The Relationship Between Brand Equity

Published Date: 02 Nov 2017

Syed Irfan Shafi 1 & Dr C Madhavaiah2

Syed Irfan Shafi, M.B.A.,

Doctoral Research Scholar,

Department of Management Pondicherry University

Karaikal Campus, KARAIKAL – 609 605

E-mail: [email protected]

Mobile 09655812389

Dr. C. Madhavaiah, M.B.A., M.Phil., Ph.D.,

Assistant Professor, Department of Management Pondicherry University,

Karaikal Campus, KARAIKAL – 609 605

E-mail: [email protected]

Mobile 09381046647

The Relationship between Brand Equity, Apparel Product Attributes and Purchase Intention: A Study of Selected Apparel Brands in India

ABSTRACT

The main purpose of this study is to investigate the relationships among brand equity, Apparel Product Attributes and purchase intention from Indian young consumers view point. To accomplish these, a conceptual framework was designed and relationships among its constructs (Brand equity: Brand loyalty, perceived Quality, Brand association, Brand awareness), (apparel product Attributes: price, quality, design, Brand, style, Retail Store) and purchase intention were hypothesized. Data were collected from Indian students’ who were the owners of selected brand of Apparel garments. Hypotheses were tested using spearman’s Rho correlation coefficient analysis by using of SPSS. Results indicated that , (I) the relationship between brand equity (brand awareness, brand association, perceived quality, brand loyalty) and purchase intention was significant and positive and (2) the relationship between product attributes and purchase intention was also significant and positive.

Key words: Brand equity, Product, purchase intention, apparel, India.

Introduction

The development of Indian consumerism is increasing the demand for luxury goods, international brands, and consumer spending on apparel. Moreover, Indian consumers are demanding designer style apparel (Halepete&Iyer, 2008). Women in India have traditionally worn saris to work, which require blouses that have to be custom made. But, with a lack of time and an increased interest in wearing western clothing, working women are now looking for good ready-made clothing (Halepete&Iyer, 2008). In 2012, ready-made clothing accounted for 29per cent of domestic clothing sales in India ("Consumer lifestyles in India," 2012). While elderly Indian consumers still wear the traditional Indian sari, today’s young consumers wear trendy and fashion apparel, including jeans. As one study stated, "Indian traditional clothing always covered up much of the skin, but today, low-cut jeans, spaghetti strap tops, and other revealing outfits are considered trendy".(Halepete&Iyer, 2008, p. 681). In addition, Indian women were historically considered to adopt fashion more than men, but Indian men are now showing equal interest in fashion (Biswas, 2006).

Increased spending on apparel in India may be driven by the new comfort level with the use of credit cards. About 45 per-cent of Indian credit card spending is attributed to shopping for clothing and jewellery and eating out (Apparel retail: Labelling the Indian market, 2011).The above proposes is evident that Indian consumers are ready for new apparel brands and new price points suggested by foreign retailers; thus, it is important for companies to understand the important attributes Indian consumers look for while purchasing brand apparel.

Brand equity refers to the incremental utility or value added to a product from its brand name. It is often believed to contribute to a company’s long-term profitability. Despite apparel brand, efforts to establish and maintain their brand equity, a clear measurement of such equity is still lacking. Because there are several players, product attributes associated changing brands, for example, with frequent discount offers and other customer loyalty schemes gaining customers purchase intention, these need to be considered when examining relationships between brand equity, apparel product attributes and purchase intention.

Beside brand equity, consumers select a product by considering physical functions, which refers to product attributes. Keller (1 998) argued that product-related attributes are defined as the ingredients necessary for performing the product or service function sought by consumers, and non- product-related attributes are defined as external aspects of the product or service that often relate to its purchase or consumption in some way.

The purpose of this study is to measure the impact and relationship which brand equity, apparel product attributes has on purchase intention.

Literature Review

Many authors have defined brand equity; to some it is considered as the value of the brand, which is well known. Some refer it as the value enhancement due to the brand name. Traditionally brand equity is defined as value of the brand as attributed by its name. Definition given by (Yoo et al., 2000; Rust et al., 2001) states brand equity to include attributes which are broad in their nature having the ability to drive customer choice. Research conducted by (Keller, 1993; Chaudhuri, 1995) suggests that brand equity is component of financial and customer side. Slight modifications have been made in the attributes defined by Aaker (1996) based on previous research as his model suggests four variables (perceived quality, brand association, brand awareness and brand loyalty). Based on suggestions drawn by Gremler and Brown,(1996) service loyalty along with conceptualization of its antecedents has been used in research study. Service quality has been replaced with perceived service quality because (Lee, 2007) supports SERVPERF over SERVQUAL and argues that it has a better reliability as well as validity over SERVQUAL scale. Thus defining brand equity with (Service loyalty, perceived service quality and brand awareness & association).

