The effect of price, brand name, and level of advertising on perceived service quality, perceived service value, and purchase intention of the lodging industry

This dissertation investigates the effects of price, brand name, and level of advertising on consumers’ perceptions of service quality, service value, and their willingness to stay at a lodging facility. Hypotheses are derived from a conceptual model to posit the relationship that the three extrinsic cues of price, brand name, and level of advertising have with the constructs of perceived service quality, perceived service value, and willingness to stay (purchase intention). Additionally, the interaction effects of the extrinsic cues on the three constructs are evaluated. Moreover, the relationships among the constructs of perceived service quality, perceived service value, and willingness to stay are examined.

Overall, the analysis gave strong support for the hypothesized effects of price. There was a lack of support for the hypothesized effects of brand name and level of advertising on consumers’ service evaluations. Results revealed that perceived service value is a more comprehensive measure of consumers’ overall evaluation of a service than perceived service quality.

Theoretically, this research partially tests a model that goes beyond the price perceived good quality paradigm. Managerially, this study helps in determining the price, brand name, and level of advertising appropriate to obtain better service evaluations from consumers.