Вы находитесь на странице: 1из 218

Retail Brand Equity, Brand Value and

Firm Performance Nexus:


An Empirical Study
of the Convenience Store Chains
in Taiwan

Wu, Hsu- Hui

A thesis submitted in partial fulfillment of the requirements of Leeds


Metropolitan University for the degree of Doctor of Business Administration

Leeds Metropolitan University Business Faculty


July 2011

Acknowledgements

This thesis was written during my employment as a corporate communication officer at the
Uni-Preseident Group, the largest food manufacturer and convenience store chains
(7-Eleven) in Taiwan, now I am their Marketing and Branding Director. Several individuals
and institutions have contributed to the writing of this thesis, and I would like to take this
opportunity to thank them.

Firstly, I would like to thank my supervisors, Professor Jim Stewart and Professor James C.
Chan, who offered me considerable direction and support throughout my studies. Dr.
Stewart, I thank for his continuing encouragement and giving me enough freedom to
carrying out my research and for welcoming my initiatives. Dr. Chan, I am indebted to him
for his great contribution to the methodology and design of this study.

I would also like to

thank Professor IIes, Harte, Holden, Rodgers, Kyriakidou, Gold and Zhang for their
supports to the research questions during the study.

I would also like to express my gratitude to my former colleagues at Carrefour, 7-Eleven,


Family Mart and B&Q, who have continually updated me about the customer trend and
professional marketing knowledge, which made this study more pertinent to the customer
demand and corporate perspectives.

In addition, I would also like to express my gratitude to my family, especially my parents.


During my DBAs ups and downs, I always had a special source of enjoyment and support.
My son Richard helped me see the light at the end of the tunnel.

Wu, Hsu Hui (Selina) , Taiwan, Taipei, July 2011

Table of Contents
Title Page ......................................................................................................... 1
Acknowledgements........................................................................................... 2
Table of Contents.............................................................................................. 3
List of Figures ................................................................................................... 7
List of Tables..................................................................................................... 8
List of Appendices ............................................................................................ 9
Abstract .......................................................................................................... 10
Candidates Declaration.................................................................................. 11
Chapter 1: Introduction ......................................................................................... 12

1.0 Introduction ............................................................................................ 12


1.1 Background of the Study ........................................................................ 13
1.2.

Knowledge Gap..................................................................................... 16

1.3.

Arguments of this Thesis ....................................................................... 19

1.4.

Research Objectives ............................................................................. 20

1.5.

Research Questions.............................................................................. 21

1.6.

Research Methodology ......................................................................... 21


1.6.1 Desk Research........................................................................... 22
1.6.2 Quantitative Approach ................................................................ 22
1.6.3 Customer Survey........................................................................ 23

1.7. Overview of the Thesis Structure........................................................... 25


1.8.

Brief Review of Work in Previous Documents........................................ 26


1.8.1 Document 1................................................................................ 26
1.8.2 Document 2................................................................................ 26
1.8.3 Document 3................................................................................ 27
1.8.4 Document 4................................................................................ 27
1.8.5 Document 5................................................................................ 28

Chapter 2: Brand Theory and Development ........................................................ 29

2.0

Introduction .......................................................................................... 29

2.1

Specific Definition of Brand for this Thesis............................................ 30

2.2

The Retail Brand Equity........................................................................ 33

2.3

The Constructs of Retail Brand Equity .................................................. 37


2.3.1 Service Quality ......................................................................... 38

2.3.2 Perceived Value........................................................................ 39


2.3.3 Customer Satisfaction............................................................... 41
2.3.4 Customer Loyalty...................................................................... 42
2.4

Retail Brand Value Dimensions ............................................................ 44


2.4.1 Brand Value to the Customers .................................................. 46
2.4.1.1 Brand as an Expression of Self ................................... 47
2.4.1.2 Brand as Risk Reducer ............................................... 47
2.4.1.3 Brand as Relationship ................................................. 48
2.4.2 Brand Value to the Firm ............................................................ 49
2.4.3 Retail Brand Value Propositions................................................ 51

2.5

Brand Value Measurement ................................................................. 55

2.6

Summary of Chapter ............................................................................ 58

Chapter 3: Research Methodology and Hypotheses........................................... 60


3.0 Introduction ............................................................................................ 60
3.1 Conceptualizing Research Framework ................................................... 60
3.2 Formulating Research Hypotheses ........................................................ 62
3.3 Reserch Methodology ............................................................................ 73
3.4 Research Desgin-Financial Research .................................................... 76
3.4.1 Empirical Sample ......................................................................... 77
3.4.2 Instrument and Measures............................................................. 79
3.4.2.1 The Hirose Model ........................................................... 79
3.4.2.2 The Profitability Measures .............................................. 80
3.4.2.3 The EVA and MVA Measures .......................................... 81
3.4.3 Application of Statistical Analysis.................................................. 83
3.5 Research Design- Customer Survey ...................................................... 86
3.5.1 Expert Review of initial Item Pool ................................................. 90
3.5.2 Mode of Questionnaire Administration.......................................... 92
3.5.3 Contents of Individual Questions .................................................. 93
3.5.3.1 Introductory Information .................................................. 94
3.5.3.2 Substantive Informationl ................................................. 95
3.5.4 Sequence of Question................................................................ 100
3.5.5 Physical Characteristic of the Questions .................................... 101
3.5.6 Questionnaire Pre-Test............................................................... 102
3.5.7 Pre-Test Protocal Interviews....................................................... 103
3.5.8 Applicatin of Statistic Analyses ................................................... 104
3.5.9 Sample Size............................................................................... 109

3.6 Summary of Chapter ............................................................................ 109


Chapter 4: Research Results and Findings ....................................................... 110
4.0 Introduction .......................................................................................... 110
4.1 Brand Value Calculation and Analysis .................................................. 111
4.1.1 Association and Variation Statistics........................................... 112
4.1.2 The Use of Hirose model Variable ............................................ 113
4.1.3 The Use of Profitability Measure............................................... 114
4.1.4 The Use of Corporate Value Measure....................................... 117
4.1.5 Correlation between EVA/MVA and BV Variables ..................... 118
4.2 Quantitative Research Outcome and Summarization............................ 120
4.3 Qualtitative Survey and Ananlysis ........................................................ 122
4.3.1 The Character of the Respondent Sample................................ 122
4.3.2 Data Reduction and Summary.................................................. 123
4.3.3 Attributes Identification and Process......................................... 124
4.3.4 Factor Identification and Labelling ............................................ 126
4.3.5 Service Quality Analysis ........................................................... 128
4.3.6 Perceived Value Analysis.......................................................... 130
4.3.7 Customer Satisfaction/Loyalty Analysis .................................... 131
4.3.8 Brand Equity Analysis............................................................... 132
4.3.9 Principal Components Analysis of Brand Equity ...................... 133
4.3.10 Scale Reliability/Validity Test .................................................... 135
4.3.11 Correlation between Brand Equity and Consturcts ................... 136
4.4 Path Analysis........................................................................................ 138
4.5 Customer Survey Outcome and Summary ......................................... 147
Chapter 5: Conclusion and Implication.............................................................. 148

5.0 Introduction .......................................................................................... 148


5.1 Financial Approach of Brand Equity...................................................... 148
5.2 Customer-Based Approach of Brand Equity ......................................... 153
5.2.1 Factor 1- Servcie quality........................................................... 155
5.2.2 Factor 2- Perceived Value ........................................................ 156
5.2.3 Factor 3- Customer Satisfaction ............................................... 157
5.2.4 Factor 4- Brand Loyalty ............................................................ 158
5.3 Implication of Research........................................................................ 159
5.3.1 Methodological, Statistical and Theoricication of Research....... 160

5.3.2 Implication of Brand Equity for Shareholder Value .................... 161


5.3.3 Marketing Implication of Retail Brand Equity............................. 161
5.3.4 Managerial Strategy Implication of Retail Brand Equity............. 162
5.4 Limition and Extension ......................................................................... 162
5.5 Summary of Conclusion and Implication............................................... 164

REFERENCE

165-189

List of Figures
Figure 1.1

Research Structure of this Thesis .............................................. 25

Figure 2.1

Relationship between Source and Outcome of Brand Equity ... 35

Figure 2.2

ACNeilsen Winning Brands Store Equity .................................. 36

Figure 2.3

Antecendents and Consequences of Brand Equity .................... 44

Figure 2.4

Customer Rational and Emotional Response to the Brand ........ 46

Figure 2.5

Multi-Domain Brand Value to the Firm ....................................... 51

Figure 2.6

Possibilities of Value Creation.................................................... 52

Figure 2.7

The Porcess of Value Creation .................................................. 54

Figure 3.1

The Cause-Effect of Brand Equity Dimension............................ 61

Figure 3.2

Research Structure of the effect of Brand Value ........................ 68

Figure 3.3

Research Structures of the Brand Equity Consturcts ................. 72

Figure 3.4

The Research Conceptual Model .............................................. 73

Figure 3.5

Questionnaire Design Process .................................................. 88

Figure 4.1

Regression Results of BV and Performance Variables ............ 121

Figure 4.2

Regression Results of BV and EVA/MVA................................. 121

Figure 4.3

The Association of BE and Constructs..................................... 137

Figure 4.4

Relationship Structure between BE Constructs........................ 138

Figure 4.5

Correlation between Customer Satisfaction and 2 Variables.... 139

Figure 4.6

Correlation between Customer Loyalty and 2 Variables........... 141

Figure 4.7

Correlation between Customer Loyalty and 3 Variables........... 142

Figure 4.8

Path Analysis Results .............................................................. 144

Figure 4.9

Complete Measurement and Stucture Model ......................... 146

List of Tables
Table 1.1 :

2010 brand value of Global and Taiwanese Top 10 Brands......... 14

Table 1.2 :

Composition of GDP and Lobor Force ........................................ 15

Table 1.3 :

Applied Research Methodology by Chapter .............................. 24

Table 2.1 :

Non-Financial Oriented Measures of Brand Performance ......... 56

Table 3.1 : Tawian Top 20 C&F Stores ........................................................ 78


Table 3.2 :

Attributes of Convenience Stores ............................................ 91

Table 3.3 :

Measures Scale of Retail Brand Equity Constructs ................... 97

Table 4.1:

Descriptive Statistics for BV and Variables ............................. 112

Table 4.2:

Regression Results of BV Variables ......................................... 114

Table 4.3:

Regression Results of Corporate Profitability Variables .......... 116

Table 4.4:

Principal Conpentent Analysis for Prifitability Variables ........... 116

Table 4.5:

Regression Results of Profitability .......................................... 117

Table 4.6:

Regression Results of EVA and MVA ...................................... 118

Table 4.7:

Pearson Correlations between EVA and BV Variables ............ 119

Table 4.8:

Pearson Correlations between MVA and BV Variables ........... 120

Table 4.9

The Characteristics of the Sampling.......................................... 122

Table 4.10: Kaiser-Rices Criteria Table .................................................... 124


Table 4.11: Factor Analysis Results of Survey .......................................... 127
Table 4.12: Pattern Matrix for Servcie Quality (Group 1) ........................... 129
Table 4.13: Pattern Matrix for Servcie Quality (Group 2) ........................... 129
Table 4.14: Pattern Matrix for Perceived Value ......................................... 131
Table 4.15: Pattern Matrix for Customer Loyalty ....................................... 132
Table 4.16: Pattern Matrix for Brand Equity .............................................. 133
Table 4.17: Principal Compentents Analysis for BE Constructs ................. 134
Table 4.18: Descriptive Statistics for BE and Constructs ........................... 136
Table 4.19: Regression Results of BE and Constructs .............................. 137
Table 4.20: Regression Results of Customer Satisfaction and 2 Variables 140
Table 4.21: Regression Results of Customer Loyalty and 2 Variables ...... 140
Table 4.22: Regression Results of Customer Loyalty and 3 Variables ...... 141
Table 4.23: Regression Results of BE and 4 Consturcts ........................... 143
Table 4.24: The Effects of BE Constructs ................................................. 144
Table 5.1 :

Overseas Investment Status of Top 20 C&F Stores ............... 151

List of Appendices
Appendices 1

Financial Statement of the Top 20 C&F Stores ................. 190

Appendices 2

Profitability Ratios of the Top 20 C&F Stores .................... 198

Appendices 3

EVA of the Top 20 C&F Stores.......................................... 201

Appendices 4

MVA of the Top 20 C&F Stores ....................................... 205

Appendices 5

Questionnaire................................................................... 209

Appendices 6

Brand Value of Taiwans Top 20 Chain Stores................... 213

Abstract

Most of the extant research on brand equity has looked at the issue from the perspective of
either the consumer or the corporation. This research proposed an integrated approach
to brand equity management by utilizing both financial and customer-based approach.
Studies have validated the effect of brand equity on the value of the firm and addressed the
capital market effects of intangible associations such as economic value added and market
value added.

Yet, no sufficient evidence exists on the impact of corporate profitability.

This study investigated the impact of retail brand equity on corporate financial performance
and the value drivers in convenience store chains. The research built on three main pillars.
First, the research investigated the effect of retail brand equity and the relationship with
corporate profitability/EVA/MVA.

Secondly, the research identified the constructs and

attributes of retail brand equity based on customers perspectives. Thirdly, the research
built a causal structure model to link the retail brand equity constructs to brand financial
performance.

The results showed: 1) Retail brand equity has effect of price prestige driver and loyalty
driver.

2) There is a contemporaneous relationship between band value, profitability, EVA

and MVA.

However, the impact of brand value on profitability is not significant. 3) Service

quality, perceived value, customer satisfaction and brand loyalty are all positively related to
retail brand equity; especially perceived value shows 0.712 direct effects on retail brand
equity.
Keywords: retail brand equity, brand value, brand constructs, brand attributes, EVA, MVA,
corporate profitability, perceived value, customer satisfaction, brand loyalty, convenience
store chains

10

Declaration

I confirm that the thesis is my own work; and that all published or other sources of material
consulted have been acknowledged in the text or the bibliography notes.

I confirm that the thesis has not been submitted for a comparable academic award.

11

Chapter One- Introduction

1.0 Introduction
This study investigates brand equity, brand value and the role in retail companies
performance for convenience store chains in Taiwan. The motivation for the research is
that with greater understanding of pertinent brand equity and brand value, marketing
strategies can be optimized and brand management facilitated. This study aims to
conceptualize, measure, and manage brand equity in a manner that drives corporate brand
value and financial performance by embracing an empirical approach. The important
contribution of this study is to develop a cause-effect conceptual framework to link
customer-based brand equity, brand value and corporate performance in a coherent
framework to illustrate the value creating process of brand equity and the value drivers for
convenience store chains. This framework may assist convenience stores to understand
how best to leverage customer-based brand equity to generate brand value and add to
academics the existing and relatively limited evidence in this area.

This chapter presents a general introduction to the research project on the impact of brand
equity and brand value. Section 1.1 highlights the research background and motivation.
Section 1.2-3 affects the discussion of knowledge gap and arguments of extant research
and theory. This gap provides the impetus for the research. Following from above, the
research questions and aims were set in section 1.4-5. Section 1.6.1-4 discusses the
formulation of a methodological framework that is appropriate for the investigation and
designing suitable operational processes for instrument development.

Section 1.7

illustrates the structure of this study including the development of a valid and reliable
instrument for measuring brand equity and linking it to brand financial performance.
Finally, a path analysis is drawn from the analytical findings to investigate the cause-effect

12

relationship between brand equity constructs. 1.8.1-5 briefly reviews works in previous
documents.

1.1 Background of the Study


This study has noted that practitioners around the globe have started observing keenly the
state of brand value and customer-based brand equity research. The interest is based on
the economy has become globalization, technological developments, outsourcing and
e-business, forced companies to compete more intensely and brands have become
important in differentiating products and services, creating and sustaining competitive
advantage and maintaining customer loyalty (Whitwell, 2010). Studies of The Best Global
Brands by Interbrand1 and Business Week showed that the overall decline of aggregate
brand value from 2008 to 2009 was 4.6%, whereas the New York Stock Exchange (NYSE)
Composite Index fell over the same period at an annualized rate of 34%. Similarly, the
aggregate value of the top 20 Taiwanese brands mirrored this trend with a fall of 2.5%
(Interbrand, 2009). In 2010, while the global economy made only partial steps towards
recovery (the growth of Taiwans Gross Domestic Product GDP for 2009 was 4 %), the top
20 Taiwanese brands returned strong and delivered 7.9% impressive growth of brand
value (Interbrand, 2010). However, the brand value of Taiwan Top 10 Brands companies
counted by interbrand valuation methodology only presented 8.12% of the companies
market value while the Global Top 10 brands accounted for 40.58% which was far more
behind the global trend. Based on the recognition of brand power, brand value creation
and brand management has become a vital niche for Multinational Corporation in Taiwan.
Table 1.1 shows the brand value of the Top 10 global brands and Taiwanese brands in
2010.

Interbrand: Established in 1974, the worlds largest brand consultancy.

13

Table 1.1: 2010 Brand Values of Global and Taiwanese Top 10 Brands.

Global

Brand Value

Taiwanese

Million(US $)

Top 10 Brands

Million(US $)

1.

Coca Cola

70,452

1.

Acer

1,401

2.

IBM

64,727

2.

HTC

1,371

3.

Microsoft

60,895

3.

Asus

1,285

4. Google

43,557

4. Trend Micro

1,228

5. GE

42,808

5.

1,066

6.

McDonald's

33,578

6. Want-Want

482

7.

Intel

32,015

7.

391

8.

Nokia

29,495

8. Giant

291

9.

Disney

28,731

9.

276

26,867

10. Transcend

10. HP

Top 10 Brands

Brand Value

Master Kong

Maxxis

Synnex

240

(Source: Interbrand, 2010)

Over the past two decades, Taiwan has successfully evolved itself from dependence on
foreign imports to local Original Equipment Manufacturer (OEM) production, and is
becoming a global leader in many high tech (IT) manufacturing industries. (TAITRA2, 2008).
Exports, led by electronics and machinery, generate 70% of Taiwan's GDP growth, and
have provided the primary impetus for industrialization. This heavy dependence on exports
makes the economy vulnerable to downturns in world demand: January-October 2009
exports were down 27% year-on-year, contributing to a 4% contraction of the island's GDP

TAITRA: Taiwan External Trade Development Council.