Perceived Quality

Perceived quality has been considered as one of the dimensions of brand equity (Aaker, 1996). Perceived quality is consumer’s judgment about the quality of product on an overall basis (Zeithaml, 1988; Aaker& Jacobson, 1994). Research conducted by Sethuraman and Cole (1997) concludes perceived quality to contribute a major portion of variance in consumers’ willingness to pay price premium. One advantage that perceived quality generates is its applicability across different product categories. This research paper refers to Perceived quality as defined by (Zeithaml, 1988; Aaker& Jacobson, 1994) as "consumer’s judgment about the quality of product on an overall basis".

Brand Association

Brand association has been defined as the assets and liabilities of brand that are linked in the memory of customers (Aaker, 1991). Keller (1998) described brand association as informational nodes that are linked to the memory of the consumers containing meaning assigned to the brand by the consumers. Brand association is considered to be an important construct for marketers as it explains the points which are pivotal for consumers concerning the brand. Aaker (1991) explains the importance of brand associations as it help consumers shaping purchase decision by means of processing, organizing and retrieving information based on such associations. This research paper refers to brand association as the ability on behalf of customers to recognize the brands unique attributes and identify people it serves.

Brand Awareness

Brand awareness is considered to be an important construct of brand equity (Aaker, 1996). Rossiter and Percy (1987) argued that brand awareness is a process initiating communication from the customer to the company. It is not possible to initiate any sort of communication process without brand awareness as it is important for a consumer to be acquainted with the brand before buying it. Rossiter and Percy (1987) supports the argument by narrating the importance of brand awareness as no attitude or buying attention can be formed unless brand awareness has been developed. Rossiter et al. (1991) has of similar view that brand awareness is essential concept for buying behaviour. Stokes (1985) states that memory theory supports brand awareness to be the initial step in forming associations which can be found associated with the memory. Brand awareness in this research paper refers to customers’ ability to recall, remember the company and its logo, symbol and offerings.

Service Loyalty

Building and maintaining long term relationship has been supported by many researches to benefit organizations irrespective of the industry in which they are. Today’s extremely competitive environment demands a need for organizations to realize and build measures to enhance long term relationship building with their customers. The most important component of brand equity is considered to be brand loyalty. This concept can be used in case of products while Gremler and Brown (1996) postulated the importance of service loyalty in explaining loyalty. Service loyalty refers to the degree by which customer exhibits, repeat purchasing, contains a positive attitudinal behaviour and prefers to use the services/ product offered by the provider in case need arises (Gremlera, 1996). Macintosh and Lockshin (1997) argued about the importance of interpersonal relationship in building service loyalty compared to developing loyalty in case of tangible products. Marketing of services requires special attention to be attributed towards forming and maintaining person to person interaction (Czepiel, 1990; Crosby et al., 1990). On the basis of literature service loyalty is defined as customer’s ability to continuously patronize and prefer the brand.

Apparel Product Attributes

Various product attributes or features serve as criteria for consumers to assess or evaluate products. Previous studies have identified important attributes that consumers employ while evaluating apparel products. Attributes such as price, quality, design, brand image, and fissionability have been used in the evaluation of apparel products. However, results from these studies are not consistent (Jin, Park, &Ryu, 2010). For example, one study revealed that consumers placed importance on comfort and fit while evaluating jeans (Wu & Delong, 2006), but colour and fit were found to be important jeans attributes in another study (Delong, LaBat, Nelson, Koh, & Kim, 2002). Still, another study suggested that price and brand name were important for consumers purchasing jeans (Lennon, 1984).

The inconsistent results from the above studies suggest that attributes important to consumers may change over time. The phenomenon that consumer’ important attributes are not consistent and change over time has been suggested in previous studies (Erdem& Keane, 1996; Mayer, 1982; Roberts & Urban, 1988). The reasons for changes in customers’ preferences of product attributes were suggested to be changes in consumers’ consumption goals and perceptions of attribute performance (Mittal, Katrichis, & Kumar, 2001). That is, attribute importance varies over time because specific attributes contribute differently to a consumer’s consumption goals, and these goals may change over time (Gardial, Clemons, Woodruff, & Oliver, 1997; Schumann & Burns,1994). For example, the consumption goal of a consumer purchasing a car could be commuting to work; therefore, important attributes might be gas consumption and mileage. However, over time the consumption goal could shift from commuting to the vehicle being a statussymbol as the individual’s career develops and he/she earns a higher salary. At that point, the consumer might look for attributes such as brand name, luxurious features, etc.

While it is important to identify customer preferences of product attributes, it is also important to anticipate changes in customer preferences of attributes. In the context of apparel attributes, studies so far have only identified attributes that are important for consumers in evaluating apparel products at one point in time (cross sectional), which limits the usefulness for predicting consumers’ future attribute preferences. Therefore, it is essential to compare and categorize apparel attributes in a way that will aid in predicting the pattern of change and anticipate consumers’ future attribute preferences for evaluating apparel products.

