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Enrique Private Label Travel Agency
Enrique Private Label Travel Agency
ABSTRACT
In the travel industry, electronic word of mouth (eWOM) elicits a major influence on consumers’
decision making. Travel retailers are facing the new challenges derived from the different nature of
their competitors—big hypermarkets, for instance, are extending their brands to travel
services—and the challenges derived from online comments that consumers have access to. With a
sample of 263 tourists, and using a fuzzy-set qualitative comparative analysis data analysis, this
paper shows how the selection between a specialized travel agency and a private label (PL) agency is
influenced by five factors: the usefulness attached to online reviews by users and the valence of those
online reviews, attitude and experience with PL, and the individual’s value consciousness. The
contribution of this paper not only comes from the novelty of considering PL in the context of travel
agencies, but also from using a relatively novel data analysis approach useful for analyzing
management issues. © 2016 Wiley Periodicals, Inc.
Electronic word of mouth (eWOM) is playing an in- Retailing is then facing new challenges arisen from
creasing role as an information source that affects con- online selling and PL extension. PLs brand extension is
sumers’ attitudes and choices. Companies are becom- at present one of the growth strategies used by GRs—
ing more conscious about the need of paying attention especially hypermarkets—who are trying to take profit
to the digital part of their businesses in order to of PL equity by increasing the number of product cat-
aim higher revenues and more profitability (McKinsey, egories in which their PL is present. GRs extend their
2015). With this in mind, general retailers (GR) are us- PL to a new category presuming that customers who
ing social media as a tool to reinforce their relationships have experience and are loyal to their parent brand
with their customers (Rapp, Beitelspacher, Grewal, & will also buy their extended brand (Miquel, Caplliure,
Hughes, 2013). Consequently, there has recently been & Adame, 2014; Reast, 2005). In this regard, some GRs
a bundle of meta-analysis papers studying the effect are expanding their PL strategy to travel services, such
of eWOM on sales (You, Vadakkepatt, & Joshi, 2015). as Carrefour or Sears. While there is a large amount of
Along with these studies, we can also find more specific academic research on the determinants of the success
meta-analysis papers focused on the effects of online or failure of PL in fast moving products, there is a lack
reviews on retail sales (Floyd, Freling, Alhoqail, Cho, of literature about PL in travel services. Indeed, PL
& Freling, 2014), which also analyze the effects of the foray into this industry has been relatively new, as the
role of valence in online reviews on perceived useful- research of Global Powers of Retailing 2015 (Deloitte,
ness and attitudes toward the product (Purnawirawan, 2015) has proved by reviewing the services offered by
Eisend, De Pelsmacker, & Dens, 2015). the first 10 worldwide hypermarket groups.
Tourism has experienced a dynamic change due to Our aim is to analyze the influence of online reviews,
two main factors: the shift into online services and a the consumer’s attitude toward PL, their experience
more extensive use of the online comments. In this sce- with PL, and the effects of individual’s value conscious-
nario, specialized travel retailers (STR; online and of- ness (a determinant factor influencing store selection
fline travel agencies) are competing with private label and product purchase decisions—Swait & Sweeney,
(PL1 ) entrants and new online players that are power- 2000) on booking the services offered by a PL travel
fully emerging into two main areas: online aggregators, agency over a specialized (online or offline) one. Our
such as Kayak, and online review platforms, such as specific goals are as follows: (i) to identify the useful-
TripAdvisor. ness of online reviews to tourists when they choose a
specific travel agency, (ii) to evaluate the valence ef-
fect of online reviews on switching from an STR into a
1
PLMA (2015) defines PL products as those that encompass all mer- PL travel agency, (iii) to expand the role of the usual
chandise sold under a retailer’s brand. variables—identified in literature as determinants of
Income Income
1100–2100€ 2101–3000€ +3000€ 1100–2100€ 2101–3000€ +3000€
30.4% 35.4% 34.3% 23.2% 48.8% 28.0%
experiment that contained two different scenarios. Par- Table 2. Scales Used.
ticipants were randomly assigned one of the two sce- Construct Source
narios using the conditional branching function of the
online panel. First, and for both scenarios, each subject Perceived usefulness of Rapp et al. (2013)
was presented on a screen that showed an online ag- online reviews
General attitude toward PL Burton et al. (1998)
gregator’s review page, which included an all-inclusive
PL experience Dick, Jain, & Richardson
package holidays of seven days in Cozumel. The screen (1995)
showed two offers at the same price; one of them was Value consciousness Lichtenstein et al. (1993)
offered by an STR (labeled as traditional travel agency)
and the other one was offered by a PL travel agency (la-
beled as Travel agency of your habitual hypermarket).
