Corporate brand image, Customer perceive brand equity on Customer loyalty and Satisfaction of
Starbucks Coffee: A comparative study in Thailand and Australia
1. INTRODUCTION
2. RELEVANT LITERATURE REVIEWS AND HYPOTHESES DEVELOPMENT
This study attempts to conceptually link Corporate Brand Image and Customer perceived brand equity
of firms to marketing performance which consist of customer loyalty and customer satisfaction. In the
research model of this study, Corporate Brand Image has antecedent of Customer perceived brand
equity, customer loyalty, and customer satisfaction. In this study, all hypotheses are proposed to have a
positive effect. Thus, this conceptual model presents the relationships between all of construct as shown in
Figure 1 below.
Resecrch Model
Customer perceived
Brand Equity
H1
H5
Corporate Brand Image
H2
Customer loyalty
H4
H3
Customer
Satisfaction
H6
In this research use RBV and structure conduct performance (SCP) theory to back up our model
According to corporate brand image, customer perceived brand equity, customer loyalty, and customer
satisfaction used resource-based view of the firm (RBV), and structure conduct performance (SCP) to
explain research phenomena. Firstly, the resource-based view of the firm (RBV) assumes that resources
and capabilities are variously distributed among firms. These resources must be valuable, rare, imperfectly
mobile, and inimitable to provide sustained competitive advantages (Barney, 1991). The resource-based
view of the firm argues that competitive advantage and hence performance depend on resource
endowments (Hooley & Greenley, 2005). Newbert (2007), in his review of empirical research on the
resource-based view of the firm, emphasizes capabilities rather than resources, in terms of relevance and
potential impact on performance. Corporate branding is an intangible asset of a company (Fombrun,
1996). In addition, Ind (1997) suggests that corporate brand is a sum of values that represents an
organization. Values (e.g. honest, caring, responsible, and ambitious) are normally measured through
projective technique (Davies et al., 2003). Keller (1993) defined brand image is a perception about a brand
held in consumer memory. Corporate brands are intangible assets for companies that are difficult to
imitate, and it is different from products brands as emphasizing the important of brand values (De
hertanony, 1999). Therefore, corporate brand image is firm’s capability that is valuable, rare, imperfectly
mobile, and inimitable to provide a sustained competitive advantage.
2.1 Corporate Brand Image
Corporate branding is an intangible asset of a company (Fombrun, 1996). Corporate brand differs from
product branding as it stresses the importance of brand values (de Chernatony, 1999). For example, “it is
seen as the additional brand values that are inherent in or associated with the corporation and its product
and services” (Balmer and Gray, 2003). In addition, Ind (1997) suggests that corporate brand is a sum of
values that represents an organization. Values (e.g. honest, caring, responsible, and ambitious) are
normally measured through projective technique (Davies et al., 2003). Ind (1997) reported that when
consumers purchase products from a company, they not only buy products but also receive a set of values
form the company. Corporate brands are a sum of values representing the corporate (Ind, 1997), and a
positive corporate brand image is not only help companies to increase competition but also encourage
consumers to re-purchases (Porter & Claycomb, 1997). Consumers more favorable the image has higher
perceived in quality, value, satisfaction and loyalty (Johnson, Andreessen, Lervik, & Cha, 2001).
Corporate brand image has several terminologies (such as corporate image, brand personality) and could
be seen as an emotional element and values and is associated with one’s experience of a company brand
(Faridah, S., & Alwi, S., 2009 )
Keller (1993) defined brand image is a perception about a brand held in consumer memory. Corporate
brands are intangible assets for companies that are difficult to imitate, and it is different from products
brands as emphasizing the important of brand values (De hertanony, 1999).
Aaker (1997), Davies et al. (2003), and Keller (2003) indicate that corporate brand image is intangible
aspects of consumer brand knowledge.
About corporate brand image literatures it have three different literatures namely psychology, consumer
behavior (consumer psychology) and corporate branding (when the corporation is viewed as brand). In
consumer psychology, understanding of how consumers respond
to a brand (positive, favorable perception and willing to commit to positive word-of-mouth) begins from
attitudes (Franzen & Bouwman,2001). In a corporate branding, Stern, Zinkhan, & Jaju (2001) explain that
image about a corporation refers to external world perceptions (or impressions that reside in stakeholder
minds), which represent ‘gestalt’ or overall impressions of a brand. Also, brand image has been commonly
associated with the global total impression related to the brand is stored in memory and which is shared by
members of a culture or subculture (Franzen & Bouwman, 2001).
corporate brand image is defined as the sum of values that represent an organization (Ind,1997) and these
values (or symbolic values / the corporate brand image) may derive from consumer perception of the
brand attributes (Patterson , 1999).
Faridah, S., Alwi, S., & Kitchen, P. J. (2014) suggest that both brand and corporate image can be defined
in similar ways (they both belong to an attitude concept) which is (1) seen as overall attitude or judgment
about the brand; and (2) driven by both cognitive and affective brand attributes. Cognitive concerns ‘what’
we know about an object; affective refers to ‘how’ we feel, we are to act on it upon our knowledge and
feelings (Chiu, 2002)
Thus, in this research, corporate brand image refers to consumer overall attitudes and impressions from
their experiences with the Strabucks. For example, overall attitude evaluation could be in terms of
judging a Strabucks to have good image, having a good impression and/or a better image than
competitors.
