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MIP
26,1
26
Received January 2007
Revised August, October 2007
Accepted October 2007
Marketing Intelligence & Planning
Vol. 26 No. 1, 2008
pp. 26-42
q Emerald Group Publishing Limited
0263-4503
DOI 10.1108/02634500810847138
The moderating effect of brand
image on public relations
perception and customer loyalty
An-Tien Hsieh
Da Yeh University, Taiwan, Republic of China, and
Chung-Kai Li
Ling Tung University, Taiwan, Republic of China
Abstract
Purpose – The purpose of the paper is to investigate the relationship between customer perceptions
of public relations (PR) and customer loyalty; to test for the moderating role of brand image in that
relationship.
Design/methodology/approach – Data were collected in a survey of customers of the insurance
industry in Taiwan, using a questionnaire designed on the basis of focus-group discussions with 30
consumers. Hierarchical regression analysis of data from 367 respondents was used to test two
hypotheses.
Findings – The results show that consumers’ perception of an organisation’s PR practice is an
antecedent of loyalty. The impact of public relations perception (PRP) on customer loyalty is stronger
and more significant when the brand image is favourable. If it is unfavourable, the effect of PRP on
customer loyalty is negligible.
Research limitations/implications – This study extends previous research by examining the
moderating role of brand image. Further research is indicated, to identify the key moderators of the
driving force of PR in relation to customer relationship marketing.
Originality/value – This paper proposes an original eight-item scale for the assessment of customer
PRP activity, which can be applied in practice to measure its effectiveness under different brand-image
conditions.
Keywords Public relations, Customer relations, Brand image, Customer loyalty, Insurance services,
Taiwan
Paper type Research paper
Introduction
How to develop, maintain, and enhance customer loyalty toward a firm’s products or
services is generally seen as the central thrust of marketing activities (Dick and Basu,
1994). Higher customer loyalty implies a higher market share and an ability to demand
relatively higher prices compared to those of competitors (Chaudhuri and Holbrook,
2001). This increased customer loyalty can also help lower marketing costs, solicit
more customers, and effectively operate trading leverage (Aaker, 1997). Additionally,
loyal customers foster positive word-of-mouth promotion, defy competitors’ strategies
(Dick and Basu, 1994) and generate higher corporate profits (Fornell and Wernerfelt,
1988; Reichheld et al., 2000). Loyalty factors are an organization’s most reliable success
indicators (Zeithaml et al., 1996). However, what are the factors influencing consumer
loyalty? The antecedent factors of customer loyalty have been discussed extensively in
numerous works, but the relationship between public relations (PR) and customer
loyalty needs further work because environmental changes have led businesses to PRP and
concentrate as much on societal orientation (Kitchen, 1996) as on the traditional customer loyalty
orientation of product and marketing. This in turn highlights the increased importance
of PR.
Cultip et al. (1985) defined PR as “the management function that identifies,
establishes, and maintains mutually beneficial relationships between an organization
and the various public on whom its success or failure depends.” Moreover, according to 27
a summary of empirical results from several studies, it is consumer perception of these
organization-public relationships that influences customer satisfaction evaluations,
behavioural intent and actual behaviour. Such a result has been shown for
school-student relationships (Bruning, 2002; Bruning and Ralston, 2001; Hon and
Brunner, 2001) and bank-customer relationships (Bruning, 2000; Bruning and
Ledingham, 2000) and indicates that customers that stay possess a higher level of PR
perception and satisfaction compared with those that leave. Ledingham and Bruning
(1998) note that the consumer’s awareness of organization-customer relationships could
raise their loyalty toward the corporation, which would in turn increase company
income, enhance market share, and achieve other corporate objectives. Coombs (2001)
also proposes that when corporations have plans to cultivate PR and fulfil commitment,
consumer’s loyalty to corporations would be higher. Although past scholars have not
produced consistent findings on the dimensions of establishing relationship quality
(Wulf et al., 2001), empirical results indicate that the relationship between corporations
and customers is increasingly intimate, and this would benefit the enhancement of
customer loyalty in the long run (Crosby et al., 1990; Morgan and Hunt, 1994).
However, previous research (Brown and Dacin, 1997; Ellen et al., 2000; Sen and
Bhattacharya, 2001) has not produced consistent results regarding the factors that
positively affect consumer perception of public relations (PRP) practice. Some studies
show that the inconsistent results might be caused by a moderator such as brand
association. However, how existing brand image especially negative brand image
impacts on the effectiveness of PR has received very little attention. To find out, it is
necessary to take into account the separate effects of positive and negative brand
images when analysing PR results.
Take, for example, the actions of tobacco giant Philip Morris. The company spent
$75 million on its charitable PR contributions in 1999, and then launched a $100 million
advertising campaign to publicize them. Not surprisingly, there are genuine doubts
about whether such approaches actually work or just breed public cynicism about the
company motives (Cone et al., 2003; Porter and Kramer, 2002). In the above case,
consumers’ unfavourable image of the firm caused PR to have a negative effect on their
attitude. It can be suggested, therefore, that brand image played a key moderator role.
Consequently, the purpose of this research study is to clarify the relationship between
PRP, brand image and customer loyalty. We first develop a conceptual model with
supporting research hypotheses. Next, we describe the research method. Finally, the
study findings are presented, and the managerial and research implication are
discussed.

