The influence of entrepreneurial branding on entrepreneurial/growth orientations: an empirical study in the Austrian tourism industry.

• Author: Peters, Mike

1. INTRODUCTION

   A number of scientific contributions interpret the two concepts of EO (EO) and brand orientation (BO) in the same way as a source of sustainable competitive advantages and long-term company success (Zahra, 1993; Verhees and Meulenberg, 2004; Morrison and Crane, 2007). According to Miller (1983), entrepreneurially oriented companies are characterized by innovative, proactive and risk-taking behaviour. Entrepreneurial branding can accordingly be described as corporate branding for entrepreneurial, i.e. innovation- or growth-oriented, small enterprises. It can be regarded as one domain within the new research field of entrepreneurial marketing (e.g. Morris et al., 2002; Hills et al., 2008). Such an orientation is mostly found in start-ups/new ventures or young SMEs, where the brand is especially important as a guiding mechanism for customers in terms of the company's reputation.

   In the tourism industry, BO can be of the highest importance for the entrepreneurs. Looking at the number of service brand registrations (e.g. at the German Patent and Trademark Office), it becomes clear that the importance of service brands has been increasing for many years, from 20% in 1995 to nearly 45% in 2001 (Stauss, 2004). Although brand awareness is increasingly growing in the holiday tourism industry in particular, many hotels lack a clear, distinctive image, as well as an own brand identity (Gangl, 2008). The necessity for building a service brand or a hotel brand arises from the characteristic features of the service product. The immateriality of services and the direct participation of the guest in the service production process makes it difficult to achieve a constant quality (Burmann and Maloney, 2008). These problems can be overcome by a strong hotel brand, as it can operate as a symbol for trust and orientation, and therefore contributes to reducing the consumer's subjectively perceived risk (Liping and Hobson, 2004; Burmann et al., 2005). Here, brands have an orientation function and create transparency (Berry, 2000). A brand is a tool for competitive differentiation and creates additional value, especially for mid-market and upscale hotels (O'Neill and Xiao, 2006). Although the creation of a strong brand in the hotel industry is of enormous importance, the literature has so far not or hardly ever dealt with the existence of brand awareness in the small-structured holiday hotel industry (Berthon et al., 2008; Miles and Darroch, 2008).

   In tourism research, an increasing number of researchers have analyzed the behaviour of small business units. These studies focus on family business management (e.g. Peters and Buhalis, 2004) and especially on entrepreneurial cultures in the industry (e.g. Ateljevic and Doorne, 2004; Shaw and Williams, 2004). Weiermair et al. (2007) identified a certain type of entrepreneur in the Austrian Alps and derives the need for business adjustment and reorganisation of internal processes to adapt changing tourism industry environments. In Austria about 80% of all hotel businesses in the Alpine province of Tyrol are small businesses with less than 50 full-time employees. In summer 2007 about 4,412 hotels provided 175,328 beds with an average of only 39.7 beds per hotel unit (BMWA, 2008). Many of these hotel businesses in the European Alps suffer from insufficient strategy management and marketing (e.g. branding) skills and lacking economies of scales and scope. In addition, many Alpine tourism destinations are in the stagnation phase of the destination life- cycle where innovative entrepreneurship is required to rejuvenate or relaunch the tourism product life cycle (Weiermair et al., 2007). Thus, this study will shed more light upon these small business entrepreneurs' orientation towards branding and entrepreneurship.

   In the past, a number of authors supported the assumption that market orientation is crucial for the development of innovative products (Simmonds, 1986; Moorman and Rust, 1999). Some research efforts focused on the analysis of the relationship between the degree of marketing orientation adoption and company performance (e.g. Narver and Slater, 1990; Cadogan and Diamantopoulos, 1995). Based on case studies, Wong and Merrilees (2005) could indicate various typologies of brand orientation among small businesses, while Urde (1999) highlighted the importance of managers' brand orientation for firm performance. Li et al. (2008) discovered that EO has a moderating role between Chinese small business market orientation and firm performance. BO is a concept that focuses on managers' attitudes and behaviour towards branding initiatives in which the processes of the organization revolve around the creation, development and protection of brand identity in an ongoing interaction with target customers. The aim is to achieve lasting competitive brand advantages (Urde, 1994; Ewing and Napoli, 2005). Therefore, this study postulates a correlation between BO and EO in small businesses in the tourism industry. This connection is even more important in small-structured hotels, where usually one entrepreneur is responsible for significant strategic business decisions. So far, there has not been any empirical evidence of a connection between BO and EO in the hotel industry. The aim of this paper is to determine how hoteliers evaluate their EO and BO. Secondly, it will be examined whether correlations between the derived factors of EO and BO actually exist. From a scientific point of view, this allows tourism research to narrow the focus when attempting to explain entrepreneurial growth efforts or growth barriers in small tourism businesses.