14

in 2009 (CIA3 World Face book, 2010). The per capita GDP of Taiwan has been forecasted
to reach US$17,927 that is compared to Mainland Chinas of only US$3,999, its costs
associated with labor and other overhead factors were no longer competitive in
labor-intensive low-value industries (IFS4, 2010). Therefore, Taiwan cannot but to adjust
its developmental strategy to the higher-end goods and services sectors. From 2007 to
2009, the value of the service industry takes up from 65.55% of the GDP to 68.72%, and
58% of employee jobs were held within the service sector (MOEA 5 , 2010). Service
industries have becoming the major driving force of the Taiwanese economy. Table 1.2
shows the composition of GDP and labor force by sector estimated in 2009.

Table 1.2: The Composition of GDP and Labor Force by Sector


In Taiwan (2009 est.)
Industry

GDP

Labor Force

Agriculture

1.7%

5.1%

Industry

29.58%

36.8%

Service

68.72%

58%

(Source: MOEA)

Most of Taiwanese service sector comes from domestic demands. The technological
application of the service industry, developments and general application of IT technology
and integration of logistics techniques have led Taiwans business service sector towards
chain and franchise (C&F) stores development, specializations of the target market and
large-scale operations. This business model is the best way for companies to increase
3

CIA: Center Intelligence Agency

IFS: International Financial Statistics

MOEA: Ministry of Economic Affairs

15

market share (TIER6, 2008). Over 90 % of Taiwans economy is composed of small and
medium-sized companies. A large portion of these companies makes up Taiwans C&F
industry. With over 30 years experience from the past and moving into the future, Taiwanese
retail C&F brands have established a successful business model by good commercial
location, giant chain networks, rapid promotion and a well-developed logistics foundation.
By 2007, Taiwan had one of the highest densities of convenience store chains in the world
(TAITRA, 2008).

Until 2008, 2,242 C&F brands with a total of 107,305 chain stores in Taiwan existed. The
increased competition in service markets has made many companies realize that a strong
service brand is an essential part of their competitive advantage (Leslie and Malcolm, 1992).
Kapferer (1988) addressed that the brand today is built through retail. A strong brand can
differentiate a store from the competition (Floor, 2006). With the coming of a
consumer-dominant age, brands have become the main drivers of intangible value and
long-term growth profitability. Therefore, what value brands hold and where and how to
track brand value drivers have been challenging for Taiwanese chain and franchise stores
(TIER, 2007).

1.2 Knowledge Gap


Strategically, strong brands represent a key component of competitive advantage and
function as the main source of a retail companys future earnings (Baldauf et al., 2003).
However, much of the previous literature on retail brands has been approached from the
viewpoint of the results or output, such as: the profit impact of promotion,

customer

behavior; retail reactions to competitors; and supplier reactions to retail brands, even

TIER: Taiwan Industry Economic Services

16

though retailers themselves influence the consumer decision making process, through
differentiated or well-established own brand strategies.

Therefore, little literature

discussed what constructs retail brand equity and how it generates brand value.

Brands are not capitalized on the balance sheet in most countries, which counteracts a
long-term management focus on the value of any internally-developed brands. Most
corporations focused on aggregate, financial accounting-based measures that have been
criticized being useless for marketing decision making. Therefore, an argument and
knowledge gap was raised to justify which performance indicators are crucial to the
long-term brand equity management of retail companies.

Over the past two decade, brand equity has been a much-debated topic in brand
management for both practitioners and academics. Two opposing perspectives or schools
of thought have examined brand equity based on either the financial accounting approach
(or firm-based) (Farquhar et al., 1991: Simon and Sullivan 1993; Kapferer 1997, Doyle
2001), or the customer-based approach (Keller 1993; Srivastava and Rueckert 1994; Chen
2001).

The financial perspective, emphasize the value of the brand to firms. Simon and Sullivan
typify this perspective and define brand equity as the incremental cash flows that accrue to
branded products over and above the cash flows which results from the sale of unbranded
products. Most financial assessment uses a top-down approach that assumes a direct
relationship between the firms profitability and brand equity, where strong financial results
mean a strong brand, and, conversely, negative earnings may signal poor brand equity
(Fetscherin and Mark, 2008).

However, in this single cause-effect relationship, the

17

approach fails to include key factors within the marketing mix7 that is a powerful tool to
obtain sustainable competitive advantages (Lin and Kao, 2004; Fetscherin and Mark,
2008).

Cravens and Binder (2003) stressed that cash flow and short-term parameters are what
firms usually employ as indicators of performance, without considering long run value of
brand assets (Leuthesser, 1988). Heding et al. (2009) addressed that financial approach is
a suitable planning and execution tool to evaluate corporate short-term marketing activities,
but the strategic value and potential for brand building of marketing mix tools is
questionable.

Since the market trend was increasingly driven by consumerism and

branding, understanding how people make consumption decisions and using information
to better serve consumers has become a core competitive advantage of marketing.
Therefore, Keller (1993) profoundly changed the concept of brand equity from sender end
to consumer perspective.

Keller (1993) proposed the first conceptual model of customer-based brand equity as the
differential effect of brand knowledge (brand awareness and brand image) on consumer
response to the marketing of the brand (Fetscherin and Mark, 2008).

Aaker and

Joachimsthaler (2002) defined brand equity as the brand assets (or liabilities) linked to a
brands name and symbol that add to a product or service which has four dimensions:
awareness, associations, perceived quality and brand loyalty. Most customer-based
perspective takes a bottom-up approach to measure brand equity by mounding the brand
associations held in the consumers minds. (Fetscherin and Mark, 2008; Heding et al.,
2008).
7

Marketing mix: E. Jerome McCarthy proposed a 4 P concept in 1960, which has seen wide use in.
The four Ps are often referred to price, product, promotion and place.

18

While current literature has focused on building and conceptualizing brand equity, there
has been no consensus on how to measure it or on what constructs to include in the
measurement process (Mackay, 2001).

Abele (2008) criticized that there are limitations in

the literature as few models explain the process of realization of customer-based brand
equity (e.g. Rust et al, 2000; Doyle, 2004; De Bonis et al, 2003). These models lacked
either market orientation for benchmarking or a monitoring process for determining the
impact of value strategies on customer performance measures and company performance
measures. Therefore, a simultaneous financial- based and consumer-based approach to
measuring and managing brand equity will not only have significant implications for retail
companies attempting to improve the equity of brands, but will also useful in developing a
more complete picture of the long-term brand value creating process.

1.3 Arguments of this Thesis


After an overview the existing research, this study proposes the following arguments.
Firstly, the brand equity has a positive impact on corporate value and is a well-documented
phenomenon in product-oriented industries such as high-tech, notebook and fast moving
consumer goods (FMCG), however, the existence of this relationship has not been
investigated in the convenience store chains. Secondly, limited studies of brand theory or
research has linked brand equity to brand financial value or business performance. The
changing role of the brand within customer and company indicates that an integrated
method of exploring brand equity is required.

In Chapter 2 and 3, an integrated

conceptual framework linking brand equity, brand value and corporate performance will be
explored and highlighted. This framework will provide marketers a better understanding of
a cause-effect relationship between brand equity and retailers performance. Thirdly, little
agreement over how brand value should be measured exists. This is in line with the
argument that a one size fits all solution in branding is not plausible (Mitchell, 2000).

19

Therefore, In Chapter 4, a test of the Hirose brand valuation model application in retail
store chains will be conducted and outlined. Fourthly, less discussion about the important
drivers of customer-based metrics exists. The study argues that a noticeable shift in
marketing paradigms (e.g. Grnroos, 1994; Denison and McDonald, 1995; Brodie et al.,
1997) is changing the criteria according to which consumers are likely to base their decision
preferences.

Therefore, a market-based method of exploring customer-based brand

equity is required (Heath, 1999; Supphellen, 2000; Schnfelder, 2004).

In Chapter 2 and

3, the dimensions of retail brand equity will be conceptualized and developed.

1.4 Research Objectives


The following aims were formulated in light of the arguments outlined above:
1. To conceptualize the cause-effect relationship between brand equity, brand value and
corporate performance to explore how retail brand equity generates value.
2. To gain an understanding of correlations between brand equity and corporate
profitability / value in convenience store chains.
3. To explore the dimensions of brand equity based on customers perceptions, which is
the core and useful for retail brand management and investment.
4. To link causal constructs of brand equity to predict corporate financial performance.

To summarize, this study makes a contribution to bridge the gap in the extant research by
developing an integrated conceptual framework that link customer-based brand equity with
brand financial performance.

A further main contribution is to indicate the

constructs/attributes of retail brand equity in the convenience store chains. This studys
results will be practical to practitioners and researchers to help gain a better understanding
of the impact of retail brand equity on corporate profitability, EVA and MVA. The findings also
contribute to clarifying the implementation and effectiveness of brand equity development

20

and value-based marketing strategies.

1.5 Research Questions


This study investigates the impact of brand equity and the relationship between corporate
profitability (i.e. return of asset ROA, return of investment ROI, gross margin GM, net
margin NM, pretax margin PM), market value added (MVA), and economy value added
(EVA) in an empirical retail C&F market study. In particular to explore the attributes of
brand equity reflected by customers perceptions to predict brand financial performance.
The research adopts a two-tier approach. The first tier involves a quantitative calculation
and analysis of brand value of leading brands within a case study market. This research is
presented in Chapter 4. The second tier of the research comprises the consumer-oriented
empirical research. Concerning the debates, issues of brand equity that are presented as
part of the literature review in Chapter 2, on-line questionnaires were employed to explore
attributes affected customer purchasing preferences and attitudes. The results provide
marketing practitioners a better understanding of managerial insight related retail brand
equity/value-relevant questions as below:
1. What is brand, brand equity and brand value?
2. How does brand equity generate value for a store?
3. What is the relevance between band equity, brand value, corporate profitability, EVA
and MVA?

4. What are the constructs and attributes of retail brand equity?

1.6 Research Methodology


This study adopted two-step approach. The first phase is the stage of effects using a
financial approach to investigate the impacts of brand value and the relationship with stores
profitability, EVA and MVA.

The second phase is the stage of customer-based

21

investigation utilized customer survey to identify the constructs/attributes of brand equity


and link them to brand financial performance and value. Therefore, the applied research
methodology in this study is outlined: desk research, quantitative approach and customer
survey. Table 1.3 provides an overview of the applied research methodology in this study.

1.6.1 Desk Research


Within the scope of desk research, relevant literature to the research objectives and
questions were built to ensure a fundamental basis for the identification of the dimensions of
brand value and brand equity and for the development of the brand value creating process.
In this study, the following sources were employed:
-

online sources, such as Internet, databases, etc;

offline sources, such as books, journals, theses, etc; and

public statistical offices.

The desk research covered literature in the field of marketing, accounting, financing, brand
management, brand valuation, value management, customer equity management, and
strategic management and convenience store management theories.

1.6.2 Quantitative Approach


While brand value calculation and customer survey generated rich, detailed data and
focused on processes of reasons why, the quantitative method could support to analyze
correlations between variables, findings and confirm the validity and reliability of the data.
The statistically procedures comprised:
-

Factor analysis (reducing the data set to those dimensions which appear to best
measure profitability),

Correlation

analysis

(investigating

the

relationship

between

dependent

and

independent variables).

22

Multiple regression analysis (investigating the relationship between variables i.e. drivers
of brand value, corporate profitability, EVA and MVA, brand equity constructs).

Path analysis (analyzing causal relationships between latent constructs of brand


equity).

Reliability analysis (assessing the internal consistency reliability of each dimension of


brand value and customer-based brand equity),

Content validity analysis (standardizing the measurement scales),

1.6.3 Customer Survey


An on-line questionnaire was used to explore the constructs/attributes of brand equity
based on customers preferences. The first phase was to investigate the constructs of
retail brand equity based on SERVPERF, Petrick (2002), Day (1984) and Gronholdt et al.s
(2000) measure scale. The survey results were statistically analyzed as listed in 1.6.2 to
verify their reliabilities and the significance to brand equity. Finally, path analysis was
employed to analyze the cause-effect relationship between brand equity constructs.

Table1.3 shows the applied research methodology for this study.

23

Table 1.3: Applied Research Methodology by Chapter

Chapter

Research Methodology Applied

Chapter 1 Introduction

Desk research

Chapter 2- Brand, brand equity, retail

Desk research

brand equity, brand value, and corporate


profitability theory development from the
literature
Chapter 3- Research methodology and

Hirose brand valuation model,

hypotheses setting

EVA, MVA,
Corporate profitability ratio
SERVPERF measure scale
Petricks (2002) measure scale
Day s(1984) measure scale
Gronholdt et al.s (2000) measure scale.

Chapter 4- Research Results and Findings Descriptive Statistic


Pearson correlation analysis,
Multiple regression analysis
Factor analysis, Path analysis
Reliability and validity analysis
Chapter 5- Discussion , managerial
implications and future research

24

1.7 Overview of the Thesis Structure

Aim and Scope of Thesis

Definition of brand,

Definition of retail

Review of prior

brand equity and

brand equity and

research of brand

brand value

convenience store

value, brand equity

chains

Philosophical

Development of research

orientation of study

project and design

Results of

SPSS

Results of

Financial based

Statistical Analysis

Customer-based

data analysis

survey analysis

Contributions to
practitioners and
academics

Figure 1.1: Research Structure of This Thesis

25

1.8 Brief Review of Work in Previous Documents


1.8.1 Document 1
This report started from the research motivation and study background. Through an
overview of the macro economy environment of industry and nation, a clear research aim
was set. The report was divided into eight sections.

1.1-3 introduced the research

motivation, the macro economy of Taiwan, the retail industry and the convenience store
chain and franchise industry in Taiwan. 1.4 outlined the research questions and topic. 2.1-2
identified the purpose and goal of this study. 2.3-4 provided the research design and
approach in section.

1.8.2 Document 2
This report provided more specific descriptions of research questions, hypotheses and
methodology. The overview included literature about the nature of brand value and drivers,
research design, the development of the research instrument and data collection. This
document also entailed the operational process of the main study and data analysis
methods.

The report was divided into five sections. 1.1-2 updated the knowledge of industry and
retail business trend. 1.3 updated the research questions and developed five hypotheses.
1.4 briefly reviewed brand related literature including brand equity, brand valuation and
seven typical brand approaches. 1.5 briefly introduced brand measurement method and
corporate performance evaluation methods. The Hirose valuation model, Economic value
added model (EVA), market value added (MVA) model were reviewed in this section. 1.6
discussed the sampling frame and data analysis technique.

26

1.8.3 Document 3
This chapter reviewed and discussed the literature and evidence about the nature and
meaning of brand and brand value. The chapter was divided into six sections. Section 1
introduced arguments of extant research and literature. Section 2 examined what is Brand.
The section traced the origin and development of brand concept. Section 3 discussed the
brand equity concept based on multifaceted definitions and perspectives from academics
and practitioners. Section 4 focused on the brand value and benefits that may accrue to
firms and stakeholders. How consumers benefit from their relationship with a brand and
what are the value drivers that affect customer behaviors and corporate performance were
discussed. The benefit of branding was explored further by looking at different approaches
to brand valuation in section 5. Three brand valuation approaches: cost approach, income
approach and conjoint approach to measuring brand performance were explored. Section
6 overviewed the definition and format of the convenience store C&F Industry. Finally, in
section 7, a cause-effect conceptual framework was established to demonstrate the
relevance between brand equity, brand value, and corporate performance.

1.8.4 Document 4
This report demonstrated the results of an empirical investigation of brand value and
customer-based value drivers in chain and franchise stores. The chapter was divided into
six sections. Section 1 overviewed the research arguments and questions.

Section 2

discussed the impetus for re-conceptualizing the concept of linking brand value, brand
equity and customer equity in a coherent framework. A conceptual explanation for the
measurement of brand equity was examined and the research hypotheses were developed
from the propositions discussed earlier in the chapter. Section 3 overviewed the Hirose
valuation model, MVA model, EVA model, corporate profitability ration model. Section 4
accessed the application of the Hirose valuation model and evaluated the six research

27

hypotheses relating to the consequences of Hirose model, MVA, EVA and the Profitability
ratio model. In addition, section 5 offered a general discussion on the consequences of
research hypotheses.

Based on the results of measurement, we discussed the

applications of this research and the contribution to the body of knowledge and industry on
customer-based brand equity and branding strategy. In section 6, a reflective evaluation of
the strengths and weaknesses of this study was presented, thereby giving an indication of
avenues for the future enhancement of brand management research.

1.8.5 Document 5
In the study of document 4 indicated empirical results that brand value have a price
prestige driver and loyalty driver based on ten listed chain stores five-year average
financial statement. In document 5, this study enlarged the data panel to twenty companies
who fulfill the chain store definition. The purpose of using larger cross-industry samples
should not bias the empirical results. In addition to the above financial approach of brand
value, this study also adopted Rusts customer-based approach to investigate the
constructs of brand equity in Document 4.

However, no structured questionnaire

investigated the cause-effect relationship between brand equity and brand value.
Therefore, this study formulated four hypotheses to investigate the constructs of retail
brand equity and the cause-effect relationship between retail brand equity and brand
value/corporate financial performance in document 5. This study hypothesized service
quality, perceived value, customer satisfaction and customer loyalty as the four main
constructs and tested that the hypotheses utilized in the structural equation model.

Finally,

the study conducted a complete measurement based on both financial and


customer-based approaches and demonstrated a structural model that linked causal
constructs of brand equity to predict corporate financial performance for convenience store
chains.

28

Chapter Two- Brand Theory and Development


from the Literature

2.0 Introduction
The growing importance of brand in the market place is equally matched by a significant
increase in the amount of published literature on various aspects of the concept (Abimbola
2003). This Interest is reflected in the works of scholars such as Aaker, (1991, 1996); de
Chernatony (2001); Keller, (1993, 1998); and Kapferer (1997, 2001), among others. In
practice, brand also reflects the dynamic and ongoing dialogue between companies and
customers (Frank, 2001). Salinas and Ambler (2008) analyzed two purposes of brand
research in two general categories: technical purposes and other brand management
purposes. Brand studies with technical applications are generally focused on a value at a
given point in time such as trademark and royalty. Studies for management purposes aim to
measure the brand impact on the corporate performance and demand driver analysis or
brand strength employed for restructuring brand portfolios, performance evaluation and
budget allocation (Salinas, 2008).

This study investigates retail brand equity/brand value indicators and their relationship with
corporate performance/EVA/MVA for management purpose in convenience store chains.
In document 3, we had explored multi- dimensions concepts of brand, brand equity and
brand value from academics and practitioners. This chapter will focus on the concept and
definition of retail brand equity. What are the main constructs of retail brand equity that
generate value and affect corporate performance?