Literature review and hypotheses

Figure 1 shows the research model underlying our study. The model begins with
customer PRP provided by an insurance company. PRP is presented as an antecedent
MIP Public relations H1 Customer
26,1 perception loyalty

H2

28
Figure 1. Brand image
Research model

to customer loyalty. Brand image is investigated as having a potential moderation role

between PRP and customer loyalty relationships. We present below the literature
review and the hypotheses developed.
Keller (2003) reported that in an increasingly networked economy, understanding
the consumers’ tendency to link a brand to other entities such as a person, place, thing,
or brand is crucial. In terms of linking a brand to a product, PR strategy can enhance
brand knowledge and establish brand awareness through recall and recognition. PR
can further enhance the brand associations of brand image, draw brand emotions, and
create brand attitude and experience. As customer loyalty is often viewed as resulting
from brand knowledge (Keller, 1993, 1999), it follows that PR can raise consumer
loyalty through the above strategies.
In addition, the self-congruence theory states that the ways consumers evaluate
products match their self-image (Belk, 1988; Sirgy, 1982). Consequently, a higher
congruence between self-image and product image would influence consumers’
attitudes or behaviour regarding brand preference, brand attitude, product purchase
decisions, customer satisfaction, and repurchasing intentions (Ekinci and Riley, 2003;
Graeff, 1996; Hong and Zinkhan, 1995; Sirgy, 1985). In contrast, in the case of
incongruence, consumers could refuse or avoid purchasing products and services,
which transmit negative intrinsic messages about themselves (Hogg and Banister,
2001). On the other hand, a person’s self-concept is comprised of a number of
self-identities, each varying along a continuum ranging from personal identity at one
end to social identity at the other (Tajfel and Turner, 1985). When social categorisation
is made salient through PR, consumers’ demand for social-identity increases (Mardigal,
2001), leading to higher consumer self congruence.
PR usually strive to create two kinds of brand associations (Hoeffler and Keller,
2002):
(1) user profiles, where customers (users) are portrayed as kind and generous, and
as doing good things; and
(2) brand personality, where the sincerity dimension of brand personality is
stimulated (Aaker, 1997).

