The mediating role of brand reputation: the analysis of discrepancy between theory and fact

Abstract

The aim of this research is to investigate the role of brand reputation as a mediating variable in the relationship between service quality and loyalty. The MRI’s survey shows that there is a degradation in the ranking of the Oversea Chinese Bank Corporation- Nilai Inti Sari Penyimpan Bank (OCBC-NISP Bank) from 2009 to 2011, while the number of customers has increased over the same time frame. This indication highlighted the fact that although the quality of service decreased, the consumer’s loyalty increased. This shows a contradiction in regard to previous research into the relationship between service and loyalty, such as Al-Rousan and Mohamed (2010), and Akbar et al., (2010). The authors suggest the existence of a variable that mediates the relationship between service (service quality) and consumer loyalty, which is brand reputation. The sample size of this research was determined at 125 respondents. The data were collected by self-administered questionnaires. Results showed that a partial mediation, performed by brand reputation, occurred in the relationship between service quality and loyalty. This research shows that brand reputation is still deemed to be the cause of loyalty. The authors also made some recommendations.