The aim is to conceptualize a

adequate dimensions of cause-effect value creation framework that will comprehensively


describe retail store domain.

29

This chapter is divided into seven sections. Section 2.1 offers a specific definition of brand
in relation to this research. Section 2.2 examines the role of retail brand equity. Section 2.3
explores the constructs of brand equity for retailers. Section 2.4 focuses on the value that
may accrue to firms as an outcome of branding strategy. In this section, how consumers
benefit from their relationship with a brand is discussed. The value of branding is explored
further by looking at a non-financial approach to measuring retail brand performance in
section 2.5. Section 2.6 is a summary and conclusion to the chapter.

2.1 Specific Definition of Brand for This Thesis


Brand is sometimes seen in terms of identifications, brand name and long-term
communication elements. It is also regarded as added value that enhances the intrinsic
value of a product (Farguhar, 1989). According to de Chernatony, brands are complex
entities that can be simplified to the level of functional and emotional values (de
Chernatony, 2001). This complexity makes an in-depth review of the nature of brand an
important consideration for this research on brand value and value drivers.

The brand is and has been defined in many different ways over the years, depending on the
perspective from which the brand is perceived (Heding et al., 2009). A traditional definition
of a brand was: the name, associated with one or more items in the product line, which is
employed to identify the source of character of the item(s) (Kotler 2000, p.396). The
American Marketing Association (AMA) defined the brand in 1960 as:

A brand is a name, term, sign, symbol, or design, or a combination of


them, intended to identify the goods and services of one seller or group
of sellers and to differentiate them from those of competitors.

30

This definition resonates with the historical role of branding as identification of ownership
(Murphy and Hart, 1998). The ownership explanation fits well with the production era
marketing. However, brands today are much more than that. Hallbery (1995) criticized
that the concept reflected in the AMA definition can simply be called the traditional
branding concept of a brand. This defines focuses on the differentiability of products
achieved through brand.

However, it is important to look deeper into the meaning of a

brand as the basis for creating continual value for the consumer. Levitt (1960) justified
that a brand is more than a product; because dimensions can exist that differentiate each
one in some manner from other products designed to satisfy the same need. These
differences may be rational and tangible-related to product performance of the brand or
more symbolic, emotional and intangible-related to what the brand represents (Keller, 1998).
In keeping with the notion that a brand embodies many parts, Keller (1998) defines brand
as:

A brand is a set of mental associations (awareness, attributes, benefits,


image, thoughts, feelings, attitude and experience) held by the
consumer, which adds to the perceived value of a product or service.

Kellers customer-based concept observed that the uniqueness of brands is based on the
perception in the mind of the customer; the product itself is left out of brand scope (Fournier,
1998). De Chernatony (1992) perceived a company, which fails to think of business in
terms of customer benefits rather than in terms of physical products, is in danger of losing
competitive position in the market. De Chernatonys centre concept is putting the customer
at the centre of the business. Therefore, a broader customer-based definition of a brand
defined by de Chernatony and Keller as below:

31

A successful brand is an identifiable product, services, person or place,


augmented in such a way that the buyer or user perceived relevant,
unique added values which match their needs most closely.

(De

Chernatony 1992).

In the early 20th century, more financial perspective of a brand existed also included internal
and organizational processes as:

Brand is viewed as simply a set of attributes delivering functional,


emotional and self-expressive benefits to the customers (Aaker and
Joachimsthaler, 2002).

A Brand is related to a physical product or service transforming idea


that converts the tangible into something of value (Ind, 2005).

Many people know what a brand is because they can immediately come up with an
example of a typical brand. In terms of definition, however, a difficulty exists to have one
all encompassing definition that will satisfactorily explain the concept of brand (Abimbola,
2003). Kapferer (2001) observed that the inability to come up with a singular definition
reflects the complexity that is inherent in any attempt to define a concept, which in reality
may mean different things to many people. Kapferer (2001) went further to say that:

It is as if any definition that came to mind would not be complete.


Some people talk about the name by which a product is known, others
about added value, image, expectation, and values, still others about
the differentiating mark of the product and consumer badge. In fact

32

they are all right in their own way - a brand is all of these things
simultaneously. (Kapferer, 2001, p.3)

Building on the issues discussed above, a specific definition of brand is offered in this paper.
Following Murphy (1990) and Keller (1998), this thesis defines brand as:

A brand is a blend of attributes, both tangible and intangible, which are


relevant and appealing, and which meaningfully and appropriately
distinguish one brands uniqueness from another held by the perceived
value from consumers.

How then could a firm develop a brand with these attributes? The next section explores the
strategic attributes- brand equity and the value drivers presented by extant research and
literature.

2.2 The Retail Brand Equity


Along with the evidences that brands have value added and non-tangible assets and cash
flow, the concept of brand equity is developing to link brand assets and liabilities to a brand,
name and symbol that add to or subtract from the value provided by a product or service the
firm and /or to that firms customers (Aaker, 1991).

Brand equity, as first defined by Farquhar (1989), is the added value, with which a given
brand endows a product. High brand equity implies strong competitive advantage, which
firms can charge a premium price; an increase in customer demand exists; better trade
leverage exists; margins can be greater; and his company becomes less vulnerable to
competition (Bendixen et al., 2003).

In other words, high brand equity generates a

33

differential effect, higher brand knowledge, and a larger consumer response (Keller,
2003a), which normally leads to better performance, both from a financial and a customer
perspective. The underlying conceptual logic of strong brand equity is an asset that is
expected to enhance customer value, increase customers purchase intentions, and
increased the corporate market performance.

Brand equity is a multidimensional concept and a complex phenomenon. Keller (2002)


separated it into two components: awareness and association.

Aaker (1991, 1996)

grouped it into five categories: perceived quality, brand loyalty, brand awareness, brand
association, and other proprietary brand assets such as patents, trademarks, and channel
relationships. These components have been widely adapted to measure customer-based
brand equity in previous studies.

In summary, compared to the definition of brand equity

from a financial perspective as the total value of the brand that is a separable asset when it
is sold or included in a balance sheet (Feldwick, 1996), customer-based brand equity is
defined from the perspective of the customer and is based on consumer knowledge
(Washburn and Plank, 2002).

Brands play an important role in the retail market, and provide valuable benefits to retailers
as well as customers. Recently, more retailers have seen the importance of branding and
have recognised the need to adopt distinctive positioning within their marketplaces.
However, the drivers of brand equity for retailers are often misunderstood and unclear
(ACNielsen, 2003).

ACNielsen (2003) conducted a shopper trend study based on 12 Asia Pacific countries;
tackled store equity (specific to retail chains) measures the strength of the store brand by
examining the extent of consumer loyalty, and their willingness to pay a premium to the

34

store. John Roberts proposed this conceptual approach. Roberts adopted the approach
of Kellers (1993) to relate brand equity to the rich literature on consumer behaviour using
Lavidge and Steiners Hierarchy of effects model (Roberts and Lilien 1993).

Keller

considers brand equity in terms of consumer knowledge (sources of brand equity) and the
actions that the knowledge allows the firm to undertake (outcomes of brand equity). The
brand knowledge consists of the level of brand awareness (both recognition and recall),
brand image, perceived quality, and customer loyalty. Roberts then developed a
conceptual framework that shows a typical decision process that consumers may
undertake as shown in Figure 2.1.

Need

Information

Arousal

Search

Awareness

Evaluation

Purchase

Post
Purchase

Preceptions

Consideration

Preference

Category

Sources of

Outcomes of

uity

ty

uity

Figure 2.1: Relationship between Sources and Outcomes of Brand Equity Model
(Source: Roberts, 1998)

Kellers sources of brand equity correspond closely to information search stage of


consumer decision making, while his outcomes capture behaviors that sources lead to (e.g.
word of mouth recommendations, repeat purchasing, higher priced premium chargeable
and extendibility). The need arousal stage allows customers to consider the equity of the

35

category as well as that of the brands. In developing markets or for new categories, this is
important. Additionally, to add a consideration stage may be useful since not all aware
brands may be considered and the determinants of consideration may be different to those
of preference and choice (Gensch, 1985).

Roberts developed a model that calibrates and relates consideration of source and
outcomes of consumer-based brand equity as the models two construct sets. Outcome
of brand equity can be measured by the number of consumers recommending the brand,
those for whom it is bought most often or their favourite brand, the price premium or
reservation price that the brand commands, and extendibility (e.g. see Keller 2003 pp
104-112). The sources of brand equity, awareness, customer loyalty, perceived quality
and brand image, can then be related to this outcome construct to understand the drivers of
brand equity.

ACNielsen adopted Roberts concept to develop Winning Brands store

equity model as shown in Figure 2.2.

Sources
What people know

Awareness (%)

Outcomes
What consumers are willing to do

Emotive Loyalty

Consideration (%)
Associations (%)

Preference
Recommendation

Price Premium

Willingness to pay
price premium

Associations (%)

Store Location

Willingness to travel

Associations (%)

Figure 2.2: ACNielsen Winning Brands Store Equity Model


(Source: ACNielsen, 2001)

36

This study will adopt ACNielsens Winning Brands store equity model as the fundamental
conceptual framework that illustrates the cause-effect relationship between brand equity
and brand value.

2.3 The Constructs of Retail Brand Equity


Van et al. (2005) argued that although dimensions such as brand awareness, perceived
quality, brand image, brand association and brand loyalty are conceptualized as part of
customer-based brand equity (Aaker, 1993; Keller 1993; Kim and Kim 2003; Yoo, et al,
2000), only a few factors appear directly transferable to retail branding. Therefore, Van et
al. (2005) proposed 1) brand association 2) perceived value 3) brand satisfaction 4) brand
trust and 5) brand loyalty as the constructs of retail brand equity.

Huribut (2008)

addressed that a stores brand equity is not just something that products like Pampers,
Kleenex and Band-Aid have built up over the years, but also about the image that stores
like Wal-mart, Home Depot and Best Buy have built over time. The brand is the store, and
the store is the brand. Therefore, the stores brand equity is the sum of many critical
elements including strategic positioning, merchandise assortments, visual merchandising,
pricing, customer service and marketing.

7-Eleven chain stores (2006): What really

makes us the leader is our focus on creating customer value through world-class quality
service, attentive to consumer behavior and provide services that are turned into
customers' needs to ensure 100% customer satisfaction. The customer-oriented driving
force has decreased emphasis on short-term transactions and has increased focus on
long-term customer value metric, including customer relationships, customer satisfaction
(Oliver, 1980), market orientation (Narver and Stanly 1990), and customer value (Bolton
and Drew, 1991).

This research reconstruct service quality, perceived value, customer satisfaction, customer

37

loyalty as relating to a higher order construct of retail brand equity (Yoo et al., 2000, Yoo
and Donthu, 2001, Kim et al., 2003).

2.3.1 Service Quality


Turban et al., (2002) addressed that customer service is a series of activities designed to
enhance the level of customer satisfaction that is, the feeling that a product or service
has met the customers expectation. Customer service is normally an integral part of a
companys customer value proposition. The service quality variables identified by
Parasuraman et al., (1988) are reliability, responsiveness, competence, accessibility,
courtesy, communication, credibility, security, understanding and tangibility. An important
theory approach for investigating the service quality is SERVQUAL Analysis (Wisner and
Corney, 2001). They defined service quality as a global judgment or attitude, relating to the
superiority of the service, and explicated as involving evaluations of the outcome and
process of service act. In line with the proportions put forward by Gronroos (1982), Smith
and Houston (1982), Parasuraman et al., (1988) explained and operationalised service
quality as a difference between consumer expectations of what they want and their
perceptions of what they get. Based on this conceptualization and operationalization, they
proposed a service quality measurement scale called as SERVQUAL scale. The Validity
of the difference between perception and expectation (P-E) measurement framework has
also come under severe criticisms due to problems with the conceptualization and
measurement of expectations components of the SERVQUAL scale.

Cronin and Taylor (1992) provided SERVPERF scale to corroborate the superiority of their
performance only instrument over disconfirmation-based on SERVQUAL Scale. In
equation form, it can be expressed as:
k

38

i ij
j=1
SQ =P
Where
SQi = perceived service quality of individual i.
k = Number of attributes / items
P = Perception of individual i with respect to performance of a service firm on attribute j.
The SERVPERF scale is found to be superior as the efficient scale and more efficient in
reducing the number of items to be measured by 50%. (Hartline and Ferrell,1996; Babakus
and Boller, 1992; Bolton and Drew, 1991). This research will utilize SERVPERF scale to
construct the stores service quality based on customers perception.

2.3.2 Perceived Value

Webster (2000) indicated that a strong brand provides a number of benefits to retailers
such as pre-established demand, providing a good image of the retailers with the customer
and providing a relationship of trust and creditability with the customer. This aspect is the
concept of consumer perceived value in the brand equity model of Baldauf et al. (2000),
whereby consumer value is defined as the customer overall assessment of the utility of
the product based on perceptions of what is received and what is given (Zeithaml, 1998).

The received factor is the benefits a purchaser obtained from the vendors contributionand the given factor is the buyers costs (financial and/or non-monetary) of receiving the
offering (Dodds, 1991; Zeithmal, 1988). Many of the precedent studies have emphasized
product quality as the primary take factor and price as the give factor (Grewal et al.,
1998; Lichtenstein and Burton, 1990; Zeithmal, 1988). However, service is also a logical

39

driver of perceived value (Parasuraman and Grewal, 2000, p. 169). Outstanding


before/after sale services provided by the seller really increase the benefits obtained (the
take factor) and also decrease the buyers non-monetary costs, such as time, effort, and
mental stress (the give factor) (Parasuraman and Grewal, 2000, p. 169). Consequently,
customer perceived value was composed of service quality, product quality, and price
(Parasuraman and Grewal, 2000, p. 169).

Sheth et al. (1991) classified five categories of perceived value. Functional values are
associated with the utility level of the product (or service) compared to the alternatives.
Social value is described as the willingness to please, and social acceptance. Emotional
values are those choices made based upon feelings and aesthetics. Epistemic values can
be utilized to describe the early adopters because they relate to novelty or
knowledge-searching behaviour.

Finally, the conditional value refers to a set of

circumstances depending on the situation (e.g., Christmas or a wedding.). Above multiple


value refers to a mixture of product/service attributes and/or technological support
available related to a specific usage condition (Monroe, 1985). The multiple sacrifices were
occasionally illustrated in monetary forms (Anderson, et al., 1993).

Kortge and Okonkwo

(1993) claimed that customers perceived value is subjective, not objective; therefore,
different customers might have a variety of perceived values for consuming the same
product/service.

Customer value has been measured using a single dimension (e.g. Patterson and Spreng,
1997; Cronin et al., 2000) and multidimensional measurements (Whittaker et al., 2007;
Wang et al., 2004; Ruiz et al., 2008).

Lin et al. (2005) argues that the single dimensional

measurement is effective and specific; however, distinguishing the complex nature of


customer value is not possible.

Despite a lack of validity (Woodruff and Gardial, 1996),

the utilization of single dimensional construct has also been criticised as unable to capture

40

measurement errors (Chruchill, 1979; Parasuraman et al., 1994; Petrick, 2002). In the
service contexts, a multidimensional approach has been suggested and may be more
suitable (Sweeney and Soutar, 2001; Woodruff, 1997). Sheth et al. (1991) contends that
the multidimensional concept of value is not just limited to functional aspects (quality and
price) but also affective aspects (emotional and social value).

Many debates about the characters of the constructs when they are being examined in
structural equations have occurred. Petrick (2002) suggests that a need exists for a
different scale to be developed for measuring the customers perceived value. The
Petricks (2002) scale of customer value consists of five items: behavioural price, monetary
price, emotional response, quality, and reputation. This study will adopt Petricks (2002)
perceived value measuring scale that applied three measures of customer value namely:
reputation for quality, value for money, and prestige.

2.3.3 Customer Satisfaction

Customer satisfaction is a measure of how products and services supplied by a company


meet or surpass customer expectation (Wikipedia). In a competitive marketplace where
businesses compete for customers, customer satisfaction is seen as a key differentiator and
increasingly has become a key element of business strategy.

A traditional definition of customer satisfaction followed the disconfirmation paradigm of


consumer satisfaction/dissatisfaction (CS/D), suggesting that CS/D is the result of
interaction between the consumers pre-purchase expectations and post purchase
evaluation (Cadotte et.al., 1987).

Anton (1996) gave a more current approach. He

defined customer satisfaction as a state of mind in which the customers needs, wants, and

41

expectations throughout the product or service has been met or exceeded, resulting in
future repurchase and loyalty.

The study in the organizational research on the customer expectations explaining the
discrepancies between the expectations and the reality - comprises of at least three
different theories explaining the discrepancy effects of expectations cognitive dissonance
or assimilation theory; contrast theory; and assimilation-contrast theory (Woodman and
Tolchinsky 1982). Fornell (1992) claimed that high customer satisfaction reduces the
competition in terms of price promotion. Kotler (2003) emphasized that customer
satisfaction is a forward-looking metric. If customer satisfaction starts slipping, then market
share erosion will soon follow. Reichheld and Sasser (1990) addressed that customer
satisfaction also reduces price elasticity for current customer and leads to high margins
and customer loyalty.

Greater customer satisfaction increases the overall reputation of

the store and leads to benefits in establishing and maintaining relationships with the
customer (Anderson and Weiz,1992). Therefore, how to measure customer satisfaction
has become a crucial issue for marketers.

Czepiel et al. (1974) suggested that customer satisfaction level is an integrated


assessment response which represents the summation of customers subjective
responses to different attributes of a product; thus, integrated satisfaction level has
become an item for measuring customer satisfaction.

Handy and Pfaff (1975) argued that

integrated satisfaction level would cause customers in complex perceptions and result in
the loss of relevant information.

Therefore, Day (1977) proposed to measure the

customer satisfaction level on each attribute of a product, in addition to the integrated


satisfaction level.

This research will adopt Czepiel s (1974) integrated satisfaction level

for CVS customer satisfaction evaluation .

42

2.3.4 Customer Loyalty


Brand loyalty is defined 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 (Oliver, 1997). Many studies about
loyalty have been measured by behavioral aspect of brand loyalty, such as repeat
purchase without considering cognitive aspects of brand loyalty (Choong, 1998). Fader
and Schmittlein (1993) conducted an evidence of the advantage of high share brands in
brand loyalty, suggesting that high share brands have significantly higher brand loyalty
than low share brands. Newman and Werbel (1973) also described loyal customers as
those who repurchased a brand and considered only that brand and did not brand related
information seeking. However, all of them measured brand loyalty only by the behavioral
aspect of repeat purchase.

