tax. 1997. The effect of distributive, procedural, and interactional justice on post complaint behavior. Journal of Retailing 73(2): 185–210.

    Article  Google Scholar 

  • Bougoure, U.S., R.R. Bennet, S.F.E. Hasan, and G. Mortimer. 2016. The impact of service failure on brand credibility. Journal of Retailing and Consumer Services 31(1): 62–71.

    Article  Google Scholar 

  • Chan, S.H.J., and H.Y.I. Lai. 2017. Understanding the link between communication satisfaction, perceived justice and organizational citizenships behavior. Journal of Business Research 70(1): 214–223.

    Article  Google Scholar 

  • Chang, C.C., and J.S. Hung. 2018. The effects of service recovery and relational selling behavior on trust, satisfaction, and loyalty. International Journal of Bank Marketing 36(7): 1437–1454.

    Article  Google Scholar 

  • Chi, C.G.Q., B. Wen, and Z. Ouyang. 2020. Developing relationship quality in economy hotels: The role of perceived justice, service quality, and commercial friendship. Journal of Hospitality Marketing & Management. 29(8): 1027–1051.

    Article  Google Scholar 

  • Choi, B., and B.J. Choi. 2014. The effects of perceived service recovery justice on customer affection, loyalty, and word-of-mouth. European Journal of Marketing 48(1/2): 108–131.

    Article  Google Scholar 

  • Choi, B., and S. La. 2013. The impact of corporate social responsibility (CSR) and customer trust on the restoration of loyalty after service failure and recovery. Journal of Service Marketing 27(3): 223–233.

    Article  Google Scholar 

  • Cifci, S., Y. Ekinci, and G. Whyatt. 2016. A cross-validation of consumer-based brand equity models: Driving customer equity in retail banks. Journal of Business Research 69(9): 3740–3747.

    Article  Google Scholar 

  • Cornish, C. 2020. Lebanese bankers plead their case to some new sheriffs, Financial Times. https://www.ft.com/content/0838e10c-5481-4d76-a013-ad607a19b7d8. Accessed 12th Feb 2021.

  • Dennis, C., S. Papagiannidis, E. Alamanos, and M. Bourlakis. 2016. The role of brand attachment strength in higher education. Journal of Business Research 69(8): 3049–3057.

    Article  Google Scholar 

  • Duffy, J.A., J.M. Miller, and J.B. Bexley. 2006. Banking customers’ varied reactions to service recovery strategies. International Journal of Bank Marketing 24(2): 112–132.

    Article  Google Scholar 

  • Dwivedi, A., L.W. Johnson, D.C. Wilkie, and L.D. Araujo-Gil. 2018. Consumer emotional brand attachment with social media brands and social media brand equity. European Journal of Marketing 43(3): 276–292.

    Google Scholar 

  • Geigenmuller, A., and H.B. Outland. 2012. Brand equity in B2B services and consequences for the trade show industry. Journal of Business and Industrial Marketing 27(6): 428–435.

    Article  Google Scholar 

  • Ghorban, Z.S., and H. Tahernejad. 2012. A study on the effect of brand credibility on word of mouth: With reference to internet service providers in Malaysia. International Journal of Marketing Studies 4(1): 26–37.

    Google Scholar 

  • Gohary, A., B. Hamzelu, and H. Alizadeh. 2016. Please explain why it happened! How perceived justice and customer involvement affect post-recovery evaluations: A study of Iranian online shoppers. Journal of Retailing and Consumer Services 31(1): 127–142.

    Article  Google Scholar 

  • Goodwin, C., and I. Ross. 1990. Consumer evaluations of responses to complaints: What’s fair and why. Journal of Service Marketing 4(3): 53–61.

    Article  Google Scholar 

  • Goodwin, C., and I. Ross. 1992. Consumer responses to service failures: Influence of procedural and interactional fairness perceptions. Journal of Business Research 25(2): 149–163.

    Article  Google Scholar 

  • Guenzi, P., and L. Georges. 2010. Interpersonal trust in commercial relationships. European Journal of Marketing 44(1/2): 114–138.

    Article  Google Scholar 

  • Ha, H.Y., S. Janda, and S. Muthaly. 2010. Development of brand equity: Evaluation of four alternative models. The Service Industries Journal 30(6): 911–928.

    Article  Google Scholar 

  • Hair, J.F., W.C. Black, B.J. Babin, and R.E. Anderson. 2006. Multivariate data analysis. Hoboken, NJ: Prentice-Hall.

