Reciprocity of a Retailer’s Corporate Image and Store Image: Moderating Roles of Evaluation Approaches and Corporate Brand Dominance

Abstract

The aggressive internationalization and diversification of service organizations, especially retailers, has been accompanied by a dearth of research on the advantages of establishing relations among corporate, store and product brands across countries. To address this lack of information, this study examines the reciprocity of retailer’s corporate image and store image as well as the moderating roles of culture-specific and firm-specific factors. Based on the accessibility-diagnosticity theory, we hypothesize that the two images are connected through feedback loops, where the store image has a greater degree of influence on the corporate image than vice versa. Furthermore, we hypothesize that the variation in the reciprocal effects of the corporate and store images is explained by consumers’ culture-specific evaluation approaches and corporate brand dominance. Based on experiments conducted in a country with an analytical style of thinking and a country with a holistic style of thinking as well as an experiment considering a fictitious retailer, the results from the non-recursive models indicate that the two images interact throughout several cycles of the feedback loop. Moreover, the degree of reciprocity is enhanced by the consumers’ holistic thinking and perceptions of a firm’s branding strategy. Managers should take note of these important reciprocal relations because although they manage retail brands across different organizational levels, for consumers, the store image is more important than the corporate image. Moreover, the reciprocity of the corporate and store images provides greater benefits in predominantly holistic Asian countries than in analytic western countries.