Expert answer:The Effect of Brand Equity on Customer Satisfactio

Expert answer:Regarding Tanveer and Lodhi (2016) article “The Effect of Brand Equity on Customer Satisfaction: An Empirical Study Based on David Aaker;s Brand Equite Model” List the hypotheses found in the article.Analyze the hypotheses, making sure to specify the independent and dependent variables.State the level of significance required.Discuss the stated statistical assumptions and limitations.The following brainstorming questions may be useful as you write your post:Are the variables clearly identified and labeled?Are the hypotheses in null and alternative formats?What statistical assumptions or limitations are discussed?Are visual displays of data provided?What additional strengths and weaknesses can you identify?
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The Effect of Brand Equity on Customer
Satisfaction: An Empirical Study
Based on David Aaker’s Brand Equity Model
Zoyia Tanveer* and Rab Nawaz Lodhi**
Building brand equity in this competitive environment is a very challenging and difficult task. Companies
are now focused on meeting customers’ imminent desires by providing appropriate experiences. This study
explores the association between brand equity dimensions, overall brand equity and customer satisfaction
based on David Aaker’s brand equity model, in the context of branded shoes market in Pakistan. The
data obtained from 75 respondents through a survey was analyzed using multiple regression analysis. The
results establish significant association between three dimensions of brand equity, customer satisfaction
and overall brand equity.
Introduction
The concept of brand equity was brought to light initially in the late 1980s. Brand equity
is an intangible asset which creates an association between the brand and its consumers.
Brand equity can be viewed from three perspectives—financial, brand extension and the
consumer. In this research, we focus on the consumer perspective. According to Keller
(2003), “the power of a brand lies in what customers have learned, felt, seen, and heard
about the brand as a result of their experiences over time.” One way of knowing how
customers are familiar with the brand is through brand equity. According to David Aaker,
brand equity has four dimensions—brand loyalty, brand awareness, brand association and
perceived quality. He states that “brand equity helps the customer to interpret and process
information about the product, and also affects the customer’s confidence in the purchase
decision and the quality of user experience.”
The branded shoes market in Pakistan is facing a challenging environment due to
growing competition and increasing number of brands. A large number of branded shoes
are competing in the market, and customers are showing increasing preference for branded
shoes. Companies are therefore more focused on establishing a strong brand identity for
their products in order to attract customers and build customer satisfaction. Brand equity
research plays a vital role in helping brand managers to build brand equity and gain
competitive advantage. This research studies the association between brand equity
dimensions, overall brand equity and customer satisfaction.
*
MS Scholar, Institute of Business & Management (IB & M), University of Engineering & Technology (UET),
Lahore, Pakistan; and is the corresponding author. E-mail: zoyiatanveer606@gmail.com
* * Assistant Professor, Institute of Business & Management (IB&M), University of Engineering & Technology
(UET), Lahore, Pakistan; and International Certified Licensed Trainer, NVivo Qualitative Research, QSR
International Pty Limited, Melbourne, Australia. E-mail: rabnawazlodhi@uet.edu.p
©
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Rights
Reserved.
The2016
Effect
Brand
Equity
on Customer Satisfaction: An Empirical Study
Based on David Aaker’s Brand Equity Model
43
Literature Review
Brand Equity
Many researchers like Kotler, Keller and Aaker have provided definitions and models about
brand equity. David Aaker was the first to introduce the concept of brand equity (during
the 1980s). Aaker (1991) described brand equity as “a set of brand assets and liabilities
linked to a brand, its name and symbol that add to or subtract from the value provided
by a product or service.”
Farquhar (1989) stated that we can generate brand equity by ‘adding value’ to the
product. Keller (1993) introduced the customer-based brand equity model. He defined
brand equity as “the differential effect of brand knowledge on consumer response to the
marketing of the brand” and highlighted four steps to build and manage a brand. Kapferer
(1992) came up with the brand identity prism. Yoo et al. (2000) described brand equity as
“the difference in consumer choice between the focal branded product and an unbranded
product, given the same level of product features.” In conclusion, all the researchers agreed
that added value can generate brand equity by enhancing consumer association and
perception about a particular brand.
