Impact of brand equity on customer’s loyalty
Introduction
In order to establish the ideal brand awareness, marketers must make sure that customers
have the appropriate experiences with products and services as well as marketing initiatives.
Consumer perception is where brand equity comes from (Keller and Lehman, 2006). It is
critical for businesses to be able to measure brand equity from the viewpoint of consumers.
Brand equity measures the variation in the impact of brand knowledge on consumer responses to
brand promotion. Numerous studies on brand equity have been conducted internationally and in
Pakistan. These studies demonstrate, either directly or indirectly, that brand equity influences
consumer decision to use a product favorably (Pinassang and Rahardjo, 2017; Suharyani et
al., 2016). The perception of quality will be impacted by brand equity, which will then have an
impact on loyalty (Sari, 2017). Positive brand equity will generate revenues, boost customer
confidence in unseen service product and help consumers comprehend and be able to envision
what they buy. According to Berry’s (2000) research of high performing service organizations
along with the capacity to deliver a positive experience when consumers use services, external
communication efforts are crucial for brand development.
A set of brand assets and liabilities including a brand name and symbols, can improve or
decrease the brand value that a product or service offers to a business or that business’s clients.
The most significant asset of the business, brand equity, must be preserved, because of consumer
devotion to company’s brand, consumer think carefully before buying a product. Customer will
keep purchasing goods from the companies brand even after it has become their primary option.
If a product lives up to consumer’s expectations, sales will be increased. He will use the
consumer experience he gained from using the product as a guide and to share it with others (K.
Kaoy et al., 2020).
Defining Brand
“Brand equity refers to the marketing outcomes that accrue to a product with its brand
name compared with those that would accrue if the same product did not have the brand name. In
other words, consumer’s, knowledge about the brand manufacturers/ advertisers responds
differently or adopt appropriately adept measures for making of the brand” (Ramachandran,
2010).
Defining Customers Loyalty
In today’s cutthroat economic environment, maintain customer loyalty is essential and
banks are no exception (Ethigie, 2006). Customer loyalty therefore, has a significant impact on a
company’s performance and is viewed by many businesses as a key source of competitive
advantage (Lam et al., 2006).
Literature Review
A rising corpus of research contends that brand equity plays a significant role in
establishing customer’s loyalty. Numerous studies have revealed that brand equity can influence
customer loyalty positively and that customers who have strong brand equity are more likely to
be brand loyalists. For instance, a study by Rust and Oliver (1994) discovered that brand equity
was a significant predictor of customer loyalty and that consumers who had substantial brand
equity were more likely to be brand loyal. A study by Keller (1998) discovered a positive
relationship between brand equity and consumer loyalty and that patrons with a high level of
brand equity were more likely to be devoted to a certain brand. Customers were more likely to be
satisfied with a brand when they had a high amount of brand equity, and this pleasure was
positively correlated with customer loyalty (Aaker, 1991).
In general, the research indicates that brand equity plays a significant role in establishing
customer’s loyalty. Customers that have a strong sense of loyalty toward a brand are more likely
to do so, and brand equity can enhance customer loyalty through influencing customer
satisfaction and perceived value. Further study is required to better comprehend these intricate
relationships, while there are also a number of other elements that can have an impact on the link
between brand equity and consumer loyalty. According to Baldinger and Rubinson (1996),
loyalty conceptualizations that are exclusively behaviorally based will not be as effective
predictors of behaviour as definitions of loyalty that incorporate both attitudinal and behavioral
components.
H1; Customer loyality is positively related to satisfaction.
According to Oliver (1999a), "value" is a distinct concept from satisfaction and quality.
He suggests a numerological net model that shows value and satisfaction occurring both before
and after consumption. As consumers make purchasing decisions over time, he sees various
constructs coexisting and affecting one another as well as outcome variables like loyalty.
H2; Customer loyality is positively related to value.
The literature that is now available generally acknowledges that relationship marketing
depends on commitment (Morgan and Hunt, 1994). By imagining trust as an antecedent to
calculative commitment and loyalty commitment, Gilliland and Bello (2002) put forth a
paradigm that seeks to connect commitment to trust and loyalty. These scholars expand on ideas
about commitment by contending that resistance to change is both the primary indicator of
commitment and its underlying tendency. These writers also provide proof that resistance to
change is a crucial factor in determining loyalty (Steven A. Taylor, Kevin Celuch and Stephen
Goodwin).
H3; Customer loyality is positively related to resistance to change.
