Re‐examining the effect of service recovery: the moderating role of brand equity

Purpose – The purpose of this study is to investigate the role of brand equity in handling service failure and examine the effects of brand equity on service recovery. Design/methodology/approach – A conceptual framework is proposed which includes that satisfaction, as a mediator, accounts for the relationship between service recovery attributes (distributive, procedural, and interactional justice) and post‐recovery behavior (repatronage intentions and word‐of‐mouth behavior). More importantly, brand equity is used to serve as the moderator in the hypothesized research model. Structural equation modeling techniques are applied to data collected from a field study in Taiwan to test the framework. Findings – Results from the current field study found that strong brand equity provides an overall advantage over weak brands in increasing service recovery satisfaction and behavior intentions (repatronage intentions and word‐of‐mouth behavior). Research limitations/implications – The data used in this study were collected in a single metropolitan area in Taiwan. Future research might be conducted in a variety of countries. Practical implications – Service recovery strategies in responding to service failures are part of the critical task for service managers. This paper suggests that building brand equity is a means by which post‐failure satisfaction and behavioral intentions may be enhanced. Originality/value – This is the first study to completely compare the high brand equity with low brand equity in the effect of service recovery.