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The internal branding process and financial performance in service companies: An examination of the required steps

Author

Listed:
  • Sasu Tuominen

    (University of Eastern Finland)

  • Saku Hirvonen
  • Helen Reijonen
  • Tommi Laukkanen

Abstract

The objective of this study is to test how internal branding affects financial performance in service companies. Our hypothesized model suggests that internal branding has an indirect effect on financial performance (measured in terms of turnover growth and profitability growth) through brand values adoption, organizational commitment, brand performance and market performance. Structural equation modeling is used for testing the model. The data set consisted of 124 effective responses from Finnish service companies. Importantly, differing from the majority of earlier studies, financial performance is measured with objective data. The effects of internal branding proceed sequentially from inside an organization to the outside, showing that its impact on financial performance is a result of a relatively complex process mediated by several factors. The results reveal that internal branding indirectly affects brand performance and market performance, but not financial performance.

Suggested Citation

  • Sasu Tuominen & Saku Hirvonen & Helen Reijonen & Tommi Laukkanen, 2016. "The internal branding process and financial performance in service companies: An examination of the required steps," Journal of Brand Management, Palgrave Macmillan, vol. 23(3), pages 306-326, May.
    • Handle: RePEc:pal:jobman:v:23:y:2016:i:3:d:10.1057_bm.2016.9
    DOI: 10.1057/bm.2016.9
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    References listed on IDEAS

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    Cited by:

    1. Galina Biedenbach & Thomas Biedenbach & Peter Hultén & Veronika Tarnovskaya, 2022. "Organizational resilience and internal branding: investigating the effects triggered by self-service technology," Journal of Brand Management, Palgrave Macmillan, vol. 29(4), pages 420-433, July.
    2. Jiemiao Chen & Robert E. Smith, 2018. "The boundaries for ad creativity: effects of type of divergence and brand processing and responses," Journal of Brand Management, Palgrave Macmillan, vol. 25(6), pages 561-576, November.
    3. Rico Piehler & Debra Grace & Christoph Burmann, 2018. "Internal brand management: introduction to the special issue and directions for future research," Journal of Brand Management, Palgrave Macmillan, vol. 25(3), pages 197-201, May.
    4. Shaun M. Powell, 2016. "Journal of Brand Management – Year end review 2016," Journal of Brand Management, Palgrave Macmillan, vol. 23(6), pages 601-611, November.
    5. Kati Suomi & Saila Saraniemi & Mervi Vähätalo & Tomi J. Kallio & Terhi Tevameri, 2021. "Employee Engagement and Internal Branding: Two Sides of the Same Coin?," Corporate Reputation Review, Palgrave Macmillan, vol. 24(1), pages 48-63, February.

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