Another definition of brand loyalty offered by Jacoby and chestnut (1978) can balance the
incompleteness of Wilkies definition. Jacoby and Chestnut provided a conceptual
definition of brand loyalty that brand loyalty is (1) biased (i.e., non-random), (2) behavioral
response (i.e., purchase), (3) expressed over time, (4) by some decision- making unit, (5)
with respect to one or more brands out of a set of such brands, and is a function of
psychological (decision-making, evaluative) processes.

Based on the above discussions,

brand loyalty can be arranged into three categories: 1) behavioral, 2) attitudinal, and 3)
both of attitudinal and behavioral.

This research will adopt Gronholdt et al (2000) customer loyalty measuring scale that
includes three constructs: willing of repurchasing, recommendation to others, and cross
purchasing.

43

This research intended to provide evidence as to the efficacy of using both financial and
customer-based brand equity measures brand performance.

Specifically, the research

objective is to consider whether dimensions of brand equity are important antecedents of


retail companies performance such as profitability and EVA/MVA.

Figure 2.3

demonstrates the potential antecedents and consequences of retail brand equity.

Value to the
Corporation

Corporate

Retail Brand Equity:

Brand

Service Quality

Brand
Building

Customer -

Value

Satisfaction

Perceived Quality

Value to the

Customer Loyalty

Consumer

Other Brand Assets

Figure 2.3: Antecedents and Consequences of Brand Equity


(Source: Aaker, 1991, Yoo et al., 2000)

2.4 Retail Brand Value Dimension


The softer side of branding drives the strength of the brand.

That is, the certain

combination of attributes and values that creates a unique, vivid and meaningful identity for
a brand (Schnfelder, 2004). Franzen and Bouwman (2001) proposed that brands are
bought because they possess characteristics that are experienced as relevant by a group
of consumers. These characteristics or brand meanings are known as brand values.
Rokeach (1973) defines a value as a durable belief that makes a particular type of
behaviors and lifestyle good and preferable compared to a converse state. De Chernatony

44

(2001) pointed out that: people buy brands whose values concur with their own values.
Franzen and Bouwman (2001) differentiate brand value into product related values,
symbolic brand values, relationship values and purchasing behaviors values. Product
related values influence the performance of the product, the cultural meaning inherent in
product usage, the ability of the product to activate emotions, through to values reflecting
the ability of the product to provide sensory enjoyment or to fulfill feelings of beauty.
Symbolic values represent how consumers see brands manifesting themselves to others.
These values may be expressive, impressive or terminal (ibid.). Brands are also perceived
to simplify the purchasing process (e.g. Sheth and Paratiyar, 1995). Purchasing behavior
values represent the path the brand is perceived to positively affect the purchasing situation.
For instance, values that are pertinent to purchase may be the extent to which the brand as
simplifying the purchasing choice, providing low cost of searching or post purchase service.
Finally, numbers different values have been defined to describe the differences in consumer
interaction as with the brand (Fournier, 1998). Relationship values influence commitment
feelings that someone attaches to the brand. Biel (1997) underlines the importance of
relationship values to the creation of strong (i.e. preferred) brands as:
To build strong brands and to keep them strong, it is important to
understand the way in which consumers gain brand insight and form
brand relationships. It is these insights that permit us to guide the
actions through which consumers interpret the character of the brand
(Biel, 1997).
Many rich ideas about brand value in firms and in individual levels came from different fields
of literature. The value discussed here also represents those that provide a profound link
between the meaning of brand and the implication of brand definition for both consumers
and the brand owners. The value of brands to retail companies and consumers are
examined in turn below.

45

2.4.1 Brand Value to the Consumers


As early as 1955, Gardner and Levy described brands as symbols representing complex
systems of functional and affective attributes that fulfill rational and emotional customer
needs. Brands serve a number of functions for the consumer. They provide a strong
assurance of quality and reliability, thereby reducing various types of risks that consumers
may be exposed to in buying an unknown commodity. Apart from these functional roles,
brands also play a number of psychological roles in their relationship with the consumer.
Brands also enable the consumer to shop with confidence and specify unerringly which
brand matches their personal wants, needs and expectations.

Lannon and Cooper (1983)

contributed further insight of different types of attributes by bringing knowledge from


neuroanatomy into branding theory.

Brand Attitude and


Choice

Practical

Perceptions of brand

Physical justifications

Symbolic

Fits my lifestyle

Express me, my identity

Beliefs about value for money

Helps order and structure

Available and habitual

Intuitive likes and dislikes

Rational overt Response

Emotional covert Response

Response
Figure 2.4: Customers Rational and Emotional Response to Brands
Source: Lannon and Cooper (1983)

46

The value of brands to the customers is integrated and discussed under three keynotes in
this thesis. They are described in the following sections.

2.4.1.1 Brand as an Expression of Self


A consumer does not only shop for a specific retail brand for reason of function or
convenience.

Emotional reasons also have an important influence on choosing which

store to go to (Floor, 2006).

In the global economy of post-modern societies,

consumption activity is not merely a fulfillment of want and need; but also an expression of
self in which retail brands seem to serve as iconic representations of consumer values and
an image of self.

Being a customer of a certain retail brand can be a symbol of

communication to others about what someone considers to be important is a statement


about the customer (Floor, 2006). This role of brand as an embodiment of self represents
a crucial link between a store and the consumer, for whom a retail company must create
value to maintain competitiveness and profitability. Brands are increasingly important as
the link that hooks the store and services in the consumer's mind (Trout and Ries, 1972;
Trout, 1999).

Keller (1993) addressed that the key to create strong brands is to create

positive associations about the brand in consumers minds. This represents a crucial
source of future economic income for the retail brand (Abimbola, 2003).

2.4.1.2. Brand as Risk Reducer


Risk reduction is probably one of the most important factors that consumers face in many
buying situations. Bowbrick (1992) opined that risk has two important elements that are
relevant to consumer consideration. These are: the likelihood that a store will not perform
as expected, and the effect of such nonperformance to them. Consumers are, therefore,
sensitive to any potential risk they may be exposing themselves to in buying a product from
a store. A brand helps consumers to reduce the level of risk they are exposed to when

47

purchasing a commodity from an unknown store. The risk of the latter is not defined in
terms of monetary value alone. The time and search effort are also included, as well as risk
that may be encountered due to the usage of the unknown retail brand. These may include
physical risks such as monetary loss, health and personal injury. Emotional or
psychological risks also exist such as damaging one's personal standing among friends
and family, and loss or damage to an item of sentimental value. With increasing functional
parity and the sheer proliferation of brands, consumers find it easier to interpret the benefit
that a familiar retail brand offers them, and feel more confident in their purchase without
having to make extensive risk analysis (Batra et al., 1996).

2.4.1.3 Brand as a Relationship


The development from brand personality to the notion that consumers have relationships
with their brands has been described as a natural and unsurprising progression (Blackston,
2000). Saren and Tzokas (1998) described this as the outcome of a tripartite partner
(Fournier, 1998).

Applying phenomenological methods, Fournier (1998) investigates the

types of relationships consumers have with brands. She identifies six qualities of a brand
relationship. These are: love, self connection, commitment, interdependence, intimacy,
and brand partner quality. Each of these may contribute to different aspects of consumers'
memory. The rational information and cognitive sense may help in brand risk assessment,
but the emotional part may trigger the affective parts of the memory.

DallOlmo Riley and de Chernatony (2000) observed that the developing literature on
relationship marketing might be contributing to the new emphasis on consumer-brand
relationships and on concepts such as brand loyalty.

Relationship marketing aims to

focus on the consumers one at a time (Blackston, 2000). The refreshed interest in the
concept of brand loyalty reflects the intention of companies to retain their customer base in

48

increasingly hostile marketplaces (Blattberg and Deighton, 1996).

Relationship marketing

has been described as:

All marketing activities directed toward establishing, developing and


maintaining successful relational exchanges. (Morgan and Hunt, 1994)

Two principles of relationship marketing are particularly relevant to consumer-brand


relationship literature. These are trust and mutuality (e.g. Morgan and Hunt, 1994,
Grnroos, 1994, Christy et al., 1996).

2.4.2 Brand Value to the Firm


In firms term, due to the fact that brands have the ability to provide uniqueness, they also
facilitate the process of value negotiation between a store and consumer. This is because
a brand enables owner to assess a consumer's acceptability of the value of a stores
offering through repeat purchase. In a situation where consumers are not delighted by
what a brand offers they simply choose alternative competitors, thereby signaling to the
brand owners that the offer no longer provides the same level of value as competitions.
Brand owners, therefore, may facilitate the development of consumers who persistently
purchase a brand over time. Over time, brands can also "become sorts of annuity for their
owners" (Murphy, 1992, p.186), as emotional attachment and simplicity of making a regular
purchase acts as a reliable source of future demand. Such dependable level of demand
may facilitate and improve the economic impact of a brand on brand owner that is
manifested through future cash flow. The consequences of the effective use of the brand in
competitive positioning plays a strategic role in competitive activities because it creates a
barrier which forces new entrants to incur the huge investment required to endow a product
with the unique associations, meanings and personality which differentiate it from

49

competitors. The cost of overcoming customer loyalty (cf. Porter, 1979, 1994; Rumelt,
1997) is also an added barrier with which any would be competitors have to contend; in
fact, empirical research shows that attracting first time buyers costs between 5-6 times
more than strengthening an existing customer base (Peter et al., 1999, p.321). Therefore,
customer loyalty provides predictability that reduces the elasticity of demand. The inability
of competitors to duplicate the overall impression and reputation (Grant, 1997) that a brand
connotes in customers' minds is a powerful means of securing competitive advantage.
Aaker (1991) observed the value of the brands would be the marginal value of the extra
sales (market share) that the brand name supports.

In stakeholders term, brand value attributes to a much richer source.

Jones (2008)

demonstrated that each stakeholder group would have different primary concerns and
objectives in relationship to the brand. For example, investors will be looking for a sound
financial performance, with benefit of strong brands is seen in lower funding costs.
Suppliers or distributors may be looking for transfer effects of brand reputations; the impact
of brands is evident in lower costs. Customers may be looking for three types of benefits:
functional, symbolic and hedonic which may generate profitability and growth.

In society term, retail brand owners seek to extend the goodwill created by a brand in the
consumer's mind to competitive (or even different) marketplace, particularly since
everything people associate with a brand contributes to the commercial success of the firm.
Managers are, therefore, well placed to build upon the goodwill that their existing brand
commands in the market. This facilitates entry into a retail sector that is different from the
original sector associated with the earlier brand. Managers can build upon the dominance
and market presence of the private level brand to further strengthen the brand's market
share as well as its competitive position (Abimbola, 2003). It is estimated that in 1988, up

50

to 66% of successful new brands were line on brand extensions (Tauber, 1988; Aaker,
1990). Value may accrue due to decreased distribution costs and shared advertising. The
parent brand may positively influence the image of the extended brand and vice versa. The
risk of failure is also reduced when a successful brand is extended into a new product
category or substitutes. Figure 2.7 shows the multi-domain value of retail brands to the
firms.

Brand Value

Customers

Suppliers

Employees

Finance

Affects Customers

Financial Value and

Behaviors

Performance

Increased volume and

Revenues increase

values

Price Premiums

Better terms of business

Lower Costs/Higher

and higher discounts

Margin

Reduces labor costs and

Lower Costs/Higher

improves efficiency

Margin

Enhances equity and

Weighted Average Cost of

reduce borrowing costs

Capital

Figure 2.5: Multi-Domain Brand Value to the Firm

2.4.3

Retail Brand Value Propositions

Value drivers are the set of building blocks that, when properly combined, allow a company
to generate value (Laboy, 2009). The purpose of this section is to investigate and describe
key factors of brand value from corporate and market-based perspectives that support the
development and implementation of revenue building strategies. In the literature, different
types of value propositions are presented. Floor (2006) indicated that a good location,

51

good employees and perfect operational excellence are the most important asset for a
retailer. Treacy and Wiersema (2003) proposed three different types: product leadership,
customer intimacy and operational excellence.

Doyle et al. (2007) stated that

organisations have two main possibilities of creating value: retionalisation or growth.


Rationalisation means cost advantage or raising prices, whereas growth results from the
revenues generated by existing and new customers, and new markets (businesses). To
improve customer loyalty and corporate profits continuously a company must optimize the
product range, and involve customers in the product development process. Growth
resulting from new businesses comprises either the development of new stores or the sale
of new products in the markets. Figure 2.6 provides an overview of the possibilities of value
creation.
Creating value

Rationalise

Growth

Price Prestige
Driver

Costs

costs

Variable
costs

Expansion

Driver

Driver

Raise price

Advantage

Fixed

Loyalty

Increase

New

New

Loyalty

Products

Channels

Brand

Existing

Overseas

Premium

building

products

markets

On niches

activities

Focus

Products

Figure 2.6: Possibilities of Value Creation

New
businesses

(Source: adapted from Doyle, 2007)

52

Rintamki et al (2007) employed the term customer value proposition instead of the more
general term value proposition and distinguish between economic customer value
propositions, functional customer

value propositions,

emotional customer

value

propositions, and symbolic customer value propositions. Srivastava et al. (2001) proposed
to focus on market-based processes to optimize the use of a firms resources and to
improve the delivery of superior value to customers. Market-based processes drive a firms
financial performance and lead to repurchases by transforming the intellectual and
relational market-based assets of an organization into an offering that customers prefer
over competitors. These market-based processes include customer relationship
management, product development management, supply chain management, logistic
development management, the acquisition, development and deployment of human
resources. Besides these processes, the intellectual and relational market-based assets of
an organization are necessary for creating competitive customer-oriented offerings.
Intellectual assets are the types of knowledge a firm possesses about the external
(marketplace) and internal (organizational) environment and are utilized to develop and
implement marketing, product, and sales strategies. Factors of relational assets are, for
example, trust or reputation and depend on the individual firms objectives that make it
difficult for rivals to imitate them (Abimbola, 2003).

McNaughton et al. (2002) developed a conceptual model of market-oriented value creation.


This model identifies the steps between market orientation and value for the owners of the
firm (see Figure 10). Market orientation is linked to the creation of market-based assets
and other asset types, which lead to enhanced value creation for customers. Customers
perceive this higher value, are more satisfied and loyal, and act as marketing agents by
spreading positive word-of-mouth (Reichheld and Sasser, 1990). Therefore, firms are
able to build strong entry barriers that divert competitors to higher cost or less effective

53

strategies (Grant, 1991). The need of a non-market asset, such as a new store location or
technology, can be determined by the information gathered from the market-based assets.
Figure 2.7 depicts the process of value creation developed by McNaughton et al (2002).

Cost Advantage
Customer
Loyalty
Asset
Creation
Market

Other Asset
Types

Competitive
Advantage

Perceived
Customer
Perceived
Value
Customer
Value

Customer
Attraction

Customer
Satisfaction

Cash
Flow
Impacts

Market-based
Assets

Customer Value

Words of
Mouth

Firm Value

Figure 2.7: The Process of Value Creation


(Source: McNaughton et al., 2002)

From the above, one can imply that a firms value is attributed from brand tangible assets
and intangible assets (Hogan et al, 2002). The term tangible assets (Hogan et al, 2002) are
applied interchangeably with the terms market-based processes (Srivastava et al, 2001)
and non-market assets (McNaughton et al, 2002). However, all three different terms mean
tangible elements, such as technology, supply chain, product development, point of sale,
or human resources. The term intangible assets (Hogan et al, 2002) are employed
interchangeably with the term intellectual assets (McNaughton et al, 2002; Srivastava et al,
2001). Both terms mean a firms current and potential value drivers that drive brand equity
and a firms financial performance.

54

2.5 Brand Value Measurement


In document 4, we have stated three approaches, i.e. cost approach, market approach and
income approach to brand valuation and explored brand valuation models such as Hirose ,
BBOD and Interbrand. However, service marketing is different from goods marketing
which is usually more complex to manage. In service industries, the distinctive features of
services (intangibility, reparability, perish ability and heterogeneity) require understanding
and satisfying customer needs and expectations, creating, communicating and delivering
customer value, and keeping promises (Aksoy et al., 2003). Brand value perception cannot
be measured in terms of specific monetary values because the perception is only in
peoples heads. Therefore marketers use three proxy measures: inputs (marketing
activities such as investment), outputs (i.e. customer behavior such as market share) and
intermediate measures (such as awareness and perceived quality).

Various non-financial

approaches to evaluating retail brand value exist. Concepts such as brand loyalty (e.g.
Brown, 1953; Ehrenberg, 1966; Jacoby and Chestnut, 1977), customer satisfaction
(Anderson and Narus, 1996) and brand equity (Aaker, 1991, 1996; Keller, 1993, 1998) are
measures for gauging the effectiveness of branding strategy. Converting brand
performance into financial terms depends on many factors (including the behaviour of the
customer towards a brand), because consumer perception is an important factor in any
marketing metrics. Kokkinaki and Ambler (1999) classified such market metrics into six
categories including one category for financial values (actual sales figure, profitability and
gross margin). Some widely employed non-financial measurements are depicted in Table
2.1.

55

Table 2.1: Non-Financial Oriented Measures of Brand Performance

Performance Category

Market Metrics

Brand Equity- Aaker (1991)

1. Brand awareness
2. Brand perceived quality
3. Brand associations
4. Brand loyalty
5. Other proprietary brands assets, such as
patents, trademarks, and channel
relationships

Customer-based brand equity:

1. Brand awareness

1. Knowledge equity- Keller (2003)

2. Perceived quality

2. Attitudinal equity- Lavidge (1961)

3. Perceived value

3. Relationship equity- Lassar et al (1995)

4. Social image
5. Customer satisfaction

Customer Equity: Rust (2000) :

1. Quality

1. Value equity- Dodds and Monroe (1991)

2. Price-prestige

2. Brand equity- Keller and Aaker (1992)

3. Convenience

3. Retention equity- Agtilgan et al. (2005)

4. Attitude toward the brands


5. Brand awareness
6. Corporate citizenship
7. Community program
8. Knowledge-building program
9. Affinity program

Customer Behaviour

1. Customer preferences

56

Service quality (Cronin and Taylor 1992)


Perceived value (Petricks 2002)
2. Loyalty/retention (Gronholdt et al. 2000)
3. Customer satisfaction (Day 1984)
Trade Customer

1. Customer satisfaction
2. Number of complaints

Relative to Competitor

1. Relative consumer satisfaction


2. Perceived quality
3. Market share
4. Price premium
5. Distribution coverage

Innovation

1. Number of new products


2. Revenue of new products
3. Margin of new products

Financial

1. Sales
2. Gross margins
3. Profitability

This study will utilize both financial and customer-based approach to measure retail brand
equity performance.