Consumers perceive the people behind the brand as caring and genuine. Conversely,
consumers’ reaction to PR depends on their levels of self-congruence and how their
expectations match the company’s properties presented through PR efforts (Sen and
Bhattacharya, 2001). If consumers’ self-concept and perception of characteristics,
associations and values are identical to the company conducting PR activities,
consumers attach a higher degree of acceptance of the company. The phenomenon of PRP and
high self-congruence implies that consumers’ values and beliefs are mixed with those customer loyalty
of the company (Dutton et al., 1994). Higher consumer self-congruence enhances the
establishment of commitment and meaningful relationships with the organization and
intensifies customer loyalty. Therefore, organizations’ PR practice can raise
consumers’ self-congruence; the higher the self-congruence, the higher the consumer
loyalty. Thus, the first hypothesis is as follows: 29
H1. Customer PRP will be positively related to customer loyalty.
Cognitive psychologists believe that memory is extremely durable, so that once
information becomes stored in memory its strength of association decays very slowly.
Therefore, if consumers have committed a favourable brand image to memory, such a
perception is expected to guide the integration of new information (Petty and Cacioppo,
1986). This is also called the halo effect; there are two main types of halos in marketing
literature. The first type states that the response to a particular attribute can be
influenced by the general impression of the overall object (Beckwith and Lehmann,
1976). The second type asserts that the evaluation of a dominant attribute can influence
the response to other attributes. When consumers have a favourable brand image, this
could lead to a positive influence over other messages related to the brand. In other
words, the halo effect reflects the individual’s tendency to maintain cognitive
consistency and to avoid cognitive dissonance (Beckwith and Lehmann, 1976;
Holbrook, 1983; Wirtz and Bateson, 1995).
When brand image is favourable then proactive PR perceived by customers will be
more congruent to corporate reputation, consumers are more able to maintain positive
beliefs, attitudes and behaviours. As a result, favourable brand image can enhance the
PR effects and boost customer loyalty.
On the contrary, when consumers commit an unfavourable brand image to memory,
the organizations’ aggressive pursuit of PR activities can conflict with the consumers’
perceptions about the corporate’ reputation. Inconsistencies in the cognitive system
lead to consumer nervousness, and consumers develop a psychological tendency of
balanced differences (Leuthesser et al., 1995). At this time, consumers attempt to
identify a reasonable explanation for this phenomenon. The attribution theory, for
example, describes how people make causal inferences about the behaviour of others.
As noted, consumers may use aspects of an offer to make inferences about the motives
of the company. These inferences may in turn affect their evaluations of the offer. The
theory predicts a relationship between attributions and subsequent attitudes and
behaviours (Dean, 2002). In other words, consumers’ causal attributions of PR
motivation can influence their attitudes or behaviours. Unfavourable brand image
leads to a negative halo effect and also negatively influences other brand associations
(Wirtz and Bateson, 1995).
Those results could be due to the consumers’ lack of trust in organizations, which
can lead to consumers being sceptical about the sincerity of the organizations’ actions
(Coombs, 2001). Consumers also explore the motivation behind PR. If a consumer
perceives the organizations’ motives are egoistic or that PR is a means to attain profits
or avoid punishment, this impression will lead to harmful results for the organizations’
reputation (Sallot, 2002). Similar results were found in a qualitative study by Webb and
Mohr (1998). They discovered that about 50 per cent of the respondents believed that
MIP organizations have selfish motives in conducting PR initiatives; the remaining half
26,1 believed that organizations’ motives are simultaneously selfish and altruistic.
A negative attitude can also arise from scepticism over an organization’s honesty
and fairness in executing PR activities. Sceptical consumers doubt the integrity and
fairness of organizations’ PR initiatives, and tend to distrust organizations. In this case,
purchasing behaviour is not influenced by PR activities. Unfavourable brand image
30 reduces the positive effects brought about by PR, and thus the contribution toward
raising consumer loyalty is negligible. Therefore, the second hypothesis of this study
can be stated as follows:
H2. The relationship between PRP and customer loyalty is moderated by brand
image, and the tendency for PRP to be positively related to customer loyalty will
be significantly more pronounced when brand image is high rather than low.

Research method
Sample and data collection
Samples for this study were taken from consumers in Taiwan with actual experiences
in purchasing insurance. The study focused on the insurance industry because
Wee et al. (1996) suggested that the service industry and particularly insurance is
more concerned with and would be more willingly to participate in PR activities than
the manufacturing industry. In this research we take the broad view that an
unfavourable brand image is generally considered to be undesirable for the brand to be
associated with, from the consumers’ perception. Adopting convenience sampling,
we asked consumers to respond to questions according to the insurance companies
they are familiar with. Finally, 203 valid questionnaires were collected indicating
companies with a good brand image and 164 indicating companies with a poor brand
image. The total sample of 367 represented an effective response ratio 61.17 per cent,
with male (n ¼ 135) accounting for 36.8 per cent of the total sample. The majority of
respondents (41.5 per cent) were 20-30 years old, while those between 30 and 40 years
old made up 35.2 per cent of the total sample. The study used a seven-point Likert
scale, with scale anchors ranging from “1” (strongly disagree) to “7” (strongly agree),
all scale items are listed in the Appendix.