According to Liaogang et al. (2007), generating brand equity and managing it is an
important issue for the companies. Generating brand equity helps the companies in
product differentiation and getting competitive advantage. According to Park and
Srinivasan (1994), “brand equity is incremental utility and value endowed to a product
or service by its brand name.” According to Chen and Tseng (2010), “it is considered as
a source of competitive advantage by many firms.”
Customer Satisfaction
According to Howard and Sheth (1969), satisfaction is “the buyer’s cognitive state of
being adequately or inadequately rewarded for the sacrifices he has undergone.” Oliver
(1981) describes customer satisfaction as “the summary psychological state resulting when
the emotion surrounding disconfirmed expectations is coupled with the consumer’s prior
feelings about the consumption experience.” Vavra (1997) defined customer satisfaction
as “a satisfactory post-purchase experience with a product or service given an existing
purchase expectation.” According to these studies, customer satisfaction increases the
purchase intent.
Hypotheses Development
Brand Loyalty and Brand Equity
Sheth and Park (1974) concluded that loyalty has three dimensions. The first one is
emotive dimension, which includes fear, respect and obedience. The second is evaluation
dimension, which is based on basic usage benefits assessment. The third one is behavioral
dimension. According to this theory, rational customers exhibit loyalty. According to
Solomon (1992), the buying decision towards a product turns into a habit (loyalty) as a
44
The IUP Journal of Brand Management, Vol. XIII, No. 3, 2016
result of brand equity. Assael (1998) and Oliver (1999) describe brand loyalty as the
situation wherein “consumers have deep commitment to re-buy and satisfy their past
experiences with the use of the same brand and incur repurchase behavior.” Aaker (1991)
states that brand loyalty “symbolizes a constructive mindset toward a brand leading to
constant purchasing of the brand over time.”
Based on the above discussion, the following hypothesis is formulated:
H1: Brand loyalty has substantial impact on brand equity.
Perceived Quality and Brand Equity
Perceived quality is positively related to brand equity and is identified as one of its
dimensions (Aaker, 1991; Kamakura and Russell, 1993; Feldwick, 1996; Motameni and
Shahrokhi, 1998; and Yoo et al., 2000). Aaker (1991) defined perceived quality as
“consumer’s perception of the overall quality or superiority of a product or service with
respect to its intended purpose, relative to alternatives.” Boulding et al. (1993) claimed
that “quality is directly influenced by perception.” Perceived quality has deep impact on
decision making for purchasing. If the perceived quality among customers increases after
using the product or service, then purchase intension will also increase (Rust and Oliver,
1994). According to Grunert et al. (2001) perceived quality is defined as “the estimation
made by the consumer relying on the whole set of basic as well as outer dimension of the
product or service.” Therefore, the following hypothesis is framed:
H2: Perceived quality has substantial impact on brand equity.
Brand Awareness and Brand Equity
Awareness is a key determinant in the brand equity model (Aaker, 1991; Kapferer, 1992;
and Keller 1993). According to Farquhar (1989) awareness is the accessibility aspect of
brand equity, which relates to “how quickly a consumer can retrieve brand elements stored
in his/her memory.” According to Keller (1993), “brand awareness affects consumer
decision making by influencing the formation and strength of brand associations in the
brand image.” Considering these aspects, the following hypothesis is formulated:
H3: Brand awareness has substantial impact on brand equity.
Brand Association and Brand Equity
According to Aaker (1991), brand association is the foundation for purchase decision.