Corporate brand image and customer loyalty
Faridah, S., & Alwi, S. (2009) are study on corporate brand image and consumer behavioral intention in
an online context. Specifically, the study reports corporate brand image has positive relationship to loyalty
intention.
Da Silva and Syed Alwi, 2008). investigates the influence of corporate brand image on consumer
satisfaction, and, subsequently, loyalty intention in an online context.
Moreover, Selnes (1993) confirms the effect of corporate brand image on brand loyalty. The author
emphasises that when corporate brand/brand reputation is controlled, brand reputation has a strong
positive direct effect on brand loyalty and this finding has been consistent throughout all four companies
that he investigated in his research (i.e. Fishmonger, College, Insurance and Telephone companies)
Tu, Y., Wang, C., & Chang, H. (2012) found that corporate brand image significantly affects customer
satisfaction and customer loyalty, and customer satisfaction has strong impact on customer loyalty. They
study in Taiwan from the customers of Starbucks Coffee in Taipei
area. Likewise, Chen, P., & Hu, H. (2010) investigating how relational benefits enhance perceived value
to win customer loyalty in coffee outlets in Australia. The findings show that relational benefits have
direct effect on perceived value and customer loyalty. In addition, relational benefits also have indirect
effect on loyalty via perceived value. Finally, perceived value positively influenced customer loyalty.
Faridah, S., Alwi, S., & Kitchen, P. J. (2014) study corporate brand image, focusing on cognitive and
affective brand attributes in the context of business schools. The findings reveal that
both cognitive and affective attitudinal components appear equally important in shaping corporate brand
image. Moreover, the results reveal corporate brand image has positive relationship to satisfaction and
loyalty.
Hart & Rosenberger (2004) found that corporate image having a significant impact on core service and
customer satisfaction perceptions. Corporate image was found to have only a marginally significant direct
influence on customer loyalty, though the total effects of corporate image (both direct and indirect) on
customer loyalty are much more substantial.
Thus, it is apparent from the above discussion that somehow corporate brand image and behavioral
intention or loyalty dimensions are all related to each other. Thus, based on the above discussion on the
relationships between corporate brand image and loyalty, the study proposes that:
2.2 Brand Equity
Brand equity is the goodwill that an established brand has built up over its existence. It can be considered
from both the vantage point of the organization and the customer. Aaker (1991) defines brand equity as a
name or symbol that is the brand assets and liabilities the associated to brand which add value in the
product to a firm or customer. Moreover, the brand equity of Aaker (1995) framework has five dimensions
which consist of brand awareness, brand association, perceived quality, brand loyalty, and brand assets.
Meanwhile, the other perspective is from Keller (1998) who suggests that brand equity is of two levels:
customer-based and firm-based approach). Keller (2008) proposes six dimensions of brand equity,
arranged in four hierarchical levels: salience in the bottom level, performance and image in the next level,
judgment and feeling in the second-to-top level, and resonance in the top level. Consumer choice is much
affected by brand equity characterized as such, and thus those in consumer markets are fully aware of the
need to appropriately manage brand equity (Aaker, 1991, 1996; Keller, 2008). On the other hand, brand
equity is relatively downplayed in business markets due to some distinct aspects of the business market
exchange (Kotler & Pfoertsch, 2007; Webster & Keller, 2004).
The firm-based viewpoint of brand equity focuses on outcomes extending from efforts to enhance a
brand’s value to its various stakeholders and discusses various outcomes: (1) achieving a higher market
share, (2) increasing brand loyalty, (3) being able to charge premium prices, and (4) earning a revenue
premium (Shimp and Andrews, 2013). From the perspective of the customer, a brand possesses equity to
the extent that they are familiar with the brand and have stored in their memory favorable, strong, and
unique brand associations. As brand strength increases, industrial buyers become more likely to
repurchase and pay a price premium (Bendixen et al., 2004; Hutton, 1997; Roberts and Merrilees, 2007;
Taylor, Hunter, and Lindberg, 2007)
Perspectives of Brand Equity
Brand equity can be seen as emanating from three different perspectives
1. Cognitive perspective
The first is the cognitive psychology perspective, which defines brand equity as the differential
consumer response to a brand’s marketing mix that results from consumer associations for a brand
(Aaker, 1991; Keller, 1993). This perspective takes into account the fact that brands for which consumers
have more favorable brand associations, or brands with higher brand equity, will be able to generate more
positive marketing mix responses from their consumers than brands with less favorable brand
associations. Brand equity is the result of consumer responses to marketing activities, influenced by
consumers’ brand associations (Anderson, 2007).
