Proceedings of 5th Annual American Business Research Conference

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Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Determinants of Brand Credibility in Telecom Sector
Sarwat Afzal, Aamir Khan Chandio and Bais Ali Ghumro
Factors affecting the customer satisfaction have greater
importance in order to know the reasons behind the brand
credibility. Customers are satisfied when needs, wants and desires
are being fulfilled by any brand then customers believe in that
brand and so that the particular brand will perform according to
expectations. The purpose of this research is to know the
determinants of brand credibility in telecom sector just like celebrity
endorsement, perceived risk, trust and service quality and the
impact of these determinants on brand credibility. In this research
study these factors will be identified through literature review.
These factors create positive image in the minds of customers and
ultimately customers preferences towards that particular brand
increases. For this research, population will be all telecom users so
convenience sampling technique will be used and sample will be
off 200 respondents who use any telecom network. Data will be
collected through questionnaire and following the data collection, it
will be analyzed through SPSS software.
Keywords: Brand Credibility, Celebrity Endorsement, Perceived Risk,
Trust and Service Quality.
Introduction
Brand credibility is the phenomenon which is used to measure the believability of the
customer towards particular brand. This study will examine the factors which affects the
brand credibility. Data will be collected through Questionnaire by using convenience
sampling technique. Following the data collection, the study will identify the factors that
cause consumers towards a good perception for a brand means for brand credibility.
Background of the study
Service is a holistic process which provides the spotlight to the internal relationship
between the service provider company and the employees and also in external
relationship between the consumers and service provider (Riley and Chernatony, 2000).
Just against the products intrinsic properties of services include intangibility,
inseparability, heterogeneity, possession and perish ability (Mortimer, 2002).
Intangibility property of service refers to the extent at which a product or service cannot
give unambiguous and real image (McDougall and Snetsinger, (1990) which is
positively connected to doubt or uncertainty (Mitchell and Greatorex, 1993; Murray and
Sarwat Afzal, Asst. Professor, Marketing, Department of Management Sciences, SZABIST Larkana, Pakistan
Email : [email protected]
Aamir Khan Chandio, Research Fellow, SZABIST Islamabad, Pakistan.
Email: [email protected]
Bais Ali Ghumro, Research Fellow, SZABIST Islamabad, Pakistan. Email: [email protected]
Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Schlacter, 1990; Zeithaml and Bitner, 2000). So the intangibility property of services
gives a clear path to companies that branding is very much important for services in
order to create brand image as well as brand recognition in consumer’s minds (Baek
and King, 2011).
Higher competition in market within service sector and intrinsic characteristics of
services that intangibility and lack of physical characteristics leads service companies to
develop strong brands (O’Cass and Grace,2003) so this research is being conducted in
order to know the factors which lead brands to credible the position in market means
towards brand credibility.
Literature Review
Brand credibility
Brand credibility is the perception and trust of a person in a brand that both a brand has
the capability and readiness to provide what has been assured to deliver (Erdem and
Swait, 2004). Wernerfelt (1988) considers that higher the credibility of brand then higher
will be the consumer’s perceptions regarding the quality of brand because in
consumer’s opinions brand will be high in quality than other brands that are not having
much credibility.
Celebrity endorsement
Many corporations invest billions of dollars in celebrity endorsement to use it in
advertising promotion, identifying that celebrity endorsement is a best tool which convey
meaning to particular brands (Akhturan, 2011). MarketWatch (2006) states that one out
of four advertisements use celebrity endorsement. Celebrity endorsement is having
influence on many things just like on success of advertising, brand recognition, helps
people recall the brand, influences on purchase intention and the behavior when
purchasing any brand (Spry, Papu and Cornwell, 2011).
Goldsmith, Lafferty and Newell (2000) state that celebrity endorsement is a degree on
which celebrity is perceived that whether having the expertise related to it and can
people trust on that celebrity when giving opinions related to any brand or topic.
Perceived risk
Perceived risk is having no generally acknowledged definition within the ground of the
consumer behavior and it varies frequently according to the perspective of study
(Conchar, Zinkhan, & Olavariette, 2004).When the study of perceived risk, it is required
to think in the different dimensions of this idea. (Jacoby & Kaplan, 1972) recognized the
five different dimensions that are linked between perceived risk to the purchase.
Physical Functional: It is related the performance of the product, associated to
the physical comfort or health. (Roselius, 1971).
Financial: It is related with the potential monitory failure (Mitchell, 1998).
Social: Comparative to the view of other individuals regarding the buyer,
Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Psychological risk: It linked to the persons self respect.
Time risk: It refers to the lost of time which effects the failure of product.
It has been recommended that growing consumer information is the most important
approach to reduce perceived risk because if they have more knowledge or experiences
so consumer perceive less risk. Knowledge is frequently calculated both subjectively
and objectively (Cordell, 1997). Most research studies measure the subjectively
consumer knowledge. In the perspective of brand management and product, many
research studies gave a variety of special effects on consumer decision making on risk
aversion (Rao & Bergen, 1992).