Brand association represents customer’s thoughts, feelings, association, images and
experiences. Cheng (2001) identifies two types of association. The first one is product
association and the second is organizational association. If a brand does not perform its
function properly, then it will have low brand equity. While customers evaluate a brand,
they do focus on brand attributes (Lassar et al., 1995; and Pitta and Prevel, 1995). Bridges
et al. (2000) state that “positive associations help to strengthen the brand and the equity
that is carried into a leverage situation if affected by the types association made with the
brand”. Therefore, the following hypothesis is formulated:
The Effect of Brand Equity on Customer Satisfaction: An Empirical Study
Based on David Aaker’s Brand Equity Model
45
H4: Brand association has substantial impact on brand equity.
Overall Impact of Brand Equity on Customer Satisfaction
According to Keller and Lehman (2006), customer satisfaction increases the willingness
to pay for the product or service and also increases brand loyalty. According to Chen and
Tseng (2010), strong brand boosts customer’s trust for purchasing a product. Researches
prove that there is substantial relationship between brand equity and customer
satisfaction. Based on the above discussion, the following hypothesis is formulated:
H5: Brand equity has substantial impact on customer satisfaction.
The conceptual model arrived at from the five hypotheses formulated so far, is depicted
in Figure 1.
Figure 1: Conceptual Model
Brand
Loyalty
Perceived
Quality
H1
Brand
Equity
H2
H5
Customer
Satisfaction
H3
Brand
Awareness
H4
Brand
Association
Data and Methodology
The target population for this study was mainly professionals in Pakistan, because they are
more brand-conscious. A sample size of 87 was identified for this study, and usable data
was obtained from 75 respondents. Aaker’s (1991) brand equity model is used in this study.
The dimensions of this brand equity model are—brand loyalty, brand association, brand
awareness and perceived quality. Closed format questions were used to collect the
responses (see Appendix for questionnaire).
Results and Discussion
Demographic Analysis
The demographic profile of respondents is summarized in Table 1. There were more female
respondents (55%) than male respondents (45%). Further, a majority of the respondents
(55%) were in the age group of 36 to 45 years. Almost half the respondents were graduates
46
The IUP Journal of Brand Management, Vol. XIII, No. 3, 2016
Table 1: Demographic Profile of Respondents
Variable
Gender
Category
Frequency
Percentage
Male
34
45.3
Female
41
54.7
7
9.3
26-35
8
10.7
36-45
41
54.7
46 and Above
19
25.3
5
6.7
Graduate
37
49.3
Postgraduate
31
41.3
2
2.7
11
14.7
18-25
Age (in years)
High School
Education Level
Doctorate
Student
Occupation
Annual Income
(PKR)
Marital Status
Government Sector
6
8.0
Private Sector
49
65.3
Self Employed
9
12.0
Up to 3 lakh
31
41.3
3-6 lakh
35
46.7
6-9 lakh
8
10.7
9-12 lakh
1
1.3
Married
33
44.0
Single
42
56.0
(49%), followed closely by postgraduates (41%). Nearly two-thirds of the respondents were
employed in the private sector (65%). 88% of the respondents had an annual income of
less than 6 lakh per annum, and lastly, 56% of the respondents were single and 44% were
married.
Reliability
Cronbach’s alpha was used to measure reliability of the scale used in this study. While the
acceptable value for reliability should be greater than 0.7, a Cronbach’s alpha of 0.909 was
obtained for the 26-item scale used here. This shows that the data is reliable and
consistent.
Regression Analysis
Regression analysis was done to test the hypotheses. Table 2 provides the findings of
regression analysis. The results reveal a significant relationship of brand awareness, brand
The Effect of Brand Equity on Customer Satisfaction: An Empirical Study
Based on David Aaker’s Brand Equity Model
47
association and perceived quality with brand equity. Further, there also exists a significant
relationship between brand equity and customer satisfaction. The beta coefficients ( )
shows the intensity of impact the dimensions of brand equity have on overall brand equity,
and the impact of brand equity on customer satisfaction. Based on the findings presented
in Table 2, the hypotheses from H2 to H5 are accepted.
