Essay On Shlesinger And Heskett's Conceptual Model Cycle Model

CHAPTER FIVE

CONCEPTUAL MODEL DEVELOPMENT AND HYPOTHESES FORMULATION

5.1 Introduction

5.2 Frameworks and models suggesting the relationships between CBBE, EBBE, Brand Equity and Market Performance constructs

5.2.1 Aaker’s (1996) CBBE model

5.2.2 Kwon’s (2013) EBBE model

5.2.3 Buil et al. (2013) CBBE and consumer response model

5.2.4 Schlesinger and Heskett’s (1991) model of the cycle of firm success

5.3 Developing this study’s conceptual model

5.4 Hypotheses formulation

5.5 Conclusion

5.1 Introduction

It has been posited that employees and brands are a company’s most valuable assets. While their contributions to a firm performance are often determined in different disciplines, Vomberg et al. (2015) suggest a simultaneous examination

They developed the concepts of "cycle of success" and "cycle of failure". In the cycle of success, they propose that an investment in employees’ ability to provide superior service to customers can be seen as a virtuous cycle in which benefits would be interlinked. Furthermore, they emphasize that efforts spent in selecting and training employees and creating a corporate culture in which they are empowered can lead to increased employee satisfaction and employee competence. Consequently, this will possibly result in superior service delivery and customer satisfaction. This in turn, will create customer loyalty, improved sales levels, and higher profit margins. Some of these profits can be reinvested in employee development thereby initiating another iteration of a virtuous cycle. Reichheld (1996), in an effort to contribute to the brand loyalty literature; expanded the loyalty business model beyond customers and employees. He looked at the benefits of obtaining the loyalty of suppliers, employees, bankers, customers, distributors, shareholders, and the board of directors while Duff and Einig (2015) expanded the model to debt issuers and credit ratings agencies to investigate what role commitment plays in issuer-CRA

Consequently, when employees are satisfied, it is most likely that their performance will improve, which will increase the level of customer satisfaction, and so on (Schlesinger and Heskett 1991). This becomes a cycle or chain of benefits to the key players within the business organization. In the aforementioned context, Heskett et al. (1997) proposed an extension of the cycle of success, recognizing that customer satisfaction is a significant intervening variable between the workplace reality of employees and the financial results of each business unit, particularly in the service sector. They developed a service-profit chain business model with a direct financial link between customer satisfaction, customer loyalty and financial performance of a company in terms of profit and