2. Information economics perspective
The second perspective of brand equity is the information economics perspective, which
views brand equity as the increased utility that a brand name gives to a product (Erdem and Swait, 1998;
Wernerfelt, 1988). In this perspective, the brand name is a signal to consumers of product quality; it is
derived from perceived firm costs or investments, and this perceived quality reduces information costs for
the consumer, thereby increasing utility. This perspective is important in that it introduces the firm
perspective into brand equity (Anderson, 2007).
3. Financial markets perspective
The third perspective of brand equity is the financial markets perspective, which defines financial-based
brand equity (FBBE) as a financial measure of a firm’s market value minus the tangible asset value
(Simon and Sullivan, 1993). The importance of this perspective lies in its forward-looking measurement
of brand equity
In this study focus on Consumer-based brand equity (CBBE)
Consumer-based brand equity refers to consumers’ feelings of a particular product due to associations that
are not necessarily related to specific product attributes, that is, associations that exist independent of the
product itself (Keller and Lehmann, 2006). The customer level measurement perceives the value of a
brand to originate entirely from the consumers (what they buy, how they buy, why they buy, etc.).
Therefore, consumers assign levels of equity to brands when they favor one over the other. From the
consumers’ point of view, brand equity is part of their attraction to or repulsion from a product (Keller and
Lehmann, 2006).
Aaker (1991) suggest customer- based Brand Equity including (1) brand loyalty (2) perceive quality (3)
brand association (4)brand awareness (5) other proprietary.
Keller (2008) show customer- based Brand Equity Pyramid are consisting of six dimensions
1) Brand Salience
2) Brand Performance
3) Brand Imagery
4) Brand Judgments
5) Brand Feelings
6) Brand Resonance
2.3 Customer loyalty
Customer loyalty is concerned with the likelihood of a customer returning, making business referrals,
providing strong word-of-mouth, as well as providing references and publicity (Tam, 2004). Customer
loyalty can be classified as brand loyalty, service loyalty, and store loyalty (Dick & Basu, 1994).
The previous literature show two main approaches about Customer loyalty: behavioral and attitudinal
(Chaudhuri and Holbrook, 2001; Dick and Basu, 1994; Zeithaml, 2000). The first approach considers
loyalty as behavioral (Ehrenberg et al., 1990; Kahn et al., 1986), assuming that repeated purchasing can
capture the loyalty of a customer towards the brand of interest. Behavioral loyalty is expressed as repeated
transactions.
The second, attitudinal approach suggests that attitude should be included along with behavior to define
loyalty. However, Dick and Basu (1994) argued attitudinal scales serve as a more valuable means to
recognize the determinants of customer loyalty than behavior scales and therefore, have a primary
advantage of over behavior scales.
Assael (1992) defined loyalty as a favorable attitude towards a brand, thus resulting in consistent
purchases of the brand over time.
Dick and Basu (1994) proposed that customer preference is central to a loyalty
conceptualization. Butcher et al. (2001) indicate that loyalty conceptualization is customer preference for
the service ahead of competition. Chen & Hu (2010) define as customer loyalty as a customer’s favorable
attitude of enduring psychological attachment, resulting in preference, towards the provider based on
experience.
Oliver (1997) defined customer loyalty is as “a deeply held commitment to re-buy or re-patronize a
preferred product or service consistently in the future, despite situational influences and marketing efforts
having the potential to cause switching behavior”
With loyal customers, companies can maximize their profit because loyal customers are willing to (1)
purchase more frequently; (2) spend money on trying new products or services; (3) recommend products
and services to others; and (4) give companies sincere suggestions (Reichheld & Sasser, 1990). Thus,
loyalty links the success and profitability of a firm.
2.4 Customer satisfaction
Customer satisfaction has two streams of literature. First, process satisfaction, is believed to be primarily
about cognitive evaluation of satisfaction (Oliver , 1993). A process definition is more concerned with the
cognitive or psychological processes that motivate a satisfaction response. Oliver (1993) describes how
consumers summarize their process (brand) attribute experience and how this summary information later
influences satisfaction. Customer satisfaction is a cognitive evaluation between what is expected and what
is received (and this is known as the expectation – disconfirmation paradigm) (Oliver, 1981 ).
Second, affective outcome satisfaction, According to this definition, satisfaction is viewed as ‘ a
pleasurable level of consumption related fulfilment ’ (Oliver, 1997). Yi (1990) argues that ‘ The presence
of positive or negative affect, unrelated to the product itself (such as the corporate brand name as in this
present study), may well influence the affect evoked by the evaluative process inherent in satisfaction
formation.
According to Oliver (1997), satisfaction is defined from the mixture of both affection (emotion) and
cognition approach as “the consumer’s fulfillment response. It is a judgment that a product or service
feature, or the product or service itself, provided (or is providing) a pleasurable level of consumptionrelated fulfillment, including levels of under- or over-fulfillment” (Oliver, 1997).
Customer satisfaction is viewed as influencing repurchase intentions and behavior, which, in turn, leads to
an organization’s future revenue and profits (Tu, Wang, & Chan, 2012). However, Bowen and
Shoemaker (2003) stated that satisfied customers might not return to the firm and spread positive word-ofmouth communications to others.