The Role of Physical Environment in Forming Brand Prestige, Brand Preference, and Word-of-Mouth in the Fine Dining Restaurant Segment

Although existing studies recommend that brand prestige plays a leading role in the fine dining restaurant industry, little research to date focuses on brand prestige. Therefore, this study examined antecedents and consequences of brand prestige in the fine dining restaurant industry. More specifically, this study proposed that four types of physical environment (e.g., ambient conditions, facility aesthetics, spatial layout, and seating comfort) have a positive effect on brand prestige. In addition, this study hypothesized that brand prestige forms brand preference, which in turn influences word-of-mouth. Based on existing literature review, a theoretical model was proposed, and then tested with data collected from 293 fine dining restaurant patrons. A confirmatory factor analysis (CFA) and structural equation modeling (SEM) procedure were conducted by using AMOS. The empirical results of the SEM model showed that ambient conditions and facility aesthetics had significant effects on brand prestige. In addition, there were significant relationships between brand prestige and brand preference as well as word-of-mouth. Lastly, brand preference had a direct effect on word-of-mouth. Based on these findings, managerial and theoretical implications are discussed in the last part of this paper. We expect that fine dining restaurant managers who familiarize themselves with these study findings will be in a better position to understand the important role of brand prestige.