Measures
PRP is the independent variable of this study. Perception is defined as the process by
which an individual selects, organizes and interprets stimuli into meaningful and
coherent pictures of the word. Therefore, this study defines PRP as “consumers’ overall
perception of corporations’ dedication of time, efforts, and resources to public relations
practice.”
The scale employed was developed by the authors through a process as follows
(Devellis, 1991):
.
items were first collected through interviews with practitioners of professional
PR, and 14 items were generated;
.
we pre-tested our questionnaire with a convenience sample of 30 consumers; and
.
a scale validation procedure was established using item analysis, item-to-total
correlation, and exploratory factor analysis (EFA).
In the end, eight items remained in the PRP scale. PRP and
Customer loyalty is the dependent variable for this study. Related literature customer loyalty
provided different definitions and associated measurements for customer loyalty. Dick
and Basu (1994) suggested that loyalty is influenced by related forces of attitude and
behaviour. This study operationally defines customer loyalty as:
. . . a deeply held commitment to re-buy or re-patronise a preferred product or service
consistently in the future, thereby causing repetitive same brand set purchasing, despite 31
situational influences and marketing efforts having the potential to cause switching
behaviour (Oliver, 1999).
This study measured customer loyalty using a five-item scale adapted from Zeithaml
et al. (1996).
Brand image was used as a moderator variable for this study. Keller (1993) defined
brand image as a set of perceptions about a brand as reflected by the brand
associations held in consumer memory. However, a consensus and immutable
definition of brand image has not been established. We measured brand image using a
three-item scale adapted from Park et al. (1986), which covered functional benefits,
symbolic benefits, and experiential benefits. Functional needs refer to the intrinsic
features possessed by the product when consumers attempt to solve purchasing
decisions; symbolic needs are related to consumers’ self-concept and whether the
product could satisfy self-esteem needs; and experiential needs refer to issues of
stimulation, sensory pleasure, or novelty linked to products.

Control variables
We controlled for several variables to rule out alternative explanations. Past literature
has cited control variables like sex (male ¼ 1, female ¼ 0) (Ndubisi, 2006), age and
disposable income (Homburg and Giering, 2001), all of which we used. We also
included altruism, which refers to the behaviour of reducing personal consumption for
the sake of increasing others’ consumption. Altruism is generally seen as positive but
does not always denote self-sacrifice; instead it sometimes refers to a form of
benevolence toward others. This study defines altruism as a form of utilitarianism,
with the purpose of helping others or considering others’ welfare. Webb and Mohr
(1998) and Sallot (2002) both pointed out that altruism influences consumers’
judgments of PR and loyalty. This study measured altruism using a five-item scale
adapted from Webb and Mohr (1998). Coefficient a was 0.9278.

Reliability and validity

In order to test the validity and reliability of each concept, a three-step approach to data
analysis was adopted in this study:
(1) exploratory factor analysis;
(2) confirmatory factor analysis; and
(3) reliability analysis.

We first conducted an EFA, using principal component analysis with varimax rotation. A
factor loading of greater than or equal to 0.5 was used as the benchmark to include items in
a factor. The percentage of the variance explained for PRP was 63.404 per cent, that for
brand loyalty was 90.299 per cent, and that for brand image was 85.779 per cent (Table I).
MIP
Standardized Variancea
26,1 Mean SD loading t-Value (as)

