Implementation of service profit chain initiatives in a franchise system

Abstract

PURPOSE: The purpose of this paper is to evaluate the implementation of the service profit chain as an entrepreneurial marketing initiative within a defined franchise system. An objective is also to evaluate these initiatives against service quality dimensions. Despite recognition of the merits and advantages of service profit chain initiatives of retention, related sales and referrals, little research has empirically addressed the perceptions of franchisees regarding these initiatives.

DESIGN/METHODOLOGY/APPROACH: Methodology includes the empirical analysis of evaluating the effectiveness of service profit chain implementation, primarily based on initiatives of retention, related sales and referrals. Research methodology comprises the survey approach, using electronic media and Surveypro analysis. This is facilitated by descriptive and inferential statistical techniques using SPSS version 11.0 data analysis. Inferential significance tests include the ANOVA Kruskal-Wallis hypothesis test; and the Cronbach's coefficient alpha.

FINDINGS: Hypothesis tests highlight the significance of a positive association between service profit chain initiatives and service quality. All service profit chain initiatives were deemed appropriate. Item analysis highlights specific dominant service profit chain initiatives, linking key relationship marketing and service quality themes.

RESEARCH LIMITATIONS/IMPLICATIONS: Findings are indicative of implementation opportunities, including measurement of loyalty within the system, developing customer feedback and complaint systems, and communicating the value of service profit chain enhancement within the franchise system.

ORIGINALITY/VALUE: Originality includes cognizance of entrepreneurial orientation, relationships and service quality when implementing service profit chain initiatives. Concurrent research opportunities include the implementation of other entrepreneurial marketing initiatives, including relationship marketing and benchmarking for best practice.