Marketing Mix Elements Influencing Brand Equity and Brand Choice

Abstract

This study develops and empirically tests a model for determining the determinants and effects of brand equity for the Indian passenger car market. Towards the same, the Brand Equity Creation Model developed by Yoo, Donthu and Lee (2000) was expanded and combined with the Brand Choice Model developed by Erdem, et al (1999). The dimensions of brand equity were thought to affect Overall Brand Equity, which in turn affected the final brand choice made by the consumers. The effect that ten selected marketing activities had on the dimensions of brand equity was examined. The passenger car market was differentiated on the basis of the price of car as premium, volume, and economy type and shopping centre intercept survey was conducted to collect respondent data across ten centres throughout the country. Multiple time passenger car buyers were considered as the respondent base for the study. A total of 1,932 consumers were contacted and 302 valid responses were received. Structural Equation Model was used as the tool for analysis. The results showed that: Of the ten marketing mix elements considered, some had a very strong impact on brand equity because they positively impacted both the dimensions considered for the study. However, contrary to what many previous studies reported, country of origin and price promotion did not impact the brand equity for such consumers. Advertising frequency is not a builder of brand equity; word-of-mouth is a better determinant of brand equity for repeat passenger car buyers. The different results obtained in this study vis- à- vis those from earlier studies suggest that the cultural differences between consumers of two countries mediates the effect of the marketing efforts on brand equity creation. Again since each of the dimensions of brand equity under this study was found to positively impact brand choice, it has been posited that the probability of the consumers choosing the final brand is increased with an increase in the equity of the brand. Geographical limitation of the sample and absence of interaction of marketing mix elements amongst themselves were identified as some of the key limitations of the study.

Marketing mix elements influencing brand attitude strength: Global vs. domestic SPA brands

“…Chattopadhyay et al (2010) found that brand price had a positive effect on perceived quality, which means that consumers use high price as an important cue in quality perception, especially for global brands: the higher the price, the higher the quality. However, Korean customers tended to have a favorable attitude toward global SPA brands offering trendy merchandise at a reasonable price (Kim, 2007).…”

“…For instance, when products are available in a larger number of stores, consumers can benefit from convenience in their purchasing and services (Yoo et al, 2000;Herrmann et al, 2007). Perceived quality had a positive relationship with store image (Chattopadhyay et al, 2010), suggesting that a good store image was likely to increase positive brand attitude. Kim (2004) also found positive effects of price, store image, and advertising on the perceived quality of SPA brands.…”

“…Advertising spending is viewed as the company's investment in and commitment to its brand; thus, advertising spending is an indicator of high quality, which leads to higher brand equity (Yoo et al, 2000;Chattopadhyay et al, 2010). In this view, it is assumed that advertising often creates strong brand attitude in either a cognitive or an affective manner.…”

“…From a consumer perspective, brand response remains a complex phenomenon in the international context, and the impact of marketing elements on brand attitudes (e.g., cognitive or affective) has been widely researched (Aaker, 1996;Chattopadhyay, Shivani, & Krishnan, 2010;Goldsmith, Flynn, Goldsmith, & Stacey, 2010;Liu & Wang, 2008;Tsao, 2010). Generally, it is documented that a favorable attitude toward a foreign brand is mostly based on the country-of-origin effect (Alex, 2012;Kim & Heere, 2012;Lin, Marshall, & Dawson, 2009;Riefler, 2012;Trigui, & Giraud, 2012).…”

“…Most global SPA brands with high brand awareness are involved in standardized marketing elements across nations, whereas domestic SPA brands can customize their marketing mix for local consumers. Understanding such differences in marketing practices can help marketers develop cognitive and affective approaches into establishing strong brand equity (Chattopadhyay et al, 2010;Yoo, Dunthu, & Lee, 2000). It is valuable to explore whether and how the impact of marketing mix is different in relation to brand attitude strength and purchases across the SPA brands (e.g., global and domestic).…”