National versus local brands: Examining the influences of credence and experience services on customer perceptions of quality in a franchise context

The purpose of this research is to investigate differences in customer perceptions of quality between credence and experience industries. The paper expands on the implications of national versus local firms and does so within a franchise context.

Based on a sample of 349 consumers, three core SERVQUAL dimensions (reliability, security and tangibility) were analyzed to determine customer perceptions of quality. A mixed-factorial designed was used to evaluate different scenarios of purchasing intentions, measuring the main and interactive effects of service type and criticality among franchised and local brands.

Significant differences were found in customer perceptions of quality between experience- and credence-based services. A significant moderating effect of the level of criticality was shown to play an important role in customers’ perceptions.

This experimental laboratory study highlights the importance for managers to understand the differences in perceptions of customers when dealing between service types and acting under conditions of varying criticality. This holds true for both franchised and non-franchised businesses.

This study offers one of the first investigations of customer perceptions of quality in specific industry types (i.e. credence and experience) within a franchise system. Depending on the industry type, customers have different expectations of quality. The authors offer several specific ways in which managers can use this knowledge to their advantage.