The financial approach will adopt Hirose valuation model which had

been tested in document 4. The customer-based approach will adopt customer behavior
measure construct i.e. service quality, perceiver value, customer satisfaction and customer
loyalty to measure customer preference to store brand.

57

2.6 Summary of Chapter


In Document 4, this study reviewed brand equity and brand value from multi- dimensions.
In Document 5, this study explored the nature and meaning of retail brand equity and
cultivated a specific definition based on Murphy (1990) and Kellers (1998) theories. The
definition of retail brand equity indicated that the uniqueness of brands is based on the
consumers perception.

Therefore, the retail brand equity is examined as important

implements that facilitate the creation of brand value based on the customers perspective.

John Roberts (1998) illustrated a source (what people know about brand) and outcome
(what consumers are willing to do) relationship of brand equity model (p.35). This model
was adopted by ACNielsen as the fundamental theory of Winning Brands store equity
model published in 2001 (p.36). The model demonstrated that the more customers know
about the brands awareness and association, the higher price premium and emotive
loyalty that exists.

This source- outcome relationship facilitates economic gain and

underpins the financial strength of a brand to the firm as Doyles value creating proposition
stated in 2007 (p.52).

This study integrated the above two different but complementary perspectives: the financial
approach was based on Doyles value creating proposition that focused on the effect of
brand value on corporate performance; the customer-based approach highlighted how
brand equity can drive brand value and what is the construct of retail brand equity. These
constructs were examined as important implements that facilitate the creation of brand
value.

Following the propositions of John Roberts source-outcome branding relationship,

this study developed a cause-effect conceptual framework and formulated research


hypotheses as in next chapter.

58

Finally, different measures of brand valuation were examined and the importance in the
quest for appropriate evaluation of brand performance was highlighted. These measures
were divided into financial oriented and customer oriented. The most common financial
measures focus mostly on stock prices, sales revenue and gross margin. This study
adopted the Hirose valuation model that used five-year corporate financial statement to
analyze and predict brand value as stated in document 4.

In addition to financial

approach, in document 5, this study also explored customer-based measurement which


generally falls into two groups: those involving consumer perceptions (such as awareness,
brand association, or perceived quality) and those involving consumer behaviors (such as
brand loyalty and the focus on paying a price difference).

This study simplified the

discussion of the differences between them as well as the link that existed in their usage as
financial and marketing metrics.

59

Chapter 3: Research Methodology and Hypotheses

3.0 Introduction
This chapter provides an overview of the method utilized to investigate the research
hypotheses. The overview includes specific issues such as the conceptual framework of
the research, research design, the development of the research instrument and data
collection. The operational process of the main study and data analysis is also discussed.
The chapter is divided into five main sections. Section 3.1 is to conceptualize the research
framework.

Section 3.2 is to formulate the research hypotheses.

Section 3.3 and 3.4

provides the research methodology and design by discussing the research sampling frame,
research instruments and data analysis technique. The customer survey is reported in
3.5 and the chapter summarizes in 3.6.

3.1 Conceptualising Research Framework


Approaches that are driven exclusively by customer-based brand equity measures or
financial measures lack either the financial or the marketing component to provide a
complete and robust assessment of the economic value of brands (Brand channel, 2006).
Therefore, a need exists to understand the link between the brands metrics obtained from
both

perspectives.

Based

on

customers

perspectives,

retail

brand

equity

is

conceptualised what the brand means to the consumer that is concerned with: service
quality (e.g. Turban ,2002; Gronroos 1982; Smith and Houston 1982; Parasuraman et
al., 1988; Cronin and Taylor, 1992), perceived value (Webster 2000; Baldauf et al, 2000;
Zeithaml, 1998; Shethetal, 1991; Petrick,2002), customer satisfaction ( Codotle et al. 1987;
Anto 1996; Woodman and Tolchinsky 1982; Fornell 1992; Bettencourts, 1997; Kotler
2003; Czepiel et al., 1974) and customer loyalty (Choong, 1998; Fader and Schmillein

60

1993; Gronholdt et al., 2000; Jacoby and Chestnut, 1998). Based on financial perspectives,
brand equity represents the sale or replacement price of a brand to a focal company that
has three value drivers (i.e. prestige, loyalty and expansion) (Hirose, 2002). This study
approached the issue by combining the financial perspective on customer-based brand
equity with that ACNielsens winning brand store equity model to conceptualize the
process of convenience store chains brand value creation. This conceptual model
develops a cause-effect framework based on financial and customer perspective of brand
equity that links brand equity, brand value and financial performance together as shown in
Figure 3.1. Therefore, the following research hypotheses were formulated based on this
conceptual model.

Customer-based Approach
(Source-Cause)

Financial-based Approach
(Outcome-Effect)
Corporate

Retail

Brand

Profitability,

Brand Equity

Value Drivers

EVA, MVA

Service quality
Perceived value

Customer Satisfaction

Customer Loyalty

Price Premiums
Loyalty Driver
Expansion Driver
Brand
Building
Efforts

Figure 3.1: The Cause- Effect of Brand Equity on Stores Value/Performance

61

3.2 Formulating Research Hypotheses


The effect dimension adopted financial approach to examine whether the brand value do
affect performance as conceptualized by store profitability performance, EVA performance
and MVA performance. The theory utilized for brand performance is developed based on
Doyles (2007) theory of value-creating proposition and Hiroses brand valuation model
indicated that brand has a function of three value drivers, namely, 1) Prestige, 2) Loyalty
and 3) Expansion as bellows:

Strong store brands need to be recognizable, accessible and offer value- but as markets
develop, so do consumer expectations, and they need increasingly to look at the totality of
the shopping experience and invest more in convincing consumers that they offer best
service quality and value for money.

For example, convenience stores that offer a better

location to attract large numbers of customers, thus manufacturers are willing to pay a
higher cost to obtain the exclusive rights for a certain period of promotion.

Convenient

service such as automated money orders, copiers, fax and automatic teller machines,
long-distance phone cards and train/flight/art performance tickets are provided based on
each neighborhoods individual needs, and consumers are willing to pay more for a retail
brand that makes shopping easier: less time, less effort and less stress. In addition to low
and fair prices, convenience store also offers creative promotion, extensive range (e.g.
parcel home-delivery, color copying, pre-order gifts), a pleasant store experience and high
shopping convenience (e.g. payment acceptance for mail-order sales, life insurance and
utility tickets), therefore, offer consumers a strong consumer proposition and satisfaction
(McKinsey, 2003).

Meanwhile, the cost efficient supply chain is replacing price impact as one of the chain
stores competitive advantages. Sales differentials per cost of sales is an index of excess

62

profitability that demonstrates unit price differentials between stores. (e.g. WalMart is
known for its very low prices, but Wal-Mart has wide range, eco-purchasing system,
friendly store image and provides a pleasant shopping experience.)

So Wal-Mart offers a

high-value positioning of more for less retail brand image and maintained an outstanding
performance.

This strong consumer proposition has created the growth in traffic and basket size,
resulting in a much higher productivity, better stock situations, great merchandise
presentation, and thus a more compelling shopping experience for customers, leading to
higher sales productivity.

Therefore, a strong retail brand shows better financial results

(cost and price premiums advantage) than weaker brand because consumers make more
frequent visits, fill larger than average shopping baskets, or pay price premiums at the
stores of brands they perceived to be strong (Court et al, 1999). Hirose model
conceptualized a strong retail brand has an impact on price premium advantage namely
price prestige driver.

Price prestige driver is the factor of brand value, which focuses on the price advantage
created by the reliability of the brand that enables the store to sell the product constantly at
higher prices compared with the competitor. Price advantage is explained by the excess
value of branded stores over that of non-branded stores (Hirose, 2002). Based on the
above propositions, specific hypothesis one is formulated:

Hypothesis 1: Prestige driver is positively related to brand value.

In addition to pragmatic considerations, consumers behavior is also led by an emotional


bond with the brand. If consumers are willing to purchase the brand even in the face of
63

competitors with superior features, price and convenience, an emotional relationship may
exist in the stores brand perhaps in symbol or slogans. When stores become able to
develop customer loyalty to and trust in stores brand, the customer will begin to make
purchase decisions based on brand rather than physical or functional aspects of the
products and services, and as a results, the brand will reduces marketing costs as high
brand awareness and loyalty, thereby providing stores with trade leverage in bargaining
with manufacturers or venders, attracting new customer and more time to respond to
competitive threats (Aaker, 1996, Floor, 2006). Martin-Consuegra et al. (2007) proposed
evidence that a satisfied and loyal customer is willing to pay more for the service, repeat
the purchase and attach value to maintaining the relationship with the store. Therefore,
the Hirose model conceptualized a strong retail brand that has an impact on customer
loyalty advantage namely loyalty driver.

Loyalty driver is the factor, which focuses on the capability of a brand to maintain stable
sales for a long period based on stable clients or repeat purchaser with loyalty.

Having

high brand loyalty means a store can charge a relatively higher price for product and higher
margins than competitors (Richard and Larry, 2007). Loyal customers usually require less
investment from the store to maintain the relationship than the costs incurred to develop
the relationship at the outset. Therefore, the effect of a brand could be expressed as
prestige driver and loyalty driver, both of which reflect price and quantity effect of the cash
flows generated by the brand in its relationship with customers. The Hirose committee
proposed to adopt the stability of market share by cost of sales as a parameter for loyalty
driver since the data is objective based on financial statements data and captures growth
and decline of markets. A strong retail brand position in the mind of the consumer leads
to a higher market share. A higher market share generally results in a higher return on
investment and profitability.

Therefore, the second hypothesis is formulated:

64

Hypothesis 2: Loyalty driver is positively related to brand value.

A strong retail brand can also grow rapidly through franchising at lower capital costs.
Independent entrepreneurs are willing to work under the umbrella of a strong brand as they
know that a strong retail brand guarantees high sales. A strong retail brand can benefit
from the local power of independent entrepreneurs and quickly build market share and
brand equity. A higher market share generally results in a higher return on investment. In
addition, a strong retail brand can also enter the new market easier. For example, 7Eleven, Mercuries and Ten Ren Tea Co. can therefore be successful in opening restaurant
chains. Their consumer franchise as a chain store is a leverage for new products and
services.

The Hirose model conceptualized a strong retail brand has an impact on

expansion advantage namely expansion driver.

Expansion driver states a brand is widely recognized and is capable of expanding from
traditional industry and markets to similar or different industries as well as to overseas
expanding market geographically.

The Hirose committee adopted the average of the

growth rate of the overseas sales and the growth rate of sales in the non-core segment of
the stores as the parameter for brand expansion power.

Therefore, the third Hypothesis is

formulated:

Hypothesis 3: Expansion driver is positively related to brand value.

Reinartz and Kumar (2002) proposed that profitability must be managed concurrently to
ensure a stores maximum positive results. The best known and most widely employed
profitability ratios are Return on Assets (ROA), Return on Equity (ROE), Gross Margin
(GM), Net Margin (NM) and Pretax Margin (PM).

These five ratios are measured how

65

efficiency the stores operations (Ross et al., 2006). ROA describes how effective a store is
at converting its assets into net profit. Generally, the higher the number, the better the
performance.

ROE is a measure of efficiency based on a stores ability to generate profits

from stockholders equity. Gross margin is a stores total revenue minus the costs incurred
when producing the product and service that generated the revenue.

A high gross profit

represents that a store is efficient, well-run and has appropriate cost control. NM is the final
profit after taxes, research and development, non-recurring and other income statement
take-outs. NM is a good measure for store to evaluate how efficient to turn revenues into
real profits while keeping costs under control.

Yeung and Balas (2007) research demonstrated that strongly branded companies are
more profitable and the significance of brands effects on internal profitability8 based on
the top 300 companies in the United States. A strong retail brand reflects greater
operational efficiencies, higher returns, lower costs and faster growing margin.

Kim and

Kim (2003) found that brand equity has a positive effect on a companys performance and
over 50% of the variations in performance can be attributed to brand equity for chain
restaurants and luxury hotels.

Baldauf et al. (2003) provided supportive evidence that

three brand equity components (brand awareness, perceived quality and brand loyalty)
have a significant influence on subjective performance measures including profitability
performance, market performance and customer value (Yeung and Bala, 2007).

Aaker

and Joacimsthaler (1999) quantified the importance of branding to the bottom line.
EuiTrend utilized perceived quality as the key brand equity measure and found that

Accounting Profitability measures include ROA (Return of Asset, net Profit/total asset), ROE
(Return of Equity, Net profit/total equity), MG (Gross Margin, gross margin/sale), NG (Net Margin,
Net margin/sale), PM (Pre Tax Margin, pretax margin/sale)

66

companies with the largest gains in brand equity enjoy an average of 30% stock returns.
The relevant literature and evidence provide an overwhelming support for a positive link
between brand value and profitability.

Therefore, the forth Hypothesis is:

Hypothesis 4: Brand value is positively related to stores profitability.

As many academics have emphasized, brand building is not an expense, but an investment
in the brands and the companys future (Davids & Dunn, 2002). Stores with solid financial
performance also perform substantially on key nonfinancial indicators, including market
share, customer satisfaction, labor productivity and labor relations, interest and principal
payments to lenders, reputation with banks and other lenders and return on invested
capital.

Unlike traditional profitability measures, both EVA and MVA measures take into

account the cost of equity capital to maximize shareholder wealth and stores market value.

EVA is a measure of a company's financial performance based on the residual wealth


calculated by deducting cost of capital from its operating profit (adjusted for taxes on a cash
basis). Based on the United States Financial Accounting Standards Board (FASB), four
types of brand value transactions exist: 1) the value of the brand becomes collateral to
secure a loan or bond issue which is related to cost capital. 2) Brand-based tax planning
involves transferring ownership of a trademark and/or other intellectual property to a holding
company that charges a royalty to the operating companies employing these brand assets.
3) Brand licensing enables brand owners to recover economic benefits via a royalty rate or
licensing fee. 4) Acquisitions require that price of brand assets to be reached. This leads
the fifth hypothesis:

67

Hypothesis 5: Brand value is positively related to stores EVA.

MVA is the difference between the market value of the store (including equity and debt) and
the total capital invested in the store.

A strong retail brand will reflect successfully in

investing the capital and transforming it into bigger. In 1978, 95% of the Dow Jones
industrial market capitalization accounted for tangible assets (plant and equipment). By
2004, this had fallen to just 28%, with the majority of value now residing in intangibles.
Market value reflects the markets verdict on how successful managers have been in
investing the capital entrusted to shareholders and transforming into bigger. Therefore,
higher MVAs are more beneficial.

Hon and Lee (2008) empirically investigated the

association between brand value and MVA.

The result showed that brand value has

positive effects on MVA in computer and peripheral accessories industries. Therefore, this
leads the sixth hypothesis:

Hypothesis 6: Brand value is positively related to stores MVA.


The conceptual model which guides the effect of brand value to the retail corporation is
shown in Figure 3.2.

PrPri

H1

Prestige Driver

H2

Loyalty Driver

Profitability

H5

EVA

Brand Value

H3
Expansion

Store

H4

H6

MVA

Figure 3.2: Research Structure of the Effect of Brand Value


68

The cause dimension adopted customer-based approach to investigate the constructs of


brand equity and the relationship with brand value. The dimensions of retail brand equity
represent the assets or liabilities that link a name or symbol to a brand. The resulting
brand equity thus provides a basis for strategic initiatives which create value directly for
customers and the firm.

This study reconstructs service quality, perceived value,

customer satisfaction and customer loyalty as the main constructs of retail brand equity.

Stores offer a position on the goodsservices continuum, thus, perceived service quality
represents an essential pillar of value (Grnroos, 1995).

Convenience store chains

continue offering new services such as parcel home-delivery, color copying, catered lunch
boxes ordered in advance and payment acceptance for mail-order sales, life insurance and
casualty insurance. Thus the element of convenience has been steadily rising. This
service diversification helps expand the customer base and bring about incidental
shopping (Ishikawa and Tai, 2002). In addition, this service quality builds a barrier for
competitors to imitate (Parasuraman and Grewal, 2000) and represents a basis for
differentiation (Berry, 1995) and competitive advantage (Reichheld and Sasser, 1990). Yoo
et al. (2000) found that brand equity is positively related to service quality.
Vatjanaseregaguls et al. (2007) research showed that a relationship exists between each
dimension of quality perception: perception tangibles, perception reliability, perception
responsiveness, perception assurance, perception empathy and each of consumer
decision factors in the Thai hotel industry.

Kirshnan and Michaels (2001) research

indicated that services quality has the highest brand equity index and are an important
factor of brand equity. Based on above research evidences, the seventh hypothesis is:

Hypothesis 7:

Service quality is positively related to brand equity.

69

Consumers have become increasingly more sophisticated and demanding during the past
two decades with the availability and abundance of products, services, information, and
technology, as well as a new abundance of retail stores and channels (Terblanche and
Boshoff, 2004).

In response, many retailers are strategizing to turn shopping into a

high-value pursuit and are generating consumer value as an important source of


competitive advantage (Woodruff, 1999). Perceived value plays an important role in
creating customer satisfaction and loyalty: "providing customers with outstanding value
may be the only reliable method to achieve sustained customer satisfaction and
loyalty." (Jones and Sasser, 1995, p. 90). Yu (2006) found that consumers perceived
value will affect customer satisfaction. The higher value consumer perceived the higher
customer satisfaction.

Gills (2007) research results indicated that four out of five

customer dimensions perceived value (service quality, technical quality, price, and social
value) has a positive impact on the customers purchasing intentions. Wang and Alisons
(2005) findings also showed that the customer perceived value in raising the degree of
customer satisfaction and brand preference has a significant correlation in retail stores.
Based on above researched evidence, the eighth hypothesis assumes:

Hypothesis 8:

Customer perceived value is positively related to brand equity.

Customer satisfaction has positive impacts on the strength and favorability of associations
towards a retailer in consumers minds (He and Yan, 2011).