Trust
According to Chaudhuri and Holbrook (2001) trust is readiness of a person to believe in
others capabilities that the brand will perform its basic functions. Trust is the part of
brand credibility in brand extension approval (Keller and Aaker, 1992). Trust has been
studied in several ways in different literature. Kelton, Fleischmann, and Wallace (2008)
defines four levels of trust which are: Individual (which is related to personality of
person), interpersonal (when one person trusts on other person), relational (which is the
partnership between two parties) and societal (which is related to characteristics society
as whole).
Zeithaml (1988) states perceived quality is consumer’s opinions about that brand.
Perceived quality is also being defined as the assessment variable which explains the
behavioral intentions Perceived quality always influences customers perceptions
towards the brands as the behavior of customers is change in different times.
Service Quality
Author Lewis and Booms (1983) said that the service quality is the phenomena by
which the customers’ expectations match with the level of delivery of service. Newman
and Pyne (1996) linked the social and commercial importance of the company with the
improved service quality and it also endorses their business interests. Past researchers
also said that not only its helps the organizations in generates profits but also leads
towards the highly satisfy customers (Oliver, 1980; Bolton and Drew, 1991; Stahl and
Bounds, 1991; Fitzsimmons and Fitzsimmons, 1994; Zeithaml and Bitner, 1996).
Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Hypothesis
H1: Celebrity endorsement is positively associated with brand credibility.
H2: Perceived risk is negatively associated with brand credibility.
H3: Trust has positive relationship with brand credibility.
H4: Service quality has positive relationship with brand credibility.
Population of this study is all cellular network users. Sample consists of all cellular network
users and the size of sample is 200. Primary data has been used for this research. Pakistan’s
telecom industry has been taken in this research so the population will be all people
who use the cellular networks. Data has been collected through questionnaire. Five points
likert scale was formulated in which scale was: 5= Strongly Disagree, 4= Disagree, 3= Neutral,
2= Agree and 1= Strongly agree. Data has been analyzed through SPSS. Convenience
sampling techniques has been used in this study.
Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Reliability
Description
Cronbac
h α
Table 1: Reliability
KMO
Bartletts Test
π
2
N
Sig
Brand Credibility
0.800
0.804
286.453
.000
5
Celebrity
Endorsement
Perceived Risk
0.819
0.831
317.628
.000
5
0.825
0.827
331.392
.000
5
Trust
0.679
0.678
147.585
.000
4
Service Quality
0.872
0.864
463.176
.000
5
In reliability analysis we check the reliability of our instrument. Cronbach α, represents
the reliability. Reliability’s minimum acceptable range is 0.6 and in our reliability analysis
cronbach α, value of every variable is more than 0.6 which shows that data is reliable.
KMO test help to measure the sampling adequacy. The value of KMO ranges from (01). To be an adequate sample the value of KMO must be greater than 0.6 as in this
research the value of every variable KMO is greater than 0.6, values are Brand
Credibility (0.804), Celebrity Endorsement (0.831), Perceived Risk (0.827), Trust (0.678)
and Service Quality (0.864) which shows that factor analysis is appropriate and sample
is adequate. Bartlett’s test which measures the sphericity, was found to be significant at
0.05. Here in this study, all values of the model variables were found to be significant
(table 1).
Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Correlation
Table 2: Correlations
Correlations
Brand
Credibility
Brand Credibility
1
Celebrity endorsement
200
**
.610
Celebrity
endorsement
Perceived
Service
Risk
Trust Quality
1
.000
Percevied Risk
Trust
Service Quality
200
**
.616
200
**
.692
.000
.000
200
**
.482
200
**
.370
200
**
.398
.000
.000
.000
200
**
.600
200
**
.642
200
**
.680
200
**
.356 1
.000
.000
.000
.000
200
200
200
200
1
1
200
**. Correlation is significant at the 0.01 level (2-tailed).
Correlation test assist to make the conclusion about the relationship among the
dependent and independent variables that how much effect independent variables,
celebrity endorsement, perceived risk, trust and service quality cause at dependent
variable brand credibility. The result of Pearson correlation for celebrity endorsement is
0.610 which shows that celebrity endorsement has positive relationship with brand
credibility. The value of perceived risk in Pearson correlation is 0.616 which shows the
positive relationship between perceived risk and brand credibility. Trust value in
Pearson correlation is 0.482 which is also having positive relationship of trust with brand
credibility while the value of Pearson correlation is 0.600 which also shows the positive
relationship of service quality with brand credibility.
Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Regression
Table 3: Model Summary
b
Model Summary
Model R
1
.720a
R Square
.518
Adjusted
Square
.509
R Std. Error of the
Estimate
Durbin-Watson
.61336
1.725
a. Predictors: (Constant), Service Quality, Trust, Celebrity endorsement,
Percevied Risk
b. Dependent Variable: Brand Credibility
The model summary shows the model fit. In the Table model summary the value of R is
given which stands for the correlation of the variables. The value of R is .720 so it
shows the positive relationship between the dependent variable brand credibility and the
independent variables, service quality, trust, celebrity endorsement and perceived risk.
The value of R Square shows that the variability in the dependent variable, Brand
Credibility is explained 51.8% by the variability in the independent variables, service
quality, trust, celebrity endorsement and perceived risk. It shows that the linear
combination of independent variables in the regression analysis predicts total variance
of dependent variable by 51.8% and 49.2% are the other determinants which is having
a impact on brand credibility.
ANOVA
ANOVAb
Model
1
Regression
Sum of Squares df
78.997
4
Mean Square
19.749
F
52.495
Sig.
.000a
Residual
73.361
195
.376
Total
152.358
199
a. Predictors: (Constant), Service Quality, Trust, Celebrity endorsement, Perceived Risk
b. Dependent Variable: Brand Credibility
Actual significant value is 0.05 and this Table Anova shows the sig value of 0.00
so according to it sig value 0.00<0.05 which shows that there is an association between
the dependent variable, Brand credibility and the independent variables, Service
Quality, Trust, Celebrity Endorsement and Perceived .
Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Coefficients
Coefficientsa
Unstandardized
Coefficients
Model
B
Std. Error
1
(Constant)
.716
.171
Celebrity
.243
.075
endorsement
Perceived Risk
.209
.077
Trust
.186
.044
Service Quality
.192
.062
a. Dependent Variable: Brand Credibility
Standardize
d
Coefficients
Beta
.236
t
4.198
3.232
Sig.
.000
.001
.208
.232
.224
2.701
4.228
3.111
.008
.000
.002
Collinearity
Statistics
Toleranc
e
VIF
.461
2.169
.417
.818
.478
2.401
1.222
2.094
Here, dependent variable is brand credibility and the independent variables are
celebrity endorsement, perceived risk, trust and Service quality.
Unstandardized Coefficients B shows the change in independent variable will cause
change in dependent variable. If 1unit of celebrity endorsement increase, which the
independent variable in this study is, there will be a 0.243 unit increase in brand
credibility. and if the 1 unit increases in perceived risk, then there will be 0.209 change
occur in brand credibility. If 1 unit changes in trust then there will be 0.186 changes in
brand credibility. Simultaneously, 1 unit changes in service quality causes 0.192
changes in brand credibility. t value shows the strength of relationship between the
variable. If the value of t is more than 2 either positive or negative it shows the
relationship. Here in this table, t value of celebrity endorsement is 3.232 which show the
strong relationship between the celebrity endorsement and brand credibility.
Simultaneously the t value of all other independent variables Perceived risk (2.701),
trust (4.228) and service quality (3.111) which shows the strong relationship of all these
variables with dependent variable brand credibility.
H1: Celebrity endorsement is positively associated with brand credibility.
Above table shows the value of unstandardized coefficient B is 0.243 so this shows the
positive relation between celebrity endorsement and brand credibility So this hypothesis
has been accepted.
H2: Perceived risk is negatively associated with brand credibility.
As the results in table shows that unstandardized coefficient B value is 0.209 which
shows that perceived risk and brand credibility are positively related with each other so
this hypothesis has been rejected.
H3: Trust has positive relationship with brand credibility.
Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Above results in the table show that the value of unstandardized coefficient B is 0.186
so this shows the positive relation between trust and brand credibility so this hypothesis
has been accepted.
H4: Service quality has positive relationship with brand credibility.
Results in the table shows that the value of unstandardized coefficient B is 0.192 so this
shows service quality and brand credibility has positive relationship with each other so
this hypothesis has been accepted.
Conclusion
This study has been conducted in order to know the different factors which have an
influence on brand credibility. Data has been analyzed, hypothesis has been made.
Survey has been conducted to know the impact of different variables, celebrity
endorsement, perceived risk, trust and service quality. After the data analysis we got the
results and results of these tests shows that our three hypothesis are accepted and one
is rejected. The hypothesis 1 has been accepted because it shows the positive
relationship of celebrity endorsement with brand credibility. Hypothesis 2 has been
rejected because it shows the positive relationship of perceived risk with brand
credibility which is vice versa to proposed hypothesis. Hypothesis 3 has been accepted
because of the positive relationship of trust and brand credibility. Hypothesis 4 is also
accepted because it has shown positive relationship between service quality and brand
credibility. So cellular organizations have to be careful regarding it that the needs, wants
and the expectations of the customers has to be analyzed and then formulate the
appropriate strategies to focus in order to make their brand in credible condition in the
market.
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