Table 2: Regression Results
Hypothesis
Beta Coefficient ( )
Sig.
Durbin-Watson
H1
0.017
0.886
2.270
0.144
H2
0.475
0.000
2.268
4.614
H3
0.496
0.000
2.329
4.883
H4
0.708
0.000
2.122
8.557
H5
0.952
0.000
1.898
26.622
t-Value
Note: t-value should be greater than 1.96; the significance values should be less than 0.05 (p < 0.05); Durbin-Watson statistic of around 2 or more indicates there is no autocorrelation. Conclusion Marketers of branded shoes in Pakistan are facing challenges due to brand conscious environment and increasing competition in the market. The aim of this research was to verify the applicability of David Aaker’s brand equity model in this context. This study confirms that in the context of the branded shoes market in Pakistan, the three dimensions—perceived quality, brand awareness and brand association—have a positive impact on brand equity, which in turn has a positive impact on customer satisfaction. The coefficient is highest for overall brand equity (0.952), indicating that brand equity has a strong influence on customer satisfaction. Among the dimensions of brand equity, brand association ( = 0.708) has the strongest impact on brand equity, followed by brand awareness ( = 0.496) and perceived quality ( = 0.475). The implication is that marketers should increase overall brand equity, and in particular focus on brand association, brand awareness and perceived quality in order to increase customer satisfaction. The limitations of this research is that it is confined to a single country, Pakistan and deals with only one product, branded shoes. Wider applicability can be explored by conducting the study taking other countries into consideration and for different product categories. References 1. Aaker D A (1991), Managing Brand Equity: Capitalizing on the Value of a Brand Name, The Free Press, NY. 2. Assael H (1998), Customer Behavior and Marketing Action, Cincinnati, South-Western College Publication, Ohio. 48 The IUP Journal of Brand Management, Vol. XIII, No. 3, 2016 3. Boulding W, Kalra A, Staelin R and Zeithaml V A (1993), “A Dynamic Process Model of Service Quality: From Expectations to Behavioral Intentions”, Journal of Marketing Research, Vol. 30, No. 1, p. 7. 4. Bridges S, Keller K L and Sood S (2000), “Communication Strategies for Brand Extensions: Enhancing Perceived Fit by Establishing Explanatory Links”, Journal of Advertising, Vol. 29, Winter, pp. 1-11. 5. Chen C F and Tseng W S (2010), “Exploring Customer-Based Airline Brand Equity: Evidence from Taiwan”, Transportation Journal, pp. 24-34. 6. Cheng-Hsui Chen A (2001), “Using Free Association to Examine the Relationship between the Characteristics of Brand Associations and Brand Equity”, Journal of Product & Brand Management, Vol. 10, No. 7, pp. 439-451. 7. Farquhar P H (1989), “Managing Brand Equity”, Journal of Marketing Research, Vol. 1, pp. 24-33. 8. Feldwick P (1996), “What is Brand Equity Anyway, and How Do You Measure It?”, Journal of the Market Research Society, Vol. 38, No. 2, pp. 85-105. 9. Grunert K G, Lähteenmäki L, Nielsen N A et al. (2001), “Consumer Perceptions of Food Products Involving Genetic Modification — Results from a Qualitative Study in Four Nordic Countries”, Food Quality and Preference, Vol. 12, No. 8, pp. 527-542. 10. Howard J A and Sheth J N (1969), The Theory of Buyer Behavior, Vol. 14, Wiley, New York. 11. Kamakura W A and Russell G J (1993), “Measuring Brand Value with Scanner Data”, International Journal of Research in Marketing, Vol. 10, No. 1, pp. 9-22. 12. Kapferer J N (1992), Strategic Brand Management, Kogan Page, London. 