    Google Scholar 

  • Harun, A., M. Rokonuzzaman, G. Prybutok, and V.R. Prybutok. 2018. How to influence consumer mindset: A perspective from service recovery. Journal of Retailing and Consumer Services 42(1): 65–77.

    Article  Google Scholar 

  • Hayes, A.F. 2009. Beyond Baron and Kenny: Statistical mediation analysis in the new millennium. Communication Monographs 76(4): 408–420.

    Article  Google Scholar 

  • Homburg, C., and A. Furst. 2005. How organizational complaint handling drives customer loyalty: An analysis of the mechanistic and the organic approach. Journal of Marketing 69(3): 95–114.

    Article  Google Scholar 

  • Hsu, K.T. 2012. The advertising effects of corporate social responsibility on corporate reputation and brand equity: Evidence from the life insurance industry in Taiwan. Journal of Business Ethics 109(2): 189–201.

    Article  Google Scholar 

  • Iglesias, O., S. Markovic, and J. Rialp. 2019. How does sensory brand experience influence brand equity? Considering the roles of customer satisfaction, customer affective commitment, and employee empathy. Journal of Business Research 96(C): 343–454.

    Article  Google Scholar 

  • Jung, N.Y., and Y.K. Seock. 2017. Effect of service recovery on customers’ perceived justice, satisfaction, and word-of-mouth intentions on online shopping websites. Journal of Retailing and Consumer Services 37(1): 23–30.

    Article  Google Scholar 

  • Kau, A.K., and E.W.Y. Loh. 2006. The effect of service recovery on consumer satisfaction: A comparison between complaint and non-complaint. Journal of Service Marketing 20(2): 101–111.

    Article  Google Scholar 

  • Keisidou, E., L. Sarigiannidis, D.I. Maditinos, and E.I. Thalassinos. 2013. Customer satisfaction, loyalty and financial performance: A holistic approach of the Greek banking sector. International Journal of Bank Marketing 31(4): 259–288.

    Article  Google Scholar 

  • Keller, K.L. 1993. Conceptualizing, measuring, and managing customer-based brand equity. Journal of Marketing 57(1): 1–22.

    Article  Google Scholar 

  • Kelley, S.W., and M.A. Davis. 1994. Antecedents to customer expectations for service recovery. Journal of the Academy of Marketing Science 22(1): 52–61.

    Article  Google Scholar 

  • Kim, K.H., K.S. Kim, and D.Y. Kim. 2008. Brand equity in hospital marketing. Journal of Business Research 61(1): 75–82.

    Article  Google Scholar 

  • Kukar-Kinney, M., L. Xia, and K.B. Monroe. 2007. Consumers’ perceptions of the fairness of price-matching refund policies. Journal of Retailing 83(3): 325–337.

    Article  Google Scholar 

  • Kuo, Y.F., and C.M. Wu. 2012. Satisfaction and post-purchase intentions with service recovery of online shopping websites: Perspectives on perceived justice and emotions. International Journal of Information Management 32(2): 127–138.

    Article  Google Scholar 

  • Lapidus, R.S., and L. Pinkerton. 1995. Customer complaint situations: An equity theory perspective. Psychology and Marketing 12(2): 105–122.

    Article  Google Scholar 

  • Lewis, B.R., and S. Spyrakopoulos. 2001. Service failures and recovery in retail banking: The customers’ perspective. International Journal of Bank Marketing 19(1): 37–48.

    Article  Google Scholar 

  • Liu, M.T., I.A. Wong, T.H. Tseng, and A.W.Y. Chang. 2017. Applying consumer-based brand equity in luxury hotel branding. Journal of Business Research 81(1): 192–202.

    Article  Google Scholar 

  • Loureiro, S.M.C., and E.M. Sarmento. 2018. Enhancing brand equity through emotions and experience: The banking sector. International Journal of Bank Marketing 36(5): 868–883.

    Article  Google Scholar 

  • Mathew, V., and S. Thomas. 2018. The direct and indirect effect of brand experience on true brand loyalty: Role of involvement. Asia Pacific Journal of Marketing and Logistics 30(3): 725–748.

    Article  Google Scholar 

  • Maxham, J.G., and R.G. Netemeyer. 2002. Modeling customer perceptions of complaint handling over time: The effect of perceived justice on satisfaction and intent. Journal of Retailing 78(4): 239–252.

    Article  Google Scholar 

  • Migacz, S.J., S. Zou, and J.F. Petrick. 2017. The terminal effects of service failure on airlines: Examining service recovery with justice theory. Journal of Travel Research 57(1): 1–16.