A strong retail brand is highly

dependent on customer satisfaction for customer retention, and assists in realizing


economic goals like sales turnover and profit revenue (Zeithaml et al., 1990 ; Berry and
Parasuraman, 1991). Anderson et al. (1994) investigated the nature and strength of the link
between customer satisfaction and economics returns. The findings supported a positive
impact of quality on customer satisfaction, and in turn, profitability measured as return on

70

investment. In the same vein, Gruca and Rego (2005) find empirical support to the link
between customer satisfaction, cash flow and shareholder value. Torres and Josep (2007)
found that customer satisfaction has a positive direct effect on brand equity. This evidence
leads to the ninth hypothesis:

Hypothesis 9: Customer satisfaction is positively related to brand equity.

Loyal customers provide stores a consistent source of revenue (repeat and increased
purchases) and for cost reduction (less promotional expenses) that leads to increased
profits.

Depending on the industry, an improvement of 5% in customer retention leads to

an increase of 25% to 85% in profits (Kerin et al., 2009; Reichheld and Sasser, 1990).
Furthermore, stores spend more than five times as much to obtain a new customer than to
retaining an existing one (Kotler and Keller, 2006; Wills, 2009).

The extant research provides mixed evidence of the nature of the relationship between
satisfaction and loyalty. Some researchers (e.g. Cronin and Taylor, 1992; Woodside et al.,
1989) including those who conceptualized loyalty based upon attitudes or intentions (e.g.
Dabholkar et al., 2000; Yang and Peterson, 2004), found evidence of a positive
relationship between satisfaction and loyalty.

There seems to be a predominant belief

that satisfied customers are often loyal and that they engage in repeat business (e.g.
Cronin and Taylor, 1992; Homburg and Giering, 2001).

This leads to the tenth

hypothesis:

Hypothesis 10: Customer loyalty is positively related to brand equity.

The brand equity dimensions of service quality, perceived value, customer satisfaction and

71

brand loyalty are proposed as constructs of retail brand equity and the antecedents to
brand value as is shown in Figure 3.3.

H7

Service quality

H8
Perceived Value

PrPri

Bran Equity

H9
Customer
Satisfaction

H10
Customer Loyalty

Figure 3.3: Research Structure of the Retail Brand Equity

The

research

conceptual

model

that

links

financial-based

brand

equity

and

customer-based brand equity is shown in Figure 3.4

72

A1
Service

A2

Quality

H7

EVA

MVA

H1 H5

H6

A3
PD

A1
Customer

Perceived

A2

Value

H10

Loyalty

Equity

LD

H8

Brand
Value

H3

A3

ED

H9

A1

H2

Brand

Customer

H4

Profitability

Satisfaction

Figure 3.4: The Research Conceptual Model Links Brand Equity to Brand Financial
Performance

3.3 Research Methodology


This research employs a Positivist Approach. In the original Comtean usage, the term
"positivism" roughly meant the application of scientific methods to uncover the laws
according to which both physical and human events occur while "sociology" was the
overarching science that would synthesize all such knowledge for the betterment of society.
The primary investigation that stemmed from the propositions discussed in section 3.2
involved the financial effect and causal constructs of brand equity. Therefore, positivist
methodology is designed to ensure that results provide accurate reflections of reality.

73

Hypothetical-deductive techniques may be effective for research questions testing. If the


conclusion and evidence do not match, then the model is falsified; if they do match, then
this is some evidential support for the model and its explanation. Robert K. Meton called
this approach as middle-range theory generalized from a segregated hypotheses and
empirical regularities rather than starting with an abstract idea of a contemporary
phenomenon especially when the boundaries between phenomenon and context are not
clearly evident.

The main objective of positivist technique is that of offering scientific

evidence or knowledge through empirical testing. This objective is to be contrasted with


that in which one seeks specific generalisable common sense (Churchill, 1999; Kumar et al,
1999).

This study aims to be Applied research instead of Basic research. The emphasis in a
basic research is on the examination of theoretical issues designed to add information and
knowledge to a study (Kerlinger and Lee, 2000).

The Applied research, however, is

implicated with solving a specific problem. Utilizing information and theoretical insight
found in a basic research study, applied research enables one to transfer theoretical
findings to determine how they can solve a practical problem.

Calder and Tybout (1999)

identified two ways of applying research to real life situations. The first approach, termed
effect studies, is designed to be:

applied by mapping observed events directly into other settings similar


enough by virtue of similarity to the other settings (Calder and Tybout, 1999).

In instances like this, actual effects are generalised from the research setting into practice.
Theory functions as an abstraction that offers conceptual explanations. This abstraction
a theoretically plausible explanation based on knowledgeable understandings of issues

74

relating to brand value and brand equity gathered from the literature as a well as industry
experience.

Clearly the crucial characteristic of this type of research is that:

Effects observed in the research are not expected to generalise directly to other
settings.

Rather, effects are applied to test the theory. Furthermore, the theory is

expected to be appied to other settings (Calder and tybout, 1999).

In distinguishing between these two types of research, Calder, Philip, and Tybout (1981)
and Tybout and calder (1999) emphasized the need for clarifying between theory
application and effect application.

This distinction is important to utilize appropriate

design to reflect the intended application of the research.

Central to this design

requirement is the need for appropriate research settings that correspond to, and closely
make the intended application. The main consideration, therefore, is not that an effect
study guarantees external validity, rather that theory and effect application research have
different roles to play in application to real-life situations (Abimbola, 2003).

Therefore, an empirical study is incorporated to investigate the apply theory of brand equity
and brand value in convenience store chains. Ten hypotheses were proposed. From these
hypotheses predictions about the convenience store chains, accurate data analysis
utilizing standardized statistical methods is crucial to determine the validity of empirical
research. Statistical formulas such as regression, t-test, R-square, and various types of
ANOVA (analyses of variance) are fundamental to forming logical and valid conclusions. If
empirical data are significant under the appropriate statistical formula, the research
hypothesis is supported. If not, then the null hypothesis is rejected (or, more correctly, not
rejected), meaning no effect of the independent variable(s) is observed on the dependent
variable(s). Ideally, empirical research yields empirical evidence, which can then be
analyzed for statistical significance or reported in raw form.
75

This study utilized a quantitative method to ensure the validity and reliability of the
proposed hypotheses. We employed corporate financial statement data to assess the
brands financial value to the firm and relationships with the corporate performance, EVA
and MVA. However, financial approach cannot assess the consumers perceptions,
feelings, and attitudes towards the brand; therefore, customer survey is utilized to measure
consumers mindsets and insights for branding application in this study. While studying
brand equity using either a consumer-based (qualitative method) or a financial-based
(quantitative method) approach has yielded valuable insights on the different ways that
brand equity can be measured and managed (Kartono, 2005).

3.4 Research Design- Financial Approach


The purpose of this quantitative research is to quantify the effects of brand value on store
performance, EVA and MVA. Therefore, the research is designed for three purposes: 1) the
specification of the relationship between research variables 2) appropriateness of the
research sample and 3) justifying the method of analysis.

The measurement model adopted for this study is under following considerations: The
model should 1) provide robust estimates of brand value and components; 2) be practical
for convenience store chains and franchise industry to implement; and 3) be usable for
store marketing investment. In document 4, we have tested the application of Hirose
brand valuation model in 10 chain stores. The results showed that price prestige driver
and loyalty driver are the two main constructs of brand value and brand value has positive
relationship with corporate EVA, MVA and profitability.

In documents 5, we will enlarge the

sample panel to 20 chain stores utilized multivariate statistical methods to include many
variables in a single analysis and to assess the separate contribution of each variable
within an overall model.

These multivariate analyses are including exploratory factor

76

analysis, principal component analysis, and multiple regression analysis. Through this
multivariate analysis, we expect to obtain more specific relationship between each brand
value variable (PD, ED, LD) and brand equity variable (service quality, perceived value,
customer satisfaction and customer loyalty), corporate profitability (ROA, ROE, GM, PM,
NM), EVA and MVA.

3.4.1 Empirical Sample


This study has selected the chain store and franchise market in Taiwan as the market
place for empirical sample due to these markets operate in a turbulent environment; they
are undergoing growth and are still technically driven.

In addition, convenience store

chains and franchise industry is reflected by dramatic increases in marketing and branding
activities. This is particularly relevant for this study..

The determining characteristics of the convenience store chains have been outlined in
document 3. Twenty chain store brands were selected including 16 listed in Over the
Counter (OTC) and four listed in Gre Tai Securities market (GTSM ) as shown in Table 3.1.
They are:
Eleven Appliance, convenience or department chain stores
Five 3C chain stores
Four Restaurant chain stores

The study estimates brand value at the level of the corporate brand (e.g. 7-Eleven and
Family Mart) instead of the individual store (e.g. 7-Eleven, Starbucks or Family Mart, The
bread). Therefore, the sample frame covered corporate brands alone.

77

Table 3.1: The Top 20 Chain and Franchise Stores in Taiwan

Brands

Establish year

Numbers of stores

7-Eleven

1987

47009

Appliance convenience chain

Shin Shin

1971

Supermarket, Department, Cinemas

Far Eastern

1967

81

Bank, Department, Hypermarket , Hotel

Collins

1969

89

Apparel chain

Tonlin

1982

Department chain

Ruentex

1976

72

Apparel and Hypermarket

Family Mart

1988

2000

Appliance chain

Mercuries

1965

300

Appliance, 3C and Restaurant

Test Rite

1978

30

Appliance and DIY chain

Les Enphants

1973

1052

Textile, Toy and Furniture chain

Poya

1997

44

Appliance, Cosmetic chain

Ten Ren

1975

114

Tea leaves and Restaurant chain

Greatwall

1960

70

Restaurant chain

Nan Chow

1950

11

Restaurant chain

Nan Ren Lake

1989

28

Hotel and Restaurant chain

Tsann Kuen

1978

150

3C chain

Synnex

1988

149

3C chain

E-Life

1986

84

3C chain

Sunfar

1995

73

3C chain

Sampo

1962

50

3C chain

Services

The numbers of stores were estimated based on each corporate official website in 2011.

78

3.4,2 Instrument and Measures


3.4.2.1 The Hirose Model
In document 4, we have utilized Hirose valuation model to calculate brand value of 10
chain stores and to investigate the function of brand value. The results showed that
brand has price prestige drivers and loyalty driver.

However, there was no significant

correlation between brand value and expansion driver. In document 5, we will enlarge
data panel from 10 to 118 to further investigate how each of the key drivers of brand value
respondents to corporate value and performance.

The Hirose committee proposes a valuation methodology expressing brand value as:

Brand Value (BV)= f (PD, LD, ED, r)

The ten-year (2000-2009) annual financial data were collected for brand value calculation
from various stock exchanges as shown in Appendix 1.

The Hirose committee performed a trial calculation to measure brand value employing
historical data for three, five and 10 years, and as a result, the committee selected the past
five years which gives the highest correlation with the recent market capitalization amount.
Data for the past three years was not stable and for the past 10 years is unable to reflect
recent structural changes in the economy as well as increasing speed of corporate
innovations (Hirose, 2002). Therefore, this study adopts 2004-2009 as models test period.
The period of 2004 to 2009 included the sharp run-up in the market to the peak of the
Financial Crisis in 2007 and a steep decline thereafter. The period was characterized by
generally higher prices and ended with the so-called Financial Crisis Recession of 2009.

79

Financial Data to be collected includes: Sales, Cost of Sales, Operation Cost, Advertising
and Promotion Cost, Overseas Sales, Non-core Business Sales.

3.4.2.2 The Profitability Measure


Financial ratios are methods of comparing and investigating the relationships between
different pieces of financial information.

The best known and most widely used

profitability ratios are Return on Assets (ROA), Return on Equity (ROE), Gross Margin
(GM), Net Margin (NM) and Pretax Margin (PM). These five rations are measured how
efficiently the firm manages operations (Ross et al., 2006)

Return on Assets (ROA) measures profit per dollar of assets. The calculation model is:

ROA= Net Income/ Total Asset

Return on Equity (ROE) measures how the stockholders fared during the year. Therefore,
ROE is the true bottom-line measure of performance.

ROE= Net Income/Total Equity

GM= Gross Income/Sales


NM=Net Income /Sales
PM= Net Pretax Income/Sales

The ROA and ROE usually measure performance over a prior period; thus, this study
applied a six years average equity and average assets to calculate the five ratios. The
financial data collected from the 20 chain and franchise stores are including total assets,

80

total equity, net income, gross margin, net margin, and pretax margin as shown in
Appendix II.

Each of the five ratios is regressed on brand value to examine the

contemporaneous effect of brand value on profitability.

3.4.2.3 The EVA and MVA Model


Unlike traditional profitability measures, both EVA and MVA measures take into account
the cost of equity capital. The goal of EVA and MVA calculation is to maximize shareholder
wealth and corporate market value. EVA is a measure of a company's financial
performance based on the residual wealth calculated by deducting cost of capital from
operating profit (adjusted for taxes on a cash basis). An essential component of EVA is the
weighted Average Cost of capital (WACC) determined elements of the capital structure
decision. The formula for calculating EVA is as follows:

EVA= Net Operating Profit After Taxes (NOPAT) - (Capital * Weighted average

Cost of capital (WACC))

Or

(RONA- WACC) x Invested Capital

NOPAT = Operating Income x (1 - Tax Rate 25%)


NOPAT is a more accurate look at operating efficiency for leveraged companies. Taiwans
corporate tax rate is 25% and tax savings account will be deducted from net income.

Invested capital = short-term debt + long-term debt + other long-term liabilities +


shareholders equity

WACC= (E/V) X Re + (D/V) X Rd

Re = cost of equity
Rd = cost of debt
E = market value of the firm's equity
81

D = market value of the firm's debt


V=E+D
E/V = percentage of financing that is equity
D/V = percentage of financing that is debt
Tc = corporate tax rate

EVA is a tool to evaluate corporate debt-equity ratio and maximize the value of a share of
stock. The financial data to be collected includes: cash, receivables + inventories +
prepayments, fixed asset, short-term debt, short-term NIBl, long-term debt, other long-term
liabilities, shareholders equity, total sales and total expenses as shown in Appendix III.

R&D (research and development) capital expenditure was not separated from total
expense on the income statement in 10 chain and franchise companies. Therefore, the
cost of capital expenditure will exclude R&D expense. Finally, EVA is regressed on brand
value to examine the effect of brand value on optimal capital leverage.

MVA is the present value of a series of EVA values. MVA is economically equivalent to the
traditional NPV measure of worth for evaluating an after-tax cash flow profile of a project if
the cost of capital is utilized for discounting. MVA calculation shows the difference between
the market value of a company and the capital contributed by investors (both bondholders
and shareholders). This is the sum of all capital claims held against the company plus the
market value of debt and equity.

MVA = Companys Market Value Invested Capital

Higher MVA indicates better market value. A high MVA indicates the company has created
substantial wealth for shareholders. A negative MVA means that the value of

82

management's actions and investments are less than the value of the capital contributed to
the company by the capital market (or that wealth and value have been destroyed). The
financial data to be collected includes a six-year average stock price and market value and
firm equity as shown in Appendix IV. The MVA is regressed on brand value to examine the
association.

3.4.3

Application of Statistical Analysis

1. Descriptive statistics

An initial inspection of the data revealed main features of a collection of twenty corporate
brands brand value, prestige driver, loyalty driver, expansion driver, profitability, EVA, and
MVA quantitatively.

The aim summarized a data set quantitatively without employing a

probabilistic formulation or an extreme outlier.

Together with simple graphics analysis,

this inspection formed the basis of virtually every quantitative analysis of data.

2. Pearsons r analysis

Pearsons r is a method for examining relationships between interval/ratio variables. This


correlations analysis assessed the Hypotheses 1-6 assumptions of linearity.

Liner was

employed to determine the relationship between BV, PD, LD, ED and the various
performance indicators (i.e. profitability rations, EVA and MVA) as follows:

the coefficient lie between 0 (zero or no relationship between the two variables) and 1
(1 perfect relationship), this indicates the strength of a relationship.

the closer the coefficient is to 1, the stronger the relationship; the closer it is to 0, the
weaker the relationship;

the coefficient is either positive or negative- this indicates the direction of a relationship.

83

To assess the reliability and validity of quantitative measurement models, the following
statistical tests were assessed:

The t-test: this test of means is to test the difference of each mean scores, if the
significance level is 0.05 or less, the null hypothesis is rejected, and concludes that one
variable does differ from the other in terms of brand value.

ANOVA (F-statistic): the test involves comparing variances to make inferences about
the means. The variance of the means of the variables will be large if the variables
differ from each other in terms of brand value. The ANOVA test results in what is
called the F-statistic. The larger the ratio of variance, the greater the value of the
F-statistic.

A high F-statistic indicates that the results are significant.

If the

significance level is 0.05 or less, the null hypothesis is rejected.


-

Correlations: this is a measure of association (relationship) between two or more


variables, and is calculated from standardized measures of covariance. Three
correlations exist: positive, negative and zero.

With positive correlation changes in

one variable are accompanied by changes in the other variable and in the same
direction. (e.g. larger values in one variable tend to go with larger values in the other).
If the two variables change in the opposite directions, larger values on one will tend to
go with smaller values on the other. This is called a negative correlation.

If no clear

tendency exists for the values on one variable to move in a particular direction (up or
down) with changes on another variable, then they are zero correlation. The
correlations coefficient (r) cannot lie outside the range between -1 and +1. Those two
values of r represent, perfect negative and perfect positive correlation. When r=0,
there is no correlation.
-

R2: the coefficient of determination R2 is employed in the context of statistical models


whose main purpose is the prediction of future outcomes on the basis of other related

84

information. Proportion of variability in a data set accounts for the statistical model
provides a measure of how well future outcomes are likely to be predicted by the model.
In the linear regression model, R2 is simply the square of the sample correlation
coefficient between the outcomes and their predicted values. The coefficient of
determination ranges from 0 to 1.

3. EFA (Exploratory Factor Analysis)

EFA used to the study has a set of questionnaire items with no clear idea of what
constructs might underlie them. Confirmatory factor analysis (CFA) is used to the
constructs which have been design to be measure in the study. The aim is to explore
what constructs there might but rather to confirm a structure that has been designed into a
study.

Both types of model share a distinction between common factors and specific

factors. The method derives estimates for the factor loadings of each of the common
factors and the specific factors, and gives summary indices (call eigenvalues) of the
importance of each of the common factors, shown by how much of the covariation among
the observed variables each one accounts for. The size of the loadings for the common
factors determines the correlations among the observed variables.