The individuals had to choose which travel agency they technique, it is possible to avoid some weaknesses of
would book. After that, half of the sample read a posi- SEM, traditionally used to measure relationships be-
tive comment about the PL travel agency, and the other tween the variables considered in this research, which
half read a negative comment about the STR. Since we is based on symmetric relationships and fails to rec-
were aiming to measure the influence of online com- ognize the occurrence of causal asymmetry (Woodside,
ments on PL, negative comments of a PL and positive 2016).
comments of STRs were discarded. After reading the The key stage of fsQCA is to transform variables
online comment, individuals were presented with both into calibrated sets using at least three substantively
of the initial offers and were asked to choose between meaningful thresholds: full membership (1), full non-
them. membership (0), and a cross-over point (i.e., the point
As both comments favored the PL travel agency, our of maximum ambiguity—0.5; Ragin, 2008). For four of
real interest lied in those individuals who had chosen the five causal conditions considered in the analysis—
the STRs in the first place, before reading the review. perceived usefulness of comments, value consciousness,
In this way, we could analyze whether or not the online attitude toward PL, and experience with PL—the cur-
comment, together with the rest of the considered vari- rent study has used the three-value scheme mentioned
ables, influenced the tourists’ choice. Of all the partic- above, considering the median value of each causal con-
ipants sampled (303 individuals), 263 had chosen the dition as the point of maximum ambiguity. For the
STR in the first place. After reading the online com- causal condition related to the type of review, this study
ment, only 31.18% of those 263 participants switched has only considered value 0 (negative comment about
to the PL travel agency (Table 1 describes sample char- the STR) and value 1 (positive comment about the PL
acterization). travel agency).
The scales used in the questionnaire were taken
from previous studies and adapted for our purposes
(Table 2). All construct measures were 7-point Likert
KEY FINDINGS
scales (1 = strongly agree and 7 = strongly disagree);
however, we used a single item to measure which travel
agency the individuals were going to choose. The first step to verify whether the data support or re-
fute our propositions is to check if the causal conditions
are necessary for the outcome to occur. For the outcome
Analysis: fsQCA Method variable Change, the values of consistency and coverage
for each of the five causal conditions are less than the
The data analysis method used in this study is the minimum values set by Ragin (2006). This finding im-
fsQCA, a set-theoretic analysis technique that analyzes plies that those variables are not a necessary condition
in detail how causal conditions lead to a particular for tourists to switch from STRs into PL travel agencies.
outcome (for details, see Ragin, 2008). Through this Despite this finding, calculating the truth table allows
us to calculate the sufficiency of the causal conditions comments, negative online comments play a more im-
or configurations. As in the analysis of the necessary portant role than positive comments. In our study, a
conditions, none of the values for raw coverage, unique positive online comment about a PL travel agency is
coverage, consistency of the causal conditions, and cov- only present in one of the solutions (solution 8), whereas
erage/consistency of the set of solutions yielded by the the negative online comment about an STR appears in
program are relevant. This finding reveals that there five solutions (solutions 1, 2, 3, 6, and 7). Proposition 2 is
isn’t a relationship between the presence of causal con- then supported, although both valences have not equal
ditions (the five variables under analysis) and presence relevance. Data suggest contrary results to what is ex-
of the outcome (a change in the tourists’ choice). pected; even after reading a negative comment about
Given the nature of these results, the fsQCA philos- the company, the consumer remains loyal to the com-
ophy advocates for analyzing whether the absence of pany, and the other way round: even after reading a
causal conditions may result in the absence of the out- positive comment about the competitor’s performance,
come. Thus, the next stage of the analysis explores the the individual does not choose it. Third, with regard to
relationship between the absence of the outcome (i.e., the perceived usefulness of online reviews, Proposition
making the same decision of choosing STRs even after 3 is supported, since the absence of perceived useful-
reading an online comment) and the presence and/or ness, together with other causal conditions, result in
absence of all the causal conditions. the same decision making (solutions 4–6). This finding
For this set of causal conditions, once again, no suggests that the content of online comments is critical
causal conditions are necessary for the tourists’ deci- in order to perceive them as useful in choice behavior.
sion making when they keep choosing an STR after Fourth, experience and attitude toward PL—relevant
reading an online comment. Focusing on the absence in the purchase of other PL product categories—are
of the outcome, the second analysis phase consists in also relevant when using the services of travel agencies
analyzing the sufficient conditions. According to Ragin (Propositions 4 and 5 are accepted, since one or other
(2000), the absence of a causal condition is sufficient to causal condition is present in seven out of eight solu-
lead to the absence of the outcome, provided that the tions). Fifth, the presence of value consciousness in an
fuzzy membership value of the absence of causal condi- individual interacts with online comments (solutions 7
tion X is less than the fuzzy membership value of the and 8). So, Proposition 6 is supported. It is relevant to
absence of outcome Y (Ragin, 2000). Consistent with note that the opposite is not always true: for individu-
Ragin’s (2000) suggestion, Table 3 shows the interme- als who are not value-conscious online comments may
diate solution. play a role (solution 1) or not (solution 5). This result
All causal paths consist of causal configurations highlights the occurrence of causal asymmetry not con-
(Table 3) and are empirically important because their sidered by other methodologies traditionally used for
unique coverage is greater than 0. Raw coverage is analyzing the topic.
important when assessing empirical evidence (Ragin, According to data, tourists will not change their ini-
2006). Table 3 also shows that eight causal paths ac- tial choice and will remain loyal to STRs after reading
count for 56% of the outcome set. This figure shows the a negative online comment related to the performance
importance of all joint causal paths (total coverage). of that travel agency, given that although they have
This study concludes five main findings. First, on- experience with PL, they do not have a positive atti-
line comments do not always play a role in changing tude toward it, or vice versa, they do not have experi-
tourists’ choice toward PL (in solutions 4 and 5, online ence with PL, although they have a positive attitude
comments do not play any role). Thus, Proposition 1 toward it (solutions 2 and 3). Likewise, consumers are
is not supported. Second, as for the valence of online not value-conscious individuals (solution 1) or, if they