    Google Scholar 

  • Mohd-Any, A.A., D.S. Mutum, E.M. Ghazali, and L.M. Zulkifli. 2019. To fly or not to fly? An empirical study of trust, post-recovery satisfaction, and loyalty of Malaysia airlines passengers. Journal of Service Theory and Practice 29(5/6): 661–690.

    Article  Google Scholar 

  • Mostafa, R.B., C.R. Lages, H.A. Shabbir, and D. Thwaites. 2015. Corporate image: A service recovery perspective. Journal of Service Research 18(4): 468–483.

    Article  Google Scholar 

  • Muhammad, L., and G. Rana. 2020. Mediating role of customer forgiveness between perceived justice and satisfaction. Journal of Retailing and Consumer Services 52(1): 101886.

    Article  Google Scholar 

  • Nair, S. 2013. Assessing customer satisfaction and brand awareness of branded bread. Journal of Business and Management 12(2): 13–18.

    Google Scholar 

  • Nguyen, D.T., J.R. McColl-Kennedy, and T.S. Dagger. 2012. Matching service recovery solutions to customer recovery preferences. European Journal of Marketing 46(9): 1171–1194.

    Article  Google Scholar 

  • Nikbin, D., I. Ismail, and M. Marimuthu. 2013. The relationship between informational justice, recovery satisfaction, and loyalty: The moderating role of failure attributions. Service Business 7(3): 419–435.

    Article  Google Scholar 

  • Nunnally, J.C., and I.H. Bernstein. 1994. Psychometric theory. New York: Mcgraw-Hill.

    Google Scholar 

  • Oliver, R.L. 1980. A cognitive model of the antecedents and consequences of satisfaction decisions. Journal of Marketing Research 17(4): 460–469.

    Article  Google Scholar 

  • Olsen, S.O. 2002. Comparative evaluation and the relationship between quality, satisfaction, and repurchase loyalty. Journal of the Academy of Marketing Science 30(3): 240–249.

    Article  Google Scholar 

  • Pappu, R., and P. Quester. 2006. Does customer satisfaction lead to improve brand equity? An empirical examination of two categories of retail brands. Journal of Product and Brand Management 15(1): 4–14.

    Article  Google Scholar 

  • Pappu, R., P.G. Quester, and R.W. Cooksey. 2005. Consumer-based brand equity: Improving measurement—Empirical evidence. Journal of Product and Brand Management 14(3): 143–154.

    Article  Google Scholar 

  • Percy, L., and J.R. Rossiter. 1992. A model of brand awareness and brand attitude advertising strategies. Psychology & Marketing 9(4): 263–274.

    Article  Google Scholar 

  • Radu, A., J. Surachartkumtonkun, S. Weaven, and P. Thaichon. 2020. Examining antecedents of reconciliation following service failure and recovery. Journal of Strategic Marketing 28(5): 417–433.

    Article  Google Scholar 

  • Rahman, M., S. Haron, and L. Paim. 2016. The effect of soft and extreme action in public complaint behavior on satisfaction with complaint handling. International Review of Management and Marketing 6(7): 209–213.

    Google Scholar 

  • Rather, R.A. 2020. Customer experience and engagement in tourism destinations: The experiential marketing perspective. Journal of Travel & Tourism Marketing 37(1): 15–32.

    Article  Google Scholar 

  • Rawls, J. 1971. A theory of justice. Cambridge: Harvard Univesity Press.

    Book  Google Scholar 

  • Rio-Lanza, A.B., R.V. Casielles, and A.M. Diaz-Martin. 2009. Satisfaction with service recovery: Perceived justice and emotional responses. Journal of Business Research 62(8): 775–781.

    Article  Google Scholar 

  • Roggeveen, A.L., M. Tsiros, and D. Grewal. 2012. Understanding the co-creation effect: When does collaborating with customers provide a lift to service recovery? Journal of the Academy of Marketing Science 40(6): 771–790.

    Article  Google Scholar 

  • Rucker, D.D., K.J. Preacher, Z.L. Tormala, and R.E. Petty. 2011. Mediation analysis in social psychology: Current practices and new recommendations. Social and Personality Psychology Compass 5(6): 359–371.

    Article  Google Scholar 

  • Ruyter, K.D., and M. Wetzels. 2000. Customer equity considerations in service recovery: A cross-industry perspective. International Journal of Service Industry Management 11(1): 91–108.

    Article  Google Scholar 

  • Sachdev, S.B., and H.V. Verma. 2004. The relative importance of service quality dimensions: A multisectoral study. Journal of Service Research 4(1): 93–116.

    Google Scholar 

  • Schoefer, K. 2008. The role of cognition and affect in the formation of customer satisfaction judgments concerning service recovery encounters. Journal of Consumer Behavior 7(3): 210–221.