The size of the

loadings for the specific factors determines the reliability of the common factors. Factor
analysis (EFA and CFA) is used to estimates to select a subset of common factors, usually
retaining only the largest investigates variations in three or four observed variables mainly
reflect the variations in a single unobserved variable, or in a reduced number of
unobserved variables. The observed variables are modeled as linear combinations of the
potential factors, plus "error" terms. The information gained about the interdependencies
between observed variables can be used later to reduce the set of variables in a dataset.
This study will adopt EFA to explore the attributes of each construct based on customers
survey.

85

4. Principal Component Analysis (PCA)

PCA performs a variance-maximizing rotation of the variable space; it takes into account all
variability in the variables. Factor analysis estimates how much of the variability is due to
common factors ("communality"). The two methods become essentially equivalent if the
error terms in the factor analysis model (the variability not explained by common factors,
see below) can be assumed to all have the same variance (Wikipedia).

Cronbachs alpha: the Cronbachs alpha is a test of internal reliability.

Test results

vary between 1 (denoting perfect internal reliability) and 0 (denoting no internal


reliability). The figure of 0.80 is typically employed as a acceptable level of internal
reliability.

3.5 Research Design- Customer Survey


In pursuing brand management, information other than the brand value amount is required.
The Hirose Committee (2002) addressed that in addition to quantitative information such
as financial data of brand value, non-financial data on corporate performance behind the
data is also important. Without proper understanding about the cause and effect
relationship between financial information and customer-based information such as
constructs of brand equity, one cannot utilize this information in brand management
effectively (Hirose, 2002).

Extensive customer-based marketing research involved collecting primary data on


consumer mindset measures of brand equity from consumers perspective through surveys,
interviews or experiments, and applying the attitudinal or behavioral constructs to assess
the consumers preference, image, satisfactions and attitudes towards the brand.

86

Fetscherin and Mark (2008) adopted Hedonic regression model10 to test the relationship
between price and the various product attributes, market share, product variety and brand
equity.

Holehonnur et al. (2009) utilized customer attitudinal and purchase intention

measures to test Rust et als customer equity framework and explored the drivers of value
equity and brand equity.

Yoo et al. (2000) built on Aakers (1991) basic model to

incorporate the brand-building efforts that influence the various dimensions of brand equity
and are also influenced by the provision of value to the firm.

Yoo et al. added a separate

construct of brand equity that was not presented in Aakers original model. The major focus
of Yoo et al.s (2000) research was to explore the brand-building efforts and the resulting
effects of price on the dimensions of brand equity. Yoo et al. investigated the effects of
price, store image, distribution intensity, advertising spending, and price deals on three
particular dimensions of brand equity: perceived quality, brand loyalty, and brand
awareness.

Extant brand equity measurements can be classified into two terms: relative or absolute.
However, when comparing a limited number of brand equity scores (as in the present
study), absolute measures are virtually meaningless.

This investigation relied on a

relative measure to examine whether the service quality, perceived value, customer
satisfaction and customer loyalty are positively related to brand equity and do affect
performance as conceptualized by prestige driver, loyalty driver and expansion driver.
These are core equity dimensions and are expected to be relevant antecedents of
corporate value and profitability.

Therefore, a customer-based questionnaire was

developed based on four dimensions of retail brand equity i.e. service quality, perceived

10

Hedonic regression model is a revealed preference method of estimating demand or value.

87

value, customer satisfaction and customer loyalty for convenience store chains as
proposed in literature section 2.3.1-4.

Peterson (2000) noted that the art of questionnaire design is an imperfect process. This is
because it involves the development of a structured instrument that will facilitate effective
communication between researcher and participants. Each questionnaire is, therefore,
unique in terms of the investigation for which it is developed. This recognition led to the
consensus that questionnaire development is an imperfect process with no standard
procedures for developing a good one (Churchill, 1999; Kumar et al, 1999; Malhotra and
Birks,1999).

However, a widely recognised procedure exists through which a consistent

and reliable questionnaire can be developed. The process that will be adopted to guide the
development of the questionnaire for this investigation is that of Maihotra and Birks (1999,
p. 320) and Peterson (2000). This process is depicted in Figure 3.5:

Specify the information needed

Specified type of questionnaire administration

Initial item pool

Determine the content of individual questions

Determine form of response to each question

Determine sequence of questions

88

Determine physical characteristics of the questions

Pre-test the questionnaire to eliminate problems

Revise questionnaire if necessary

Figure 3.5: Questionnaire Design Process (Source: Maihotra and Birks, 1999)

An online survey was administered targeting consumers in Taiwan who have shopping
experience in convenience stores. The questionnaire intended to render the respondents
actual and honest responses to the questions; therefore, no incentives were employed to
encourage respondents participation in this study. The objective of this survey was to
assess the usefulness of the Cronnin and Taylors (1992) SERVPERF, Petricks (2002)
SERV-PERVAL , Czepiels et al. (1974) customer satisfaction and Gronholdts et al. (2000)
customer loyalty scale.

The survey utilized a non-probability sampling method and the

unit of analysis was the individual customer. This survey was conducted using 104
software, a leading human resource company who have 5 million members to offer an
internet-based survey tool in Taiwan. The survey combined four different sets of items
(scales), each scale was assigned to measure one of the four constructs. The
measurement adopted a 5-point Likert-scale 11 .

The resulting scale is the sum of

responses on several Likert items. The questionnaire was per-tested among twenty

11

A Likert scale is a psychometric scale commonly used in questionnaires, and is the most widely
used scale in survey research. When responding to a Likert questionnaire item, respondents
specify their level of agreement: i.e. strongly disagree, disagree, neither agree nor disagree,
agree and strongly agree.

89

respondents, who were drawn from the target population explained in the following section.

3.5.1 Expert Review of Initial Item Pool (Content validity)


An initial pool of items was generated for possible inclusion in a multi-item scale. According
to Peterson (2000):
A multi-item or summated scale consists of a number of closely related individual
rating scales whose responses are combined into a single index or composite score
or value.

Multi-item scales are typically used when measuring complex constructs that are not easily
captured by a single question (Kerlinger and Lee, 2000). In constructing a multi-item
scale one need to ensure that items generated were adapted to suit the specific
characteristics of convenience store chains.

These questions are likely to capture information about different aspects of a complex
construct. Typically, potential scale items that are relevant for capturing the constructs are
gathered from several sources. In this investigation items were gathered from ACNielsens
survey of attributes of convenience brand equity conducted in 2007 and 2008 as shown in
Table 3.2. These items were grouped according to the specifically defined constructs that
they are meant to capture. Scholarly experts were then consulted to review this initial pool
of items.

90

Table 3.2: Attributes of Convenience Stores


2007

2008

Vary

1. Convenient to get to

2. Ready to eat food and drink is of high quality

3. Provide delicious ready to eat food

NA

NA

4. Provides their own brands

NA

NA

-1

6. Has membership system offerings great rewards

NA

NA

7. Wide selection of high quality brands and products

12

8. Has programs that reward regular purchases

11

9. Always has products people want in stock

10. Pleasant store environment

10

-8

11. Staff provides friendly service

11

-5

10

12

-2

13

-10

14

14

15. Efficient checkout counters

15

-7

16. Clean and hygienic store

16

-11

17. Good value for money

16

17

-1

18. Variety of convenient service (ATM, copy machine)

NA

18

NA

19. Wide range of snack foods (chips, drinks etc.)

13

19

-6

20. Easy to find parking

15

20

-5

21. Long opening hours

17

21

-4

Attributes

5. Can find what they need quickly and easily

12. Wide product range and variety


13. Well presented display of products
14. Appealing and interesting promotions

(Source: ACNielsen 2008)

91

The experts consist of marketers in the area of marketing strategies, consumer behaviour,
brand management and new business development. This group of practitioners examined
the different types of constructs in the context of retail brand equity. Additionally, the
questionnaire and the relevancy of each item in eliciting information from respondents
were also reviewed.

The role of experts in multi-item scale development is different from

that of respondents in the pre-test. Experts in this process are primarily to establish the
content validity of the items in capturing the construct. Experts were also consulted to
examine the precision of the items gathered in representing the constructs of investigation.
The experts were then invited to identify the relevancy of various items grouped in terms of
their corresponding appropriateness for measuring each of the research constructs, items
were assessed in terms of clarity of definitions. The general contextual integration of the
pooled items and suggested alternative wordings were also assessed as listed in the initial
item pool of Table 3.3.

3.5.2 Mode of Questionnaire Administration


Two important factors exist to determine the mode of on-line survey adopted for this study:
the sample frame geographical location and efficiency response rate/speed.

Since

convenience stores are located all over Taiwan, sample frame will not be in a specific
geographical area.

Meanwhile, 70.1% of the Taiwanese people use the Internet (a

breakdown of internet user by age shows that 34.4% belong to the 15-24 age group,
28.1% to the 25-34 group, 28.6% to the 35-44 group), they meet chain stores focus
groups age of 15-45 for this research. In addition, following advantages of on-line survey
concluded by De Leeuw and Nicholls in 1996 was also considered:

1. Easy to use: Beckenbach (1995) reports that more than 80% of the respondents have
no problem at all using a computer and interviewing program.

92

2. Experience of privacy, more self-disclosure, less sensitive to social prestige bias.


Weisband and Kiesler (cited by de Leeuw) found strong support for the hypothesis that
respondent experiences a higher degree of privacy and anonymity, which would lead to
more self-disclosure and less social desirability bias compared with self-administered
paper-and-pencil questionnaires (PAPI).

3. Less time pressure


The freedom respondent is given, provides them with greater motivation. The quality of
the data is high because respondents need not hurry to finish the interview. They can
take their time to answer all questions.

Response caused by respondent or interview

errors, is virtually eliminated (Nicholls, et al., 1997).

4. Less impact of interviewer characteristics


Pondman (1998) shows that refusal rates of interview differ significantly between
interviewers gender, age, experience, social skills, physical appearance and even voice
characteristics (Dijkstra 1983, Couper & Groves, 1992, Smit, 1995). Therefore, on-line
survey can avoid above concern.

Base on De Leeuw and Nicholls (1996)s statements, this on-line survey expects to
achieved a higher response rate (above 25%), a faster response speed, and lower cost.
However, the opportunities to go deeper into issues that may arise from the research
investigation are not offered.

3.5.3 Content of Individual Questions


The questionnaire for this study was divided into two parts and was designed to measure
the influence of various attributes on retail brand equity. The information sought for this

93

investigation is introductory and substantive information. Each section will be addressed in


turn.

3.5.3.1 Introductory Section


This section consists of 11 questions designed to collect two types of information. These
are rapport building and screening information. The first two questions are screening
questions included to ensure compliance with the sample. The first question (1) "Have you
being living in Taiwan for the past year" will screen respondents to comply with the sample
requirement. Respondents answering 'no' to this question are automatically excluded
from the survey by requesting that they terminate their participation in the survey.
Respondents who are Taiwanese residents are further screened to ensure those with
shopping experience within the past three months to further improve the data accuracy.
This is because those who have shopped within the past three months are more likely to
remember their preferences than those who have not shopping recently. Therefore,
question (2) asked respondents: "Have you shopped in convenience stores in the past
three months? who have been shopping in convenience stores within the past three
months are included in the survey.

These first two questions are for screening respondents to comply with the sampling
requirement at the data collection stage. The principal objective of this screening is to
eliminate possible errors due to respondents not shopping in convenience store in Taiwan.
This is particularly important as retail brand familiarity is an integral part of consumer brand
attitude formation (Riezebos, 1994) and decision making process. Question controlling for
consumers' lack of knowledge, or for having a definite attitude to the research stimulus, is
crucial to the accuracy of data collected. In addition to the screening questions, the first
section will also collect respondents' age (3a) and gender (3b). Others that will be included

94

are those for eliciting respondents' regularity of shopping (3c), location (3d), and basket per
purchasing (3e), will also be elicited in this section. The last question in this section was to
identify the respondents convenience store preferences for the following substantive
questions.

3.5.3.2 Substantive Information


This substantive question section contains 36 specific items assessing the participants
perception of the four dimensions of retail brand equity.

This section is the most

important part to collect the critical information to accomplishing the objectives of the
research study (Kumar et al, 1999; Peterson, 2000).

This section can also contain other questions that a researcher specified as related to the
research topic or important for the study as a whole (Kumar, et al, 1999; Maihotra and
Birks, 1999; Peterson, 2000). Scaling is a form of measurement. This survey adopted
Likert type scales that requires respondents should: Indicate a degree of agreement or
disagreement with each of a series of statements about the stimulus objects (Maihotra and
Birks, 1999, p.296). The Likert scale can easily be designed and administered. Also,
respondents do not have problems understanding the items (Malhotra and Birks,1999) and
they are less likely to experience difficulties in finding the opposite value on the scale. One
uniform set of response categories exist providing clarity for each item (Peterson, 2000).
In the scale items respondents will be required to assess the rating or ranking of each item
(Churchill, 1999; Lehman et al, 1998).

The service quality in questions 1 to 11 in the questionnaire are scale items designed to
measure customer purchasing behavior i.e. the assumption that service quality is positively
related to brand equity.

Cronin and Taylor (1992) suggested that service quality is

95

multi-dimensional, consisting of a number of factors, namely tangibles, empathy,


responsiveness, reliability and assurance (Cronin and Taylor 1992; Parasuraman et al.
1985). This implies that the instrument intended to measure service quality consists of a
number of attribute statements. The items in the first 11 questions will consist of five
aspects of service quality, ranging from 'strongly disagree' to 'strongly agree'. Strongly
disagree' will be assigned 1 with the value going up in number to 5 for 'strongly agree'.

The scale for perceived value is based on Petrick (2002) indicated perceived quality (four
items), emotional response (five items), monetary price (six items), behavioural price (five
items) and reputation (five items) to address the overall evaluation of perceived value and
to avoid considering specific elements of value.

Since items in perceived quality and

service quality are duplicated, this study adopted emotional, monetary price, behavioural
price and reputation (question 14-24) for perceived value measure scale.

The scale for customer satisfaction refers to Czepiels (1974) and Cronin et al. (2000)
integrated satisfaction level that included three items (question 27-29): a customers wise
choice, a good shopping experience than expect and provide product or service meet
exactly what customer need. The results focus the outcomes of customer satisfaction and
the intention to continue to shop in the preference store.

The scale for customer loyalty was developed based on Gronhoklt et al (2000) that
included four items (question 32-35): willing of repurchasing, cross purchasing, customers
first choice, willing to pay a little higher price than competitors and recommends to others.

The scale for brand equity was developed based on Hiroses (2000) that included three
brand functions: price prestige, customer loyalty and expansion power. Since the statistic

96

result showed the coefficient of expansion driver and brand value is 0, it represented the
two variables has negligible association.

Therefore, the survey will delete expansion

power from measure scale and design questions to two brand value drivers: price prestige
drivers and loyalty driver in the end of each measure scales. i.e. Q12-13, Q 25-26, Q30-31,
Q36.

Table 3.3: Measure Scales of the Retail Brand Equity Constructs

Attributes

Adopt in Convenience Store Survey

Service Qualtiy : Cronin Jr. and Taylor (1992) SERVPERF Scale


-

Appealing physical facilities

Q1. Clear sign broad.

Up-to-date equipment

Q2. Variety of convenient service (ATM, copy


machine and etc.).

Visually appealing service

Q3. Clean and hygienic store.

material

Q4. Well presented display of products.

Provide service right the first Q5. Wide selection of high quality brands and
time

products.

Convenient operating hours

Q6. Long opening hours.

Knowledgeable

Q7. Staff provides professional and friendly service.

Never too busy to respond to


request

Always willing to help the


customer

Interest in solving customer


problems

97

Prompt service to customers

Individual attention to the


customer

Have

customers

best Q8. Staff provides interesting promotions and new

interest at heart
-

product information.

Should tell when services will


be performed

Insist on error free records

Q9. Customer complaints management.

Customer feels transactions Q10. Ready to eat food and drink is of high quality.
are safe

Employees

who

are Q11. Efficient and trustworthy checkout counters.

trustworthy
Q12. Will above service quality make you willing to
pay a higher price to stores products or services?
Q13. Will above service quality make you willing to
repeat purchasing stores products or services?
Perceived Quality : Petricks (2002) measurement Scales
-

It makes me feel good

It gives me pleasure

It gave me a sense of joy

It made me feel delighted

It gave me happiness

Worth the money

Appeared to be a good

Q14. Pleasant store environment.

Q15. It made me feel delighted and happiness.

Q16. Appealing and interesting promotions.

bargain

98

Reasonably priced

Q17. Reasonably priced services and products


offered.

Economical

Q18. Has a membership system that offers great

Worth the money

rewards.
Q19. Have programs that reward regular purchase.

Fairly priced

Q20. Provides stores private brands.

Easy to buy

Q21. Convenient to get to.

Easy to shop for

Q22. Always have products I want in stock.

Had a good reputation

Q23. Product and service is of high quality.


Q24. Has a good and reliable stores reputation and
image (CSR).

My choice to purchase in this Q25. Will above perceived value make you willing to
store was a wise one

pay a higher price to stores products or services?

Willingness of repurchasing

Q26. Will above perceived value make you willing to


repeat purchasing stores products or services?

Customer Satisfaction: Czepiel et al (1974), Cronin et al. (2000)


-

My choice to purchase in this Q27. My choice to shop in this store is a wise choice.
store was a wise one

Q28. The overall shopping experience was better


than I expected.
Q29. The service and products were exactly what I
needed.
Q30. Will above customers satisfaction make you
are willing to pay higher price to stores products or
services?
Q31. Will above customers satisfaction make you

99

are willing to repeat purchasing stores products or


services?
Customer Loyalty: Gronholdt et al. (2000)
-

Willingness of repurchasing

Q32. I am willing to repurchase from this store

Recommends to others

Q33. I will recommend it to someone who seeks my


advice.

Cross purchasing

Q34. I am willing to buy new products and service


from this store

X store is my first choice

Q35. When I want to go shopping in convenience,


this store is my first choice.

Willing to pay a little higher Q36. I am willing to pay a higher price to purchase
price than competitors

service and products from this store than its


competitors.