Purchase Intention

Morwitz et al., (2007) defined purchase intention as a situation in which consumer is propelled to purchase a product according to certain conditions. Prior literature has studied the relationship between purchase intention and advertisement effectiveness. For this purpose Baker and Churchill, 1977 have developed a scale to measure advertisement effectiveness. Kwek et al., (2010) identifies purchase intent to be one attribute concerning with cognitive behaviour. Some researcher’s states customer consideration in buying to be a measure of purchase intention.

Intentions and attitudes are two distinct measures. Attitudes can be referred as summary evaluations, while intentions represent "the person’s motivation in the sense of his or her conscious plan to exert effort to carry out behaviour". Purchase intention refers to the customer’s willingness to buy the brand, increase and continue its usage. Research conducted by (Walgren, et al., 1995) examines brand equity, brand preference and purchase intention, where relationship of brand equity with purchase intention still remains to be explored.

Consumers use a variety of product attribute cues to evaluate a product (Gardial et al., 1994). Therefore, identifying the attributes that are important to consumers can aid in improving the product or service. In particular, India Retailers and manufacturers that want to sell their apparel products to competitive markets need to understand consumers’ evaluations of Indian apparel attributes. Such an understanding will help firms better comprehend consumers and cater to their needs, enhance satisfaction, and increase future sales.

CONCEPTUAL FRAMEWORK

The researcher developed a conceptual framework (See Figure 1) for this research based on Aaker's (1991) brand equity concept. Moreover, the antecedents and consequences of the brand equity model (Cobb-Walgren et al., 1995) were also used to support the framework for this study.

In the framework, brand equity includes brand awareness, brand association, perceived quality and brand loyalty. Apparel Product attributes includes price, quality, design, brand, style and retail store. Purchase intention was set as the dependent variable of this study.

Figure 1

Brand Equity

Brand loyalty

Perceived Quality

Brand Awareness

Brand Association

Purchase Intention

Apparel Product Attributes

Price

Quality

Design

Brand

Style

Retail Store

Hypothesis

Although prior research has been focusing too much on the Relation between brand equity, apparel product attributes and purchase intention. So, the hypothesis has been developed as

Group A: Brand Equity and Purchase Intention

H1: There is a relationship between brand loyalty and purchase intention.

H2: There is a relationship between perceived quality and purchase intention.

H3: There is a relationship between brand awareness and purchase intention.

H4: There is a relationship between brand association and purchase intention.

Group B: Product Attributes and Purchase Intention

H5: There is a relationship between price and purchase intention.

H6: There is a relationship between quality and purchase intention.

H7: There is a relationship between design and purchase intention.

H8: There is a relationship between brand and purchase intention.

H9: There is a relationship between style and purchase intention.

H10: There is a relationship between Retail store and purchase intention.

Methodology

Sampling

The sample was university students enrolled at Pondicherry University. Respondents were informed in writing that completing the questionnaire was anonymous, voluntary, and there were no penalties for not participating. A total of 100 participants completed self-administered questionnaires and the questionnaire were disbursed to customers who use one among apparel brand (Levi’s, Pantaloons, Peter England, and Oracle) regularly.

Data Collection

For this purpose a five point likert scale has been used ranging from 5 = strongly agree, 4 = agree, 3 = somewhat agree, 2 = disagree and 1 = strongly disagree. The best method of data collection is considered to be survey in order to collect data from a large population. Kerlinger& Lee, (2000) stated that information that is gathered reliably and validly can be generalized to the entire population. Questionnaire constitutes two parts one pertaining to items for different variables (Likert scale) and the second concerning questions with demographics (nominal and ordinal scale). A total of 100 questionnaires were distributed in the Pondicherry University, and were gathered randomly by the researcher himself who had the capacity to explain every facet of the questionnaire where ever required.

The survey covered branded apparel garments products from which 4 brand names were selected ( Levi’s Pantaloons, Peter England, Oracle) .

Data Analysis & Findings

The collected data have been analysed using different statistical methods such as Spearman Rank-Order Correlation Coefficient was used to analyse the relationship between the variables in this study. Statistical data analysis was entirely conducted using the programme package Statistical 16.0. The researcher used the mean of each question to interpret respondents' perception toward apparel branded products. See Table 1 exhibit the mean and standard deviation.

