Consumer Based Brand Equity

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1. THEORETICAL FRAMEWORK Various authors (Yoo and Donthoo 2001; Keller 1993; Aaker 1991) agree that brand equity is achieved when consumers are familiar with the brand and hold unique, positive and strong associations about the brand. According to the work of Aaker (1991, 1996) and keller (1993), this brand equity consists of four dimensions: brand loyalty, brand awareness, perceived quality of brand and brand associations. For the purpose of investigating the brand equity (dependent variable) of the automotive giant, BMW, the researchers will pay close attention to the following independent variables: Brand loyalty, brand awareness and perceived quality of brand. Figure 1.1: proposed theoretical framework and hypotheses Brand loyalty Brand loyalty H1 H1 H2 H2 Brand equity Brand equity Brand awareness Brand awareness H3 H3 Perceived quality Perceived quality H1: There is a positive relationship between brand loyalty and brand equity. H2: There is a positive relationship between brand awareness and brand equity. H3: There is a positive relationship between perceived quality and brand equity. 2. INDEPENDENT VARIABLES From the figure above (figure 1.1) it can be seen that brand loyalty, brand awareness and perceived quality of brand have an influence on a brand’s equity. The following section provides further discussion of these independent variables. 3.1 Brand loyalty The success of any branding strategy largely depends on the amount of loyalty it develops among its target consumers. Brands need consumers who can make repeat purchases and who will not switch to other brands or get tempted by them. All marketing strategies and customer relationships are aimed at retaining the customers and increasing the customer’s life time values. Brands which have cultivated ardent followers are always successful. Their
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