Executive summary of “Investigating brand equity of third-party service providers”

Citation

(2014), "Executive summary of “Investigating brand equity of third-party service providers”", Journal of Services Marketing, Vol. 28 No. 3. https://doi.org/10.1108/JSM-03-2014-0107

Executive summary of “Investigating brand equity of third-party service providers”

Article Type: Executive summary and implications for managers and executives From: Journal of Services Marketing, Volume 28, Issue 3

This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.

Some jobs are high-profile – lots of people know who is involved, who does what, why we need the right people to do them. Others are somewhat “invisible” in that, essential as they are, fewer people know or care what’s involved and what’s happening. If the business proceeds satisfactorily, hidden from public awareness, what does it matter? Water comes out of the taps, food appears on the supermarket shelves, gasoline comes out of the fuel station pumps, the light goes on when you click a switch, human waste disappears when you flush in a bathroom.

Such an important yet rather unappreciated task (at least from an end-customer’s perception) is that of the third-party logistics service provider (3PL) whose primary role is to move and/or store goods through the supply chain from point of origin to point of consumption on behalf of shippers or sellers and customers or buyers. By performing this function in a timely and efficient manner, a 3PL will satisfy the needs of both the shipper and customer for that service provision. Job done.

However, it is perhaps important that these “invisible” heroes come out into the open. As the 3PL is responsible for an efficient and timely flow from shipper to customer, their impact on the service provision process is important. Consequently, their corporate brand equity may also be important to both customers and shippers to ensure their respective service expectations are confirmed by subsequent performance and the consequent generation of loyalty toward the 3PL.

Indeed, some of the larger 3PLs have been involved in initiatives to build and maintain brand image in both consumer and business-to-business segments. For example, the Eddie Stobart group which employs more than 6,000 people at 50 sites across the UK is one of the country’s best-known companies and Stobart has become a “superbrand”. Its ingenious marketing involves a club whose “truck spotter” members get a fleet handbook. There are board games and models of the company’s lorries on sale and – above all – a television series which provides a fly-on-the-wall documentary of the drivers at work. Result? Stobart truckers regularly get friendly waves from people who feel they know them and know the important work they are doing. The company is a national leader in multimodal logistics, warehousing and biomass fuel sectors, as well as operating in the property development, ports, airports and civil engineering sectors – and what’s more, thousands of TV viewers know all about it.

Other big players in the segment have also been raising their profile. For example, DHL notes that it is “the global market leader in the international express courier business, with a parcel delivery network spanning more than 220 countries. As a DHL customer, you can benefit directly from this.” UPS, as part of its “We Love Logistics” advertising campaign, encourages visitors to its Web site to download its television commercials and also offers its campaign jingles for mobile phone ringtones. A 2012 ranking survey of UK “superbrands” found three 3PLs in the top 20: FedEx (12), Eddie Stobart (15) and DHL (16).

Bearing in mind the wisdom that a firm should develop its brand leadership as a capability that gives it a competitive advantage, in “Investigating brand equity of third-party service providers”, Professor David Grant et al. report on a research study investigating the associated relationship of a 3PL’s service offerings, resultant customer satisfaction, customer loyalty toward the 3PL and resultant corporate brand equity for the 3PL. They propose that third-party logistics service quality positively influences shipper and customer satisfaction, which again positively influences loyalty. Basing their study in Finland, this construct of logistics service quality is based on service, cost, capacity and schedule. Deregulation of the transportation business began in the 1990s in Finland and greatly increased the number of 3PL and transportation companies, thereby improving the opportunities for industrial companies to outsource transport and supply chain operations to external service providers.

However, the sizes of such companies generally remain small, and competition is very tight. Rates have stayed at low levels and fuel price changes have often led to considerable problems for companies. Due to this tight competition, 3PLs need to find new ways to differentiate themselves from the competitors. One way to do this is by developing and providing strong service offerings, which should in turn lead to satisfaction, loyalty and brand equity.

It is recommended that 3PL managers should concentrate on the quality of their service offerings to ensure customer satisfaction and thus increase loyalty from shippers and customers. This should add to their corporate brand equity which should also be beneficial in the long-term. By doing so, 3PLs will better position themselves strategically and should generate a competitive advantage relative to competitors or firms considering internalizing their logistics activities.

To read the full article enter 10.1108/JSM-06-2012-0104 into your search engine.

(A précis of the article “Investigating brand equity of third-party service providers”. Supplied by Marketing Consultants for Emerald.)