13. Keller K L (1993), “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity”, The Journal of Marketing, Vol. 57, No. 1, pp. 1-22. 14. Keller K L (2003), Strategic Brand Management: Building, Measuring and Managing Brand Equity, 2nd Edition, Prentice-Hall, Englewood Cliffs, NJ. 15. Keller K L and Lehmann D R (2006), “Brands and Branding: Research Findings and Future Priorities”, Marketing Science, Vol. 25, No. 6, pp. 740-759. 16. Lassar W, Mittal B and Sharma A (1995), “Measuring Customer-Based Brand Equity”, Journal of Consumer Marketing, Vol. 12, No. 4, pp. 11-19. 17. Liaogang H, Chongyan G and Zian L (2007), “Customer-Based Brand Equity and Improvement Strategy for Mobile Phone Brands: Foreign versus Local in the Chinese Market”, International Management Review, Vol. 3, No. 3, p. 76. 18. Motameni R and Shahrokhi M (1998), “Brand Equity Valuation: A Global Perspective”, Journal of Product & Brand Management, Vol. 7, No. 4, pp. 275-290. The Effect of Brand Equity on Customer Satisfaction: An Empirical Study Based on David Aaker’s Brand Equity Model 49 19. Oliver R L (1981), “Measurement and Evaluation of Satisfaction Processes in Retail Settings”, Journal of Retailing. 20. Oliver R L (1999), “Whence Consumer Loyalty?”, The Journal of Marketing, Vol. 63, Special Issue, pp. 33-44. 21. Park C S and Srinivasan V (1994), “A Survey-Based Method for Measuring and Understanding Brand Equity and its Extendibility”, Journal of Marketing Research, pp. 271-288. 22. Pitta D A and Prevel Katsanis L (1995), “Understanding Brand Equity for Successful Brand Extension”, Journal of Consumer Marketing, Vol. 12, No. 4, pp. 51-64. 23. Rust R T and Oliver R W (1994), “The Death of Advertising”, Journal of Advertising, Vol. 23, No. 4, pp. 71-77. 24. Sheth J N and Park C W (1974), A Theory of Multidimensional Brand Loyalty, College of Commerce and Business Administration, University of Illinois, Urbana Champaign. 25. Solomon M R (1992), Consumer Behavior: Buying, Having and Being, Allyn and Bacon, Boston. 26. Vavra T G (1997), Improving Your Measurement of Customer Satisfaction: A Guide to Creating, Conducting, Analyzing, and Reporting Customer Satisfaction Measurement Programs, ASQ Quality Press. 27. Yoo B, Donthu N and Lee S (2000), “An Examination of Selected Marketing Mix Elements and Brand Equity”, Journal of the Academy of Marketing Science, Vol. 28, No. 2, pp. 195-211. 28. Zeithaml V A (1988), “Consumer Perceptions of Price, Quality and Value: A MeansEnd Model and Synthesis of Evidence”, Journal of Marketing, Vol. 52, No. 3, pp. 2-22. 50 The IUP Journal of Brand Management, Vol. XIII, No. 3, 2016 Appendix Questionnaire 1. Gender: Male Female 2. Age: 18-25 years 26-35 years 36-45 years 46 years and above 3. Education Level: High School Graduate Postgraduate Doctorate 4. Occupation: Student Government Sector Private Sector Self-Employed 5. Annual Income (PKR): Up to 3 lakh 3-6 lakh 6-9 lakh 9-12 lakh 6. Marital Status: Single Married 7. Which brand of shoes are you purchasing: _________ Brand Loyalty: 1) I intend to buy other products of this brand. Strongly agree Agree Neutral Disagree Strongly disagree 2) I say positive things about this brand to other people. Strongly agree Agree Neutral Disagree Strongly disagree 3) I have or would recommend it to other people or someone who seeks my advice. Strongly agree Agree Neutral Disagree Strongly disagree The Effect of Brand Equity on Customer Satisfaction: An Empirical Study Based on David Aaker’s Brand Equity Model ... Purchase answer to see full attachment

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