The use of corporate reputation in the development of brand image strategy in the Taiwanese pharmaceutical industry

Abstract

This doctoral research aims to investigate the reputation building process of companies and to examine the applicability of western-developed theories about the uses of corporate reputation in a non-western context. It is the first study that synthesises three theories (value creation, strategic resources and corporate communication) to examine the strategic consequences of the uses of corporate reputation.

Corporate reputation is an attribute or a set of attributes ascribed to a firm and inferred from the firm’s past actions. It is the belief of market participants about a firm’s strategic character (Weigelt and Camerer, 1988). Also, corporate reputation is the public’s cumulative judgement of a firm over time (Roberts and Dowling, 2002).

The review of theoretical literature indicates the uses of corporate reputation by business organizations can be theorized along six dominant paradigmatic perspectives: 1-public relations; 2-marketing; 3-management, 4-economic; 5-sociological; 6-finance and accounting. The uses of corporate reputation in these six paradigms are comprehensively discussed. The objective of this study is to establish the use of corporate reputation in the development of brand image strategy. A review of the uses of the concept of corporate reputation is discussed in detail in chapter 2.

The review of the literature also identified a research gap by showing that scarce research has been conducted on how these three main functions (value creation, strategic resources and corporate communication) affect a company’s brand positioning strategy. The following research question thus is proposed: How do (Taiwanese pharmaceutical) companies use their corporate reputation to develop a brand image strategy?

The research hypotheses based on three theories (value-based theory, resource-based theory and integrated marketing communication theory) appear in Chapter 3. The research question is constructed theoretically, and then a conceptual model, which begins with three antecedents of corporate reputation and simultaneously illustrates the outcomes of their use, are discussed.

The construct of the uses of corporate reputation has three dimensions: value creation, strategic resources and corporate communication. Each of these three dimensions includes several items. The items were proposed based on the previous researchers’ summaries and the qualitative interview. The researcher will then depict the proposed research conceptual framework and a number of hypotheses that will be further investigated and tested.

Then the quantative study was completed by providing the data analysis and the results were explained. A multi-stage procedure was involved in this research. First, data examination and screening to prepare for subsequent quantitative analyses and then the descriptive statistics were presented. Second, a reliability test was performed on measurement scales to ensure that they achieve an acceptable level of reliability for further analysis. The resulting solutions were then re-assessed using confirmatory factor analysis. Finally, PLS (Partial Least Squares) was used to test the hypothesized relationships between the research constructs as postulated in the conceptual model, and to assess the overall goodness-of-fit between the proposed model and the collected data set.

The researcher then discusses the validation of the measurement model and the research findings. The findings are then further discussed in terms of the contribution to marketing theory and relevance to marketing managers. Then the items of adapted scales were subjected to several rounds of adjustments and were finally found to possess acceptable measurement properties. Reliability and construct validity tests indicated that all scales satisfied widely accepted criteria such as the minimum reliability of 0.7. The results of scale purification will be discussed. And an evaluation of the research hypotheses and their significance are summarized, the findings of all hypotheses testing will be reviewed and compared with previous research.

According to the research findings, the hypotheses that value creation, as one dimension of corporate reputation, has a positive impact on brand segmentation, brand differentiation and brand positioning are all accepted. The hypotheses that strategic resource, as one dimension of corporate reputation, has a positive impact on brand segmentation and brand differentiation are rejected. However, the hypothesis that strategic resource, as one dimension of corporate reputation, has a positive impact on brand positioning is accepted. The hypotheses that corporate communication, as one dimension of corporate reputation, has a positive impact on brand segmentation and brand differentiation are both accepted. The hypothesis that corporate communication, as one dimension of corporate reputation, has a positive impact on brand positioning is partially supported. Finally, the hypothesis that the (see in Table 5.18) moderating effect of price policy on corporate reputation has a positive impact on brand image strategy is partially but negatively supported.

This thesis makes a significant contribution to the study of corporate reputation of firms in the Taiwanese pharmaceutical industry from the robustness of the qualitative and quantitative data collection.