Impact of Ingredient Branding on the Hotel Brand: Spillover Effect of Branded Amenities
Abstract
Ingredient branding is a popular marketing strategy, in which a brand uses a different branded product as a component in the main one. Utilizing ingredient branding, a host brand can benefit from the positive evaluation of a component brand that customers are already aware of. Although the hotel industry has applied a substantial number of other brands as internal factors, there has been little awareness or research on ingredient branding. The main purpose of the study was to investigate 1) whether ingredient branding has a positive impact on a hotel brand equity and 2) whether the effect varies for different types of hotels. The study was based on 472 samples collected from an online survey. The study examined the impact of branded amenities on hotel brand equity based on six dimensions: perceived quality, brand image, loyalty, satisfaction, behavior intentions, and perceived value. The study also demonstrated that the spillover effect varies by types of hotels and willingness to pay extra charges induced by branded amenities. The results indicate that branded amenities had significant impacts on all six dimensions of hotel brand equity, and the effects were diverse for different hotel classes. A midscale hotel benefited the most by ingredient branding while an economy hotel had lower effects compared to a midscale hotel despite overall positive impacts. On the contrary, a luxury hotel barely had an advantage of branded amenities, although there were statistical significances on three factors of brand equity (i.e., perceived intention, loyalty, perceived quality). The study provides managerial implications for each type of hotel.