PRP (developed by authors) 63.404

(0.9136)
Message release 4.24 1.45 0.57 * * * 11.64
32 Expenditure 4.15 1.27 0.67 * * * 13.21
PR activities (product-related) 4.25 1.36 0.79 * * * 17.20
Crisis management 4.26 1.44 0.82 * * * 18.45
Two-way communication 4.22 1.46 0.79 * * * 15.62
Sponsorship 4.31 1.39 0.86 * * * 19.99
Continuity 4.42 1.38 0.74 * * * 16.28
Important 4.49 1.41 0.77 * * * 16.21
Loyalty (Zeithaml et al., 1996) 90.299
(0.9735)
Repurchase 3.97 1.70 0.93 * * * 23.18
Say positive things 3.78 1.68 0.96 * * * 24.27
Recommend 3.65 1.77 0.96 * * * 23.55
Encourage 3.65 1.60 0.93 * * * 23.60
First choice 3.74 1.74 0.93 * * * 23.80
Image (Park et al., 1986) 85.779
(0.9170)
Functional benefit 4.24 1.58 0.90 * * * 21.13
Symbolic benefit 4.38 1.57 0.89 * * * 22.12
Experiential benefit 4.06 1.58 0.87 * * * 21.14
x 2(df) ¼ 268.231 (93); P , 0.001; x 2/df ¼ 2.884;
GFI ¼ 0.912; AGFI ¼ 0.871; CFI ¼ 0.972;
IFI ¼ 0.972; NFI ¼ 0.957; SRMR ¼ 0.053;
RMSEA ¼ 0.078
Table I.
Results of EFA and CFA Notes: *Denotes p , 0.05; * *p , 0.01; * * *p , 0.001; aPercentage of the total variance explained

In social science, it is common to consider a solution that accounts for 60 per cent of the
total variance as satisfactory (Hair et al., 1998). We then conducted a confirmatory factor
analysis (CFA) to determine the construct validity. In Table I, the chi-square [x 2
(df) ¼ 268.231(93), p , 0.001] was not satisfactory which was expected given the sample
size; other indices [GFI ¼ 0.912, RMSEA ¼ 0.072, x 2/df ¼ 2.884, AGFI ¼ 0.87,
NFI ¼ 0.96, CFI ¼ 0.97, IFI ¼ 0.97] indicated that the model fits the data reasonably
well. Convergent validity was assessed by examining the indicator loadings. Table I
shows that all standardized loading of the manifest variables on the indicators in the CFA
were significant ( p , 0.001). Thus, convergent validity was supported.
A common test of discriminant validity is determining by testing additional models
that constrain the association between two latent constructs to 1 and using a x 2 test of
the difference in fit between the model with the unconstrained association and the
model with the constrained association (Anderson and Gerbing, 1988; Chiou and
Droge, 2006; Smith and Barclay, 1997). Discriminant validity is inferred if the model
with the constrained association provides a significantly worse fit to the data than the
model with the unconstrained association; in all three cases, Dx21;0:05 . 3:84 and the
overall fit significantly decreased. Thus, discriminant validity was supported.
The reliability of multi-item scales was determined by computing Cronbach as. All PRP and
scales have acceptable a values ranging from 0.9136 to 0.9735 (Table I). customer loyalty
Analysis and results
We tested the hypotheses using hierarchical regression. As shown in Table II, in step 1,
four control variables, namely altruistic motives, gender, age, and disposable income,
were entered into the regression. Overall, the model accounted for 37.5 per cent of the 33
variance in customer loyalty. Altruistic motives and disposable income were
significantly related to customer loyalty (b ¼ 0.602 and 0.092, p , 0.05, respectively).
In step 2, the independent variable, PRP, was added to the regression, the overall
explanation power increased by 6.8 per cent. PRP has positive and significant
influences on customer loyalty (b ¼ 0.305, p , 0.01). This result supports H1 of this
study. This result indicates that the higher the level of consumer perception of an
organization’s dedication to PR activities, the more willing they are to purchase the
organization’s products and to recommend those products to friends and relatives.
H2 postulated that the impact of PRP is contingent on the level of brand image.
Brand image moderated the relation between PRP and customer loyalty. To test the
effect of the moderator variable on brand image, this study performed a split-group
analysis. The sample was initially arranged in ascending order of brand image but
split along the median to form two groups: favourable brand image and unfavourable
brand image (Hsieh and Hsieh, 2001).
Table III indicates that brand image moderated the relation between PRP and
customer loyalty. For the favourable brand image group (n ¼ 203), the standardized
regression coefficient was significant for PRP (b ¼ 0.231, p , 0.01, R 2 ¼ 0.133). But
for the unfavourable brand image group (n ¼ 164), the standardized coefficient for
PRP was not significant (b ¼ 0.151, p . 0.05, R 2 ¼ 0.122). Results indicate that only
the favourable brand image has a positive influence over customer loyalty, while the
unfavourable brand image has no significant influence. Therefore, H2 of this study is
also supported. This result demonstrates that the effect of PRP on customer loyalty
differs according to the acceptance level of brand images. Relative to organizations