    Article  Google Scholar 

  • Shamim, A., and M.M. Butt. 2013. A critical model of brand experience consequences. Asia Pacific Journal of Marketing and Logistics 25(1): 102–117.

    Article  Google Scholar 

  • Shams, G., M. Abdur Rehaman, S. Samad, and R.A. Rather. 2020. The impact of the magnitude of service failure and complaint handling on satisfaction and brand credibility in the banking industry. Journal of Financial Services Marketing 25(1): 25–34.

    Article  Google Scholar 

  • Singhal, S., A. Krishna, and D. Lazarus. 2013. Service failure magnitude and paradox: A banking perspective. Journal of Relationship Marketing 12(3): 191–203.

    Article  Google Scholar 

  • Siu, N.Y.M., T.J.F. Zhang, and C.Y.J. Yau. 2013. The roles of justice and customer satisfaction in customer retention: A lesson from service recovery. Journal of Business Ethics 114(4): 675–686.

    Article  Google Scholar 

  • Smith, A.K., and R.N. Bolton. 1998. An experimental investigation of customer reactions to service failure and recovery encounters. Journal of Service Research 1(1): 65–81.

    Article  Google Scholar 

  • Smith, A.K., R.N. Bolton, and J. Wagner. 1999. A model of customer satisfaction with service encounters involving failure and recovery. Journal of Marketing Research 36(3): 356–372.

    Article  Google Scholar 

  • Sweeney, J., and J. Swait. 2008. The effect of brand credibility on customer loyalty. Journal of Retailing and Consumer Services 15(3): 179–193.

    Article  Google Scholar 

  • Tax, S.S., S.W. Brown, and M. Chandrashekaran. 1998. Customer evaluations of service complaint experiences: Implications for relationship marketing. Journal of Marketing 62(2): 60–76.

    Article  Google Scholar 

  • Tektas, O.O. 2017. Perceived justice and post-recovery satisfaction in banking service failures: Do commitment types matter? Service Business 11(4): 851–870.

    Article  Google Scholar 

  • Torres, A., and J.A. Tribo. 2011. Customer satisfaction and brand equity. Journal of Business Research 64(10): 1089–1096.

    Article  Google Scholar 

  • Van Osselaer, S.M.J., and C. Janiszewski. 2001. Two ways of learning brand associations. Journal of Consumer Research 28(2): 202–223.

    Article  Google Scholar 

  • Wei, C., M.W. Liu, and H.T. Keh. 2020. The road to consumer forgiveness is paid with money or an apology? The roles of empathy and power in service recovery. Journal of Business Research 118(1): 321–334.

    Article  Google Scholar 

  • Wirtz, J., and A.S. Mattila. 2004. Consumer response to compensation, speed of recovery, and apology after a service failure. International Journal of Service Industry Management 15(2): 150–166.

    Article  Google Scholar 

  • Xu, Y., R. Marshall, B. Edvardsson, and B. Tronvoll. 2014. Show you care: Initiating co-creation in service recovery. Journal of Service Management 25(3): 369–387.

    Article  Google Scholar 

  • Yang, Z., and R.T. Peterson. 2004. Customer perceived value, satisfaction, and loyalty: The role of switching costs. Psychology and Marketing 21(10): 799–822.

    Article  Google Scholar 

  • Yavas, U., O.M. Karatepe, T. Avci, and M. Tekinkus. 2003. Antecedents and outcomes of service recovery performance: An empirical study of frontline employees in Turkish banks. International Journal of Bank Marketing 21(5): 255–265.

    Article  Google Scholar 

  • Yoo, B., N. Danthu, and S. Lee. 2000. An examination of selected marketing mix elements and brand equity. Journal of the Academy of Marketing Science 28(2): 195–211.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Faculty of Business Administration, Beirut Arab University, Beirut, Lebanon

    Azzam Rifi

  2. Faculty of Commerce, Damanhour University, Damanhour, Egypt

    Rania B. Mostafa

Authors
  1. Azzam Rifi
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Rania B. Mostafa
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Rania B. Mostafa.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

The original online version of this article was revised: Error in Figure 1 and 2 captions.

Appendix

Appendix

See Table 7.

Table 7 Questionnaire items
Full size table

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Rifi, A., Mostafa, R.B. Brand credibility and customer-based brand equity: a service recovery perspective. J Financ Serv Mark 27, 1–16 (2022). https://doi.org/10.1057/s41264-021-00097-x

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/s41264-021-00097-x

Keywords

Search

Navigation