According to Kim et al. (1998) indicate that affect can effect consumer attitudes even in
the absence of product beliefs. The description of the importance of emotions in marketing
provided by Bagozzi et al. (1999) provides a framework for how affect is included in the current
research. These authors claim that marketing is permeated with emotions. It is recognised that
they affect how information is processed, moderate how people react to persuasive arguments,
gauge how marketing stimuli affect consumer behaviour, conduct goal-directed action, and serve
as both goals and indicators of consumer welfare (Steven A. Taylor, Kevin Celuch and
Stephen Goodwin).
H4; Customer loyality is positively related to affects.
According to Hart and Johnson (1999), pursuing "complete trust" in a manner akin to
TQM initiatives is preferable. As a result, they view trust as moderating the relationship between
loyalty and satisfaction. According to a model presented by Singh and Sirdeshmukh in 2000,
satisfaction (which is in turn subservient to loyalty) is a prerequisite for trust. The work of
Chaudhuri and Holbrook (2001), who developed a model for explaining brand loyalty,
supports this view of trust as a prerequisite to loyalty (also see De Ruyter et al., 2001). The most
current evidence that value mediates the relationship between loyalty and trust is presented by
Sirdeshmukh et al. (2002). Evidence that trust and attitudes play significant roles in competitive
advantage in service is provided by De Ruyter et al. (2001).
H5; Customer loyality is positively related to brand trust.
According to Keller (1998, p. 45), brand equity might be defined differently from customer
loyalty.as, the distinct impact brand knowledge has on how consumers react to a brand's
marketing. Provide proof that trust and attitudes play significant roles in gaining a competitive
edge in the service industry. He contends that a brand has positive customer-based brand equity
when consumers respond more favourably to a product (branded) and the manner in which it is
marketed than they do when it is not. In contrast to an unidentified or fictitiously named version
of the product, customers may respond less favourably to marketing initiatives linked with a
brand. This is known as negative customer-based brand equity (Steven A. Taylor, Kevin
Celuch and Stephen Goodwin).
H6; Customer loyality is positively related to brand Equity.
Company's equity can be influenced by customer loyalty in a number of different ways,
and that brand equity is positively correlated with customer loyalty.
First, devoted customers are more likely to stick with a company and make more purchases,
which can boost sales and profitability. This may raise the brand's equity and ultimately boost its
financial value.
Second, devoted customers are more likely to spread the word about a company, which can
result in effective word-of-mouth advertising. This may raise consumer awareness of the brand
and promote more sales, both of which may raise the brand's perceived value.
Finally, loyal customers are less likely to move to a competitor's goods or services and are more
likely to be understanding of the brand's missteps. The brand can benefit from maintaining its
clientele and reputation, both of which add to the equity of the company. (Aaker, D. A.,
Fournier, S., & Brasel, S. A. (2004). The impact of customer loyalty on brand equity.
Journal of Marketing, 68(2), 76-87.)
Satisfaction
Value
Resistance to Change
Customer loyalty
Affect
Trust
Brand Equity
Questions
Does the heavy equipment company I am evaluating offers good value for the price I paid?
 Agree
 Strongly Agree
 Neutral
 Disagree
 Strongly Disagree
Does the heavy equipment company I am provide customers with a good deal?
 Agree
 Strongly Agree
 Neutral
 Disagree
 Strongly Disagree
Do you consider that the heavy equipment I am evaluating to be a bargain for the benefits I am
receiving?
 Agree
 Strongly Agree
 Neutral
 Disagree
 Strongly Disagree
Do you trust that the manufacturer of the heavy equipment I am evaluating?
 Agree
 Strongly Agree
 Neutral
 Disagree
 Strongly Disagree
Do you rely on the manufacturer of the heavy equipment I am evaluating?
 Agree
 Strongly Agree
 Neutral
 Disagree
 Strongly Disagree
Does the manufacturer of heavy equipment I am evaluating is a dependable?
 Agree
 Strongly Agree
 Neutral
 Disagree
 Strongly Disagree
Does the manufacturer of heavy equipment I am evaluating is honest?
 Agree
 Strongly Agree
 Neutral
 Disagree
 Strongly Disagree
Does the manufacturer of heavy equipment I am evaluating is a safe company with which to
conduct business?
 Agree
 Strongly Agree
 Neutral
 Disagree
 Strongly Disagree
Do you consider that the manufacturer of the heavy equipment I am evaluating to be generally
trustworthy?
 Agree
 Strongly Agree
 Neutral
 Disagree
 Strongly Disagree
Do you believe that the manufacturer of the equipment I am evaluating does not take advantage
of its customers?
 Agree
 Strongly Agree
 Neutral
 Disagree
 Strongly Disagree
Do you consider that the company and people who stand behind the equipment I am evaluating
to be trustworthy?
 Agree
 Strongly Agree
 Neutral
 Disagree
 Strongly Disagree