Customer loyalty
Variable Step 1 Step 2

Control variables
Altruistic motives 0.602 * * * (14.42) 0.443 * * * (9.588)
Gender 20.016 (20.392) 2 0.016 (20.410)
Age 20.044 (20.954) 2 0.066 (21.504)
Disposable income 0.092 * (1.977) 0.083 (1.887)
Independent variable
Public relations perception 0.305 * * * (6.617)
F value 54.336 * * * 57.362 * * *
R2 0.375 0.443 Table II.
DR 2 0.068 Regression analysis of
the relationship between
Notes: *Denotes p , 0.05; * *p , 0.01; * * *p , 0.001. The regression coefficients are standardized PRP and customer
regression coefficients with t-value in parentheses loyalty
MIP with unfavourable brand images, in organizations with favourable brand images, the
26,1 PRP effect is more significant and greater.

Examining potential confounding factors

We further performed a t-test to explore the influence of differences in levels of trust
on consumer attitude and behaviour toward different brand images. According to
34 Table IV, means of altruistic motives, trust and customer loyalty are higher in
organizations with favourable brand images than in organizations with unfavourable
brand images and the t-values are all significant. This result implies that favourable
and unfavourable brand images have different degrees of influence on consumers’
cognitive power. Therefore, H2 of this study is again supported.

Discussion
This study contributes to helping to explain the influence of PRP on customer loyalty
by investigating whether attitudes towards brand image affect this relationship. It was
found that the effect of PRP on loyalty is stronger and more significant when brand
image is favourable.
In the first research problem, we find that PRP has a positive influence on customer
loyalty. However, whether PR is a form of strategic relationship management
(Ferguson, 1984) or a tactical publicity function is still under scholastic debate (Moss
et al., 1996). This study is interested in consumers’ perception of PR. Empirical results
indicate that the higher the consumers’ perception of PR, the higher the customer
loyalty. In today’s highly competitive and rapidly changing environment, how to

Variable Favourable brand image (N ¼ 203) Unfavourable brand image (N ¼ 164)

Altruistic motives 0.181 * (2.521) 0.244 * * (3.112)

Gender 2 0.078 (21.167) 0.020 (0.270)
Age 2 0.038 (20.491) 2 0.053 (20.655)
Disposable income 0.116 (1.481) 2 0.086 (21.064)
Public relations perception 0.231 * * (3.201) 0.151 (1.922)
R2 0.133 0.122
F value 6.020 * * * 4.405 * *
Table III.
Moderating effects Notes: *Denotes p , 0.05; * *p , 0.01; * * *p , 0.001. The regression coefficients are standardized
of brand image regression coefficients with t-value in parentheses