Table 1Mean and SD

Mean

S.D

Brand Equity

Brand loyalty

4.01

0.63454

Perceived Quality

3.90

0.54553

Brand Awareness

4.15

0.51081

Brand Association

3.71

0.62351

Apparel product Attributes

Price

3.84

1.002

Quality

3.60

1.189

Design

3.67

1.111

Brand

4.35

0.770

Style

2.79

1.629

Retail Store

3.96

0.875

In terms of brand equity, brand awareness gained the highest mean score (4.15), followed by brand loyalty (4.01) and perceived Quality(3.90). Brand association was perceived lowest with a mean score of 3.71.

Forapparel product attributes, Brand obtained the highest mean score (4.35), followed by Retail Store (3.96), price (3.84),design (3.67), quality (3.60), and style (2.79) respectively. Indian respondents, therefore, considered Brand resolution as the most important attribute followed by Retail store, price, while the attribute that they considered least was the Style. (See Table 2) for summary of Hypotheses

Summary of Hypotheses Testing

Table 2: Summary of Hypotheses Testing Result

Hypothesis

Level of significance

Correlation Coefficient

H1: There is a relationship between brand Loyalty and Purchase intention

0.000

0.289*

H2: There is a relationship between Perceived Quality and Purchase intention

0.000

0.135*

H3:There is a relationship between brand awareness and Purchase intention

0.000

0.055*

H4: There is a relationship between brand association and Purchase intention

0.000

0.040*

H5: There is a relationship between Price and Purchase intention

0.000

0.985*

H6: There is a relationship between quality and Purchase intention

0.000

0.629*

H7:There is a relationship between design and Purchase intention

0.000

0.575*

H8: There is a relationship between Brand and Purchase intention

0.000

0.194*

H9: There is a relationship between style and Purchase intention

0.000

-0.206*

H10: There is a relationship between retail store and Purchase intention

0.000

0.131*

*Correlation is significant at the 0.01 level (2-tailed).

Path coefficient estimation measurement was an examination of how supportive the hypotheses were. See Table 3 showed the result of hypotheses testing. It could be concluded that nine hypotheses were confirmed while the other one were not confirmed.

Table3. Measurement model for actual test (path coefficient)

Path

Sample Mean(M)

Standard Deviation (STDEV)

Coefficient

Hypothesis

H1: BL-PI

H2: PQ-P1

H3: BAW-PI

H4: BAS-PI

H5: P-PI

H6: Q-PI

H7: D-PI

H8: B-PI

H9: S-PI

H10: R-PI

4.01

3.90

4.15

3.71

3.84

3.60

3.67

4.35

2.79

3.96

0.63454

0.54553

0.51081

0.62351

1.002

1.189

1.111

0.770

1.629

0.875

0.289*

0.135*

0.055*

0.040*

0.985*

0.629*

0.575*

0.194*

0 -.206*

0.131*

Confirmed

Confirmed

Confirmed

Confirmed

Confirmed

Confirmed

Confirmed

Confirmed

Not-Confirmed

Confirmed

The relationships between elements of brand equity and purchase intention are moderately positive (H1-H4). Such relationships demonstrate that the intention or likelihood to purchase apparel branded products will increase when consumers' perception ofbrand equity increased. Among elements of apparel products brand equity, respondents awarded high scores to brand loyalty, while brand association obtained the lowest score.

The relationships between product attributes (Quality, design, Brand, retail store) indicate that product attributes slightly affect purchase intention toward apparel branded products. Respondents consider price resolution as the most important attribute for apparel products, while Style is the least important.

Conclusion and Recommendations

The data collected consists of generalized result due to limitation of data which is non-random. Most of the results are significant and are relevant with the literature with little exception. Model is also a good fit of variables. From the above mentioned results it is concluded thatthe relationship between brand equity (brand awareness, brand association, perceived quality, brand loyalty) and purchase intention was significant and positive and (2) the relationship between products attributes and purchase intention was also significant and positive.

The findings of this research provide useful information for apparel retail managers and staffs. It offers better insights into Indian consumers' perceptionof apparel products which will help them in setting appropriate marketing strategies. Moreover, the findings on product attributes could be important for managers to adapt or improve various features of forthcoming branded apparel products. From the results apparel retailer should maintain the level of price, to ensure the consumers purchase intention. As the results show a relatively lower brand association among consumers, apparel retailer has to find ways in which to increase this factor among its consumers.

Limitations &Further Research

Results of this study may be viewed with the following limitations. (1)Although the sample size was 100 .This sample size wassmall as compare to the population of apparel productusers in India. Sample size cannot be considered as large enough to present a true picture of the market. (2) Only four dimensions of brand equity (perceived service quality, Brand association & awareness and service loyalty) have been measured. Other dimensions as brand personality have been ignored.

Further research could be directed at Brand equity has been measured from customer perspective, new research can be established looking into the company and market dimensions of brand equity as actual sales and market share.Moreover, the sources of generating brand equity, such as, advertising that creates the value of the brand should be examined. Further research should also examine the comparative brand equity value between other major players in the apparel retail market.

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