   SMEs in the tourism sector often face strong qualification gaps, as their owners have to manage every functional part of the business on their own. Thus, tourism, hospitality and leisure industries are primarily based on entrepreneurship, including a large number of small businesses and non-growth-oriented ownership entrepreneurs (Williams et al., 1989; Thomas, 2000; Getz and Petersen, 2004; Morrison, 2006). The letter can be regarded to seriously constrain the development of tourism destinations or regions (Shaw and Williams, 1998; Ateljevic and Doorne, 2000). Some studies observe that individual openness, years spent abroad, or work experience in other industries influence the tourism entrepreneurs' perception of entrepreneurial activity and marketing (Weiermair, 2000). It can be assumed that underlying factors of BO are able to positively influence EO within this service industry. However, we still only know little about the EO and BO of tourism entrepreneurs. In this respect, this article investigates 1) the main factors explaining the EO and BO of tourism entrepreneurs, and 2) the correlation between these factors of BO and EO.

2. THEORETICAL BACKGROUND

   2.1. Brand Orientation

   BO is part of a firm's marketing orientation (Hankinson, 2001). The importance of the BO is particularly visible in service sectors, and in comparison to consumer goods services are usually intangible (Zeithaml et al., 1985; Klaus and Maklan, 2007). The immateriality of the service entails that the customer classifies the purchase of services as much more risky (Bharadwaj et al., 1993; Berry, 2000). For this reason, it is very important that the service provider establish a high degree of confidence towards the customer (Normann, 1991). These challenges can be overcome with the help of a brand. Bruhn (2001) defines the service brand as a distinctive, firmly anchored image in the customer's head. He also assumes that the service brand is responsible for creating customer benefits as well for building confidence or trust. With the help of a brand, service providers try to reduce or overcome the perceived purchase risk of the customer and his/her uncertainty (Chernatony and Segal-Horn, 2001; Grove et al., 2002; Burmann et al., 2005). Stauss (2004) adds that a brand is a quality indicator, bundling information on the expected overall quality of performance and thus creating buyer's certainty and trust. A successful service brand can also defend businesses against imitators. Service intangibility results in the fact that service itself can hardly be protected against imitation. For this reason, it is of the utmost importance to build up strong brands in service industries (Tomczak and Brockdorff, 2000; Krishnan and Hartline, 2001).

   In the literature, there are different approaches to brand management, such as the functional, competitive, technocratic, image-, and strategy-oriented approach. Each has different emphases. For service brands, the identity-oriented brand management is suitable, because customers and employees play a very important role in its creation (Chernatony et al., 2006). Here, with regards to content, the focus is on brand personalization and brand identity. It is assumed that brand identity plays a very important role in the purchase behaviour (Tan Tsu Wee, 2004; Bamert and Wehrli, 2005). The main task of management is to create a more consistent and coherent brand identity. Brand identity is a prerequisite for building trust, which leads to long-term customer retention (Meffert and Burmann, 2005). Customers who are loyal to their brands forgive mistakes in service provision more easily and rarely turn to competing brands. In addition, the brand has become one of the most important intangible assets. The focus of the identity-oriented approach is the reciprocity of brand image (customer perception) and brand identity (Chernatony and McDonald, 2003). Furthermore, an interlinking of brand-related activities across company borders occurs (Burmann and Zeplin, 2005). The brand identity can be implemented with the creation of an independent and unique brand personality. Their direct determinants include customers, employees and executives who may have a direct impact on the brand personality through their behaviour and personality characteristics (image)...