Altruistic motives Trust Customer loyalty

Favourable brand image 4.94 5.09 4.92

Unfavourable brand image 3.24 3.24 2.33
t-Value 213.834 * * * 217.522 * * * 2 24.832 * * *
Table IV.
t-Test results Notes: *Denotes p , 0.05; * *p , 0.01; * * *p , 0.001
maintain or even enhance consumer loyalty has become an important success indicator PRP and
for companies (Zeithaml et al., 1996). Empirical results of this study show that customer loyalty
company’s dedication to the practice of PR is worthwhile because PR can definitely
enhance customer loyalty.
In the second research problem, results indicate that the impact and effect of PRP on
customer loyalty varies according to the level of brand image acceptance. Fredericks
et al. (2001) suggested that understanding consumer needs has already transcended the 35
issues of products and services, and that the concept of image exploration is of growing
importance. Both corporate image and brand image could support or destroy
consumers’ beliefs about value gained, thereby indirectly influencing customer attitude
and behaviour (Abdullah et al., 2000). Hence, brand image may function as a precursor
or gatekeeper to more extensive ramifications. When brand image is favourable, this
positive impression would enhance the customers’ interest in PR information (Poisz,
1989), and consumers would tend towards a positive cognitive, attitude and behaviour
toward the company. So PR associated with favourable brand image has an increased
effect on customer loyalty with little extra effort.
Relatively, the negative impression associated with an unfavourable brand image
could lead to selective attention and distortion of PR information (Poisz, 1989).
Consumers might tend to display a negative attitude and behaviour toward the
company. Webb and Mohr (1998) noted that half of the respondents in their study had
negative attitudes toward companies engaged in PR activities and regarded a
company’s motives as egoistic. According to Table IV of this study, when brand image
is favourable, consumers are willing to believe companies’ PR motives are altruistic
(mean ¼ 4.94), on the contrary, companies with unfavourable image, consumer doubt
their altruistic motives (mean ¼ 3.24). Consumers adopt the attribution theory to
deduce the company’s motives, and this in turn influences the evaluation of PR
activities (Dean, 2002; Sallot, 2002), and further impacts on consumer loyalty. This
study extends Webb and Mohr’s research on the subject that, “Motives make a
difference in how people view public relations.”
From empirical results, we discovered that the level of brand image can influence
consumers’ trust in companies, which would in turn influence consumers’ inferences of
PR motives. Sen and Bhattacharya (2001) have stated that consumers believe that PR
has trade-off effects. This implies that PR prompts the redistribution of resources.
When brand image is unfavourable and company’s resources are limited, heavy
investment in PR efforts can reduce resources dedicated to product-related activities.
Since, PR activities cannot help raise product value, it is possible that consumers would
interpret companies as not attending to their proper duties. As a result, PR associated
with unfavourable brand image has a decreased effect on customer loyalty despite the
extra effort.
Grunig and Hunt (1984) regarded PR as a form of communication management, and
the management of brand image is a very important factor determining the success of
consumer communications (Kitchen, 1997). For the communication to be effective, trust
is particularly critical. However, unfavourable brand image would decrease the level of
consumer trust (Swan et al., 1999). As with the Philip Morris case, the company should
first establish more consumer trust because current consumers refuse to accept the
messages disseminated by the company through charity PR, and that attitude toward
the company is rooted in the company’s long-term history, politics, social behavioural
MIP performance, and product nature (Clark, 2000). PRP can boost the effect of company
26,1 messages but cannot change its essential value. After building consumer trust,
consumers lower their perceived risks and information uncertainty of companies
(Morgan and Hunt, 1994); the consumers feel satisfied about results of PR activity and
possess greater motivation to realise decisions, and this make communications more
effective. Moreover, regular and high-quality communication elevates consumer trust
36 of companies (Farrelly et al., 2003; Geyskens et al., 1998; Morgan and Hunt, 1994;
Sharma and Patterson, 1999). The mutual interaction can help accomplish the objective
of enhancing consumer loyalty (Garbarino and Johnson, 1999; Sirdeshmukh et al., 2002;
Swan et al., 1999).

Implications and limitations

This study has made several contributions to the literature. First, in this study we
measured PR from the consumer-oriented perspective. This is in contrast to “craft” PR
(Grunig and Grunig, 1992) which measures the effectiveness of PR from a
source-oriented perspective (Pinkleton and Austin, 1999). The shortcomings of this
approach are:
.
PR messages may not have influence on consumers’ knowledge; and
.
the influence of the messages might not be positive on consumer’s attitude or
behaviour.

Second, relationship marketing has been adopted extensively and enthusiastically in

“professional” PR (Grunig and Grunig, 1992) literature, but how PR programs affect
the quality of relationships is rarely discussed. This study found that customers’
overall perception of PR practice can enhance one of the relationship marketing
dimensions (namely trust) and influence customer loyalty, so the authors suggest the
co-existence of a tactical and strategic approach in PR practice. Third, this study could
enrich a body of literature in customer loyalty by adding to the small number of studies
examining moderators of the PR and customer loyalty.
Managerial implications for the practice of PR have emerged from the study. In
today’s globally competitive market, insurance companies have to seek ways to
enhance the company’s brand image and to gain customer loyalty. This study clearly
proves that customer loyalty is quantitatively and qualitatively influenced by PRP,
however the effect varies widely, and the halo effect of brand image appears to carry
over to the evaluation. When brand image is favourable, a company’s disseminated
messages have higher congruence with consumer cognitions so company objectives
are easier to accomplish. In contrast, when brand image is unfavourable, a
company’s messages differ greatly from consumer cognitions and consequently the
company’s objectives are more difficult to achieve. Although in general a company’s
investments in PR activities enhance company-consumer relationships, the motives
behind such dedication can prompt consumer scepticism and can reduce PR credibility.
Larsson (2007) found that the trust in PR agents is very low; therefore the trust to
company becomes an important factor for consumers in appraising PR motives (Sallot,
2002). Moreover, the establishment of a good brand image helps with building
consumers’ trust in evaluating company’s PR motives which are beneficial in elevating
future organization-public relationships and customer loyalty.
 Based on extant research about how to obtain a favourable brand image, it appears PRP and
that perceived positive quality may yield incremental benefits in brand evaluations. customer loyalty
Other research suggests that positive interactions and communication build
favourable image while unpleasant interactions lead to unfavourable image (Coombs
and Holladay, 2006). In conclusion, the results imply that PR alone is not enough to
generate customer loyalty thus brand image should be managed more carefully to
produce desired results. 37
Some limitations of this research should be mentioned. First, an issue to be resolved
is the need for replicating the PRP scale among consumers in different industries and
countries in order to confirm the validity of the concept used in this research and refine
its measurement. Second, we unintentionally discovered that the relationship between
PRP and customer loyalty may be nonlinear. This nonlinear relationship, which in our
results demonstrates a positive correlation but a decreasing trend, is a good subject for
future research. Third, we adopted a cross-sectional approach in our study. However,
due to the dynamic nature of the studied relationships, using a longitudinal method to
analyze and clarify the relationships among the three variables would be an approach
that merits further examination. Fourth, further research is encouraged to identify the
key driving force of PR as it relates to relationship marketing as well as company
performance.
In summary, the impact of PRP on customer loyalty is undisputed. Ideally, through
PR, companies can demonstrate altruistic and non profit-oriented objectives, indicate
sincere concern for consumer benefits, and establish consumer trust in order to
enhance customer loyalty. Nonetheless, we have shown that the impact of PRP on
customer loyalty is moderated by brand image and that that impact can have varying
effects. Thus, when consumers perceive an organizations’ brand image as
unfavourable, companies should focus on implementing strategies aimed at
enhancing their brand image to capture the complete trust from customers. Keller
(1999) suggested that we can accomplish this through brand reinforcement or
revitalisation strategies. Only after implementing those measures, should companies
engage in PR activities to deliver timely and adequate messages to raise consumer’s
loyalty. By doing things in this order, companies can achieve “the multiplying effect of
yielding double the results with half the efforts” according to a Chinese old proverb; as
Cone et al. (2003) noted, “PR is a way of making a strong brand even stronger, but it can
never turn a brand into something it’s not.”

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New York, NY.

Appendix
Public relations perception (strongly disagree/strongly agree)
.
The messages about the company’s PR I obtain from the media are more than other
competitive brands.
.
I feel that the amount of money input by the company’s PR activity is more than other
competitive brands.
.
I feel that the company often holds PR activities to enhance consumers’ understanding
about the company/products.
.
I feel that the company would deal with emerging issues timely and sincerely.
. I feel that the company would handle consumers’ comment timely and sincerely.
.
I feel that the company is involved in sponsorship activities, such as charity, sports
sponsorship, art sponsorship, and schools sponsorship.
.
I feel that the company continuously engages in PR activities.
.
I feel that company places high importance on PR activities.
MIP Customer loyalty (strongly disagree/strongly agree)
26,1 .
I will purchase that company’s insurance product in the future.
.
I will say positive things about this company when I talk to my friends or relatives about
insurance.
.
I will recommend this company to my friends or relatives when they need the related
information.
42 .
I will encourage my good friends or relatives to purchase that company’s products.
.
That company’s product will be my first choice when I need to buy any insurance product.

Brand image (strongly disagree/strongly agree)

.
I feel that A company branding product possesses its practical function.
.
I feel that A company branding product possesses a positive symbolic meaning.
.
I feel that A company branding product can relate to the pleasant experience.

Altruistic motives (strongly disagree/strongly agree)

.
I feel that the motivation of the company to engage in PR is to implement social
responsibilities.
.
I feel that the motivation of the company to engage in PR is to give feedback.
.
I feel that the motivation of the company to engage in PR is to help others.

Corresponding author
Chung-Kai Li can be contacted at: ltcthi39@mail.ltu.edu.tw

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