3.5.4 Sequence of Questions


Question sequence is the arrangement of individual information that one is seeking to elicit.
Where participants will be requested to personally complete a questionnaire the sequence
of the questionnaire is important. This is because it facilitates efficient administration to the
appropriate sample (Peterson, 2000). The sequence of questions is an important issue to
consider making the questionnaire easier for respondents to complete. The questionnaire
will, therefore, be sequenced to avoid bias by structuring the order in which questions are
asked and answered. Making sure that none of the research constructs are identified in the
body of the questionnaire will carry this out (Tabimbola, 2003). According to Peterson
(2000) an importance exists to sequence a questionnaire to minimize what are typically
termed context effects. This is to limit respondents' ability to 'second guess' and respond in

100

the way they think the research wants rather than how they actually feel. This sequence
outline follows guidelines for questionnaire protocol by eliciting introductory and then
substantive information (Peterson, 2000; Churchill, 1999).

In the substantive information portion, since items describe customer satisfaction were
made up of two antecedents of satisfaction derived from Cronin Jr. et al. (2000) , Petrick
(2002),

Anderson and Sullivan (1993) models i.e. store Service Quality Scale and the

Perceived Value Scale, the question started from service quality scale and perceived
value scale. Each Store Service Quality Scale and Perceived Quality referred to 11 item
scale proposed by ACNielsen and reviewed by exports.

In addition, Bitner (1990)

proposed that customer satisfaction is the antecedents of customer loyalty.

Therefore,

the third section of questions was customer satisfaction and the last section was customer
loyalty.

The questions of four constructs of retail brand equity were designed in the

sequence of service quality, perceived value, customer satisfaction and customer loyalty.

3.5.5 Physical Characteristics of the Questions


The physical characteristic of the questionnaire is important to ensure an effective and
cooperative response from participants which assists the researcher in securing
acceptance of the questionnaire. An importance exists for research in processing the data
as well (Churchill, 1999). These factors were taken into consideration in determining the
physical character of the questionnaire. The questionnaire opened with a front-page
confidentiality statement, an assurance of anonymity to encourage participation. The
introductory page will offer full disclosure to participants by letting them know the purpose
of the research. They will also be able to know who is conducting the investigation.

A strong recommendation exists to number the questions to aid completion, editing, coding

101

and tabulation (Peterson, 2000; Malhotra and Birks, 1999). Therefore, each question was
numbered. The length of the questionnaire is also an important issue to consider.
Commonly people believed that long questions are undesirable.

Peterson (2000)

suggested that the relative length of a questionnaire varies according to the purpose of the
research. However, Jobber and Saunders (1986) found that 58% of the mail surveys in an
industrial setting were between four and ten pages. Bryman and Emma (2003) provided
general advice to keep questions short is the main piece of advice to be followed.
Therefore, this study will reduce the physical length of the questionnaire to four pages to
improve the perception of the length.

The questionnaire was first developed in English and at a later stage translated into
Chinese.

In the Appendix V, an overview of the complete questionnaire is provided.

3.5.6. Questionnaire Pre-test


The next step in the development of a measuring instrument for this investigation is to test
the questionnaire developed. This is to ensure that potential difficulties are dealt with prior
to its full-scale administration. Pre-testing is the administration of a questionnaire on a
small sample to identify and eliminate potential problems (Maihotra and Birks, 1999;
Peterson, 2000). The literature on questionnaire design recommends that a new scaling
instrument should be subjected to a rigorous pre-test prior to conducting the full survey (e.g.
Churchill, 1999; Oppenheim, 1992; Sudman and Bradbum, 1982). Utilizing more than one
pre-testing approach and method to identify potential questionnaire or question problems
was also suggested (Kerlinger and Lee, 2000; Peterson, 2000).

Pre-testing ensures that the instrument meets the researcher's requirements in terms of
the information that will be collected (Kumar, et a!, 1999) as well as its adequateness. In

102

this instance, pre-testing plays a role in questionnaire design that is similar to that of test
marketing a new business (Churchill, 1999). The purpose in both instances is to ensure
that the questionnaire is appropriate for the purpose. Churchill (1999) recommended that
the pre-test stage should be conducted by personal interview irrespective of the method of
administration. This personal interview method has two key advantages which are enable
the administrator to probe for further clarification and to receive feedback from the
respondents in a way that cannot be done with the online-administered method.
Therefore, a protocol interview was conducted.

3.5.7 Pre-test: Protocol Interviews


In developing this questionnaire, two protocol interview and ten on-line pre-test were
conducted. Verbal protocol in which the respondent thinks out loud as they answer each
question was also used to pre-test the questionnaire. Limits exist to how well a pre-test can
detect errors (Kumar et al, 1999, p. 324). A protocol pre-testing (Peterson, 2000, p1 17) is
a method involving probing questions regarding the questionnaire after completion. This
method of pre-testing was applied with twelve respondents. Two were professional retail
marketers (one is the marketing director of B&Q, another is the senior director of Nielsen
company). In short, they were expected to be critical of the whole questionnaire, rather
than just respond to it in terms of their attitude and opinions alone. Many things were
evaluated including the language, instruction, length and sequence of the questionnaire.
For instance, respondents to the verbal protocol suggested changes due to semantic
ambiguities and meaning connotations in the questionnaire. On completion the
questionnaire was amended in line with clarifications and suggestions generated. For
example, respondents perceived some of the questions as repetitious and duplications.
This necessitates further clarified this section of the questionnaire. Therefore, before the
questionnaire was finally designed, it was proof read by two marketing professionals from

103

the retail sector.

3.5.8 Application of Statistic Analysis


In deciding on the appropriate methods for customer survey analysis, Bagozzi and
Baumgartner (1994) recommend two important issues to be considered. Firstly, one needs
to consider the approach to measuring the research constructs. The second factor for
consideration is how to conceptualise the patterns of relationship between the researches
constructs. This study conceptualized retail brand equity as a complex construct, therefore
multivariate techniques is employed to better understanding the multifaceted nature of the
concepts.

Multivariate statistical methods are designed to allow researchers to include many


variables in a single analysis and to assess the separate contribution of each variable
within an overall model.

The purpose of this multivariate analysis is to find a way of

summarizing the relationship between variables that is simpler than the original data but
also captures the essence of that relationship. The basic logic is that items which reflect
features of an underlying construct will show common patterns of answering.

For

example, a customer who feels good about his or her shopping experience will tend to
respond in a consistently favourable way questions about different aspects of satisfactions.
Consistency in responses from study participants will produce correlations among items,
and these correlations are the starting point for identifying patterns that reflect underlying
constructs. In a measurement model (Figure 3.4), the observed variables are those which
are measured directly from questions and the latent variables are the constructs which
assumed are causal factors in how sample members respond to the observed variables.
The multivariate analysis methods adopted in this study are exploratory factor analysis
(EFA), principal component analysis, multiple regression analysis (MRA) and path

104

analysis.
1. Exploratory Factor Analysis (EFA): As stated in section 3.4.3.

2. Principle Component Analysis (PCA): As stated in section 3.4.3.

3. Multiple regression analysis (MRA)


MRA consists of a single dependent variable measures on a continuous scale and a set of
predictor variables which may be measured on continuous or category scale.

Regression

can be used for prediction (including forecasting of time-series data), inference, and
hypothesis testing, and modeling of causal relationships.

4. Path analysis
Path analysis is a statistical method of finding cause/effect relationships. Multiple
regressions focus on causality, path analysis can be viewed as a special case of structural
equation modeling (SEM) but no measurement model. Path analysis includes models
equivalent to any form of multiple regression analysis, factor analysis, canonical correlation
analysis, discriminant analysis, as well as more general families of models in the
multivariate analysis of variance and covariance analyses (MANOVA, ANOVA, ANCOVA).

5. Scale Reliability/validity Test


The statistical results were tested for: reliability, validity and dimensionality.
-

Reliability test: same as stated in 3.4.3.

Validity Test is to the assessment of systematic error components within the


measurement instrument. The hallmark of a good scale is to reduce error to a
minimum. Research conclusion actually should infer to what the theory set out to find
in the empirical test with minimal systematic error. The factor analysis results were

105

examined based on following questions. Do the indicators accurately measure retail


brand equity as conceptualised? Does the measure adequately reflect the depth of
the constructs as specified by the research? Five different types of validity issues are
of focal importance in scale reliability and construct clarification (Bagozzi, 1988, p.89).
The main types are content validity, criterion-related validity and construct validity.
1) Content Validity relates to whether the instrument is representative of the universe
of the property being measured (Kerlinger, 1992, p.4l'7). The analysis results were
confirmed by examining the attributes of each constructs relating to customers
preference and shopping experiences. This study attempted to determine the
content to which the preference response scores referred (i.e., whether they
represent shopping experiences of preference converience store, and what can be
inferred from them).

2) Construct Validity addresses the question of what construct the scale is actually
measuring. When assessing construct validity, the study attempts to answer
theoretical questions such as why the scale works and what deductions can be
inferred about the underlying theory (Cronbach, 1971, p.477). Construct validity is
a rigorous standard and the most sophisticated and difficult form of validity to
establish (Maihotra and Birks, 2000). Construct validity includes nomological,
convergent, and discriminant validity.

3) Criterion-Related Validity referred to as instrumental validity, is employed to


demonstrate the accuracy of a measure or procedure by comparing it with another
measure or procedure together which has been demonstrated to be valid.
Regression analysis can be applied to establish criterion validity. Independent
variables could be used as a predictor variable and a dependent variable could be

106

used as the criterion variable. The correlation coefficient between them is called
validity coefficients. This study scores constructs as the predictor variables of the
brand equity is the criterion variable.

If the tester passes the simulation test,

then the criterion should be met as being a safe driver. In other words, if the
simulation test scores could predict the road test scores in a regression model,
the simulation test is claimed to have a high degree of criterion validity.

Dimensionality: The multi-item scale includes several sets of items designed to


measure different aspects of retail brand equity as a multi-dimensional construct.
Since the scale contains items measuring different but related facets of retail brand
equity, it is mandatory to assess the basis for the hypothesis that the subset of
measurement items has something in common and can be regarded as alternative
indicators of the same construct (Gerbing and Anderson, 1988). Uni-dimensionality is
a characteristic set of indicators that have only one underlying trait or concept in
common, which is important to establish the dimensionality of retail brand equity as a
construct. Given the interrelationship between dimensionality and a measure of
reliability such as Cronbach's alpha, both measures are sometimes considered as
related analysis. However, alpha without uni-dimensionality is generally favoured,
while establishing uni-dimensionality may not preclude the assessment of coefficient
alpha (Churchill, 1999). One may not assess uni-dimensionality alone as a sufficient
basis for inferring reliability, but uni-dimensionality and Cronbach's alpha could be
assessed within the same data set (Pedhazur and Schmelkin, 1991). Differing
methodological perspectives on the issue of which one of the two measures should be
assessed first. As uni-dimensionality can be examined from the match between the
selected indicators and the theoretical definition of a construct, an importance exists
to establish strong reliability before uni-dimensionality (Hair et al., 1998).

107

Two important approaches for establishing uni-dimensionality on a scale are apparent


in published literature. The first approach is that reliability should only be assessed
following the establishment of uni-dimensionality of constructs ( Gerbing and derson,
1988; Hair, et al, 1998; Pedhazur and Schmelkin, 1991). The second approach is that
uni-dimensionality should only be assessed after the scale has been purified and the
reliability of the scale has been established (Churchill, 1999).

Underpinning the differences in the approach in scholarly literature is the argument


that uni-dimensionality is an assumption that underlies the calculation of reliability. For
example, if many items explain a factor with an acceptable alpha level, then they must
be explaining the same factor. However if the level reaches 1 (one), then the items in
the scale need to be reduced. However, reliability is also demonstrated when the
indicators of a construct have an acceptable fit on a single factor. One may, therefore,
argue that an analysis of uni-dimensionality should precede the assessment of
reliability. Thus, an importance exists to establish the dimensionality of retail brand
equity as a construct. Furthermore, the use of reliability measures (such as
Cronbach's alpha) does not ensure uni-dimensionality, but instead assumes that it
exists (Hair, et al, 1998).

A balance is struck between these two approaches by purifying the individual scales
that make up the composite scale through the EFA procedure before assessing
dimensionality. The dimensionality of retail brand equity was determined through the
EFA process. Evidence of uni-dimensionality is inferred from the resulting analysis of
EFA if items load significantly on a specific factor that is a non-trivial factor and makes
conceptual sense. This provided evidence to suggest that the items within the retail
brand equity scale are uni-dimensional (Hair, et al, 1998 ; Spector, 1992).

108

3.5.9 Sample size


The trustworthiness of a model depends on stability, meaning the sample size should be
appropriate to give confident results. This study utilized Confidence Interval for proportion
calculator to determine the confidence interval around the proportion obtained in this survey.
The assumed confidence level for this study is 95%, estimated proportion is 50% and the
estimate standard error is 0.05. Taiwans population is 23 million. Therefore, the appropriate
sample size is 384 based on Confidence Interval for proportion calculator model. Two
thousand questionnaires were randomly

distributed

to Taiwans consumers by

http//:www.104 survey.com. to meet the appropriate sample size of 384 based on typical
response rates for an online survey is 20%. In total 700 questionnaires were returned

yielding a total 500 valid responses.

Two hundred were eliminated because the

respondent had not completed the questionnaire. The overall response rate 500
completed questionnaires from two thousand bed spaces was 25%.

3.6 Summary of Chapter


This chapter outlines the strategy for carrying out quantitative investigation reported in this
study.

In Figure 3.4 discussed the conceptual framework of the research questions and

the effect of retail brand equity from financial and customer-based approach. The chapter
outlines the research design and the effect on the research method selection. The purpose
of employing a quantitative research method is to measure brand equity by both financial
and customer-based perspectives to bridge the gap of extant literature. The nature of the
information sought for testing the research hypotheses and how to obtain this was
conducted next. The development of the research instrument, the nature of the pre-test
that was administered, and the initial method of analysis were also discussed.

109

Chapter 4. Results and Analysis

4.0 Introduction
This chapter discusses the statistical evidence, the inference from which specific structural
justification for research hypotheses are drawn. The issues in this investigation encompass
two approaches- financial and customer-based brand equity. The first part investigates
the financial approach developing specific brand value propositions that explains
hypotheses one through six. We have tested the application of Hirose model in document 4.
This chapter will further investigate the multi-relationship between each models variable.
The second part of the customer survey examines the attributes of four brand equity
constructs and their relationships. Thirty- six questions were designed to indicate the
substantive variables for eliciting respondents' preference and attitudinal opinion for each
constructs. Following the gathering of substantive items, multivariate analysis was
incorporated to analyze the complex relationships between the constructs and brand equity
as proposed in hypotheses seven through ten.

This chapter presents the research results in the following sections. Section 4.1 reveals
brand value calculation and analysis for Taiwans top 20 chain stores. Section 4.1.1-5
presents the association and variation statistics for the Hirose model test, profitability ratios,
EVA and MVA models. Section 4.2 indicates the quantitative research outcome and
summary.

Section 4.3.1-4 underlies the process of developing a scale, item analysis and

discussion, factor identification and labeling. Section 4.3.5-9 presents the attributes
analyses of each construct and the principal components results.

Section 4.3.10-11 tests

the measurement models reliability and validity. Section 4.3.12 shows the correlation
between brand equity and the four constructs. Section 4.4 demonstrates the path analysis
results of retail brand equity and the link with brand value and financial performance.

110

Section 4.5 is the summary of this chapter.

4.1 Brand Value Calculation and Analysis


Appendices VI shows the brand value of the top 20 chain stores calculated based on
Hirose brand valuation model from year 2004 through 2009 (six years). The top three
six-year average brand value rankings are 7-Eleven US$74.03 million, Synnex US$19.72
million and Family Mart US$18.26 million. The following are the assumptions for brand
value calculation:
* The benchmark of the lowest cost of sales (sales/cost) for calculation of LD is Synnex
1.062 in 2007.
* Advertising and promotion cost was not separate from operating cost such as in
Mercuriess and Greatwall balance sheet. Therefore, we assumed the advertising cost is
the same as the operating cost.
* Discount Rate r: this study projected 10% as the expected future cash flows then
discount at an interest rate and perceived riskiness.

Table 4.1 shows the descriptive statistics of minimum, maximum, arithmetic mean standard
and standard deviation of all variables.

111

Table 4.1: Descriptive Statistics for


(unit: US$)

Brand Value and Ten Variables


Variable

BV

118

9903

PD

118

145

LD

118

.4767

.9745

.848860

.12000108

ED

118

2.75

1.0242

.17385

ROA

112

-.00513

26.48

.060304

0.438604

ROE

112

-.3976

61.18

.110242

.1008140

GM

112

0.058

0.6178

.258424

.1329807

NM

112

-.08

0.1535

.034712

.0412495

PM

112

-.2261

41.52

.055562

.0560372

EVA

118

-54460

MVA

118

-108762

Minimum

Maximum

74034136

Mean

Std. deviation

2.09E8

4.263E8

835685 2554750.28 5165245.384

688808 1928395.90 4242154.324


4936407 8443656.77

1.914E7

4.1.1 Association and Variation Statistics


Two different statistical methods were used to better understand the relationship between
brand value and the Hirose models variables (PD, LD, ED), five-profitability ratios, EVA
and MVA, such as correlation and regression analyses.

Given the exploratory nature of

the study, a regression specification places high structure on the four performance models
created and directly tests the impact of the variables of brand value.

However, the

performance measurement literature offers enough guidance to relate certain aspects to a


specific performance measurement model and thus the regression analysis is more
informative than a ny other statistical analyses. Six regression analyses were conducted
utilizing SPSS (Statistical Package for the Social Sciences) statistical software package.

The regression models were all statistically significant (ANOVA sig.= 0.000, p 0.001), the

112

p 0.4 weak and low,

interpreting correlation coefficient with explained variances is: 0.0


0.4

p 0.7 moderate, 0.7 p 1.0 very strong and high.

All regression models

were checked for assumptions of the confidence intervals, covariance matrix, model fit,
t-test, R squared change, part and partial correlations, co-linearity diagnostics,
Durbin-Watson and normal probability plot.

4.1.2 The Use of Hirose Model Variables


Tables 4.2 shows a correlation coefficient to measure the association between brand value
and three variables in Hypotheses 1-3. The results indicated, the coefficients 0.991 (coef

0.9) of the independent variable-prestige driver is highly correlated to BV. (R=0.983,


F=2190.87, D-W=1.907). This confirms Hypothesis 1 that the higher brand value, the

higher Prestige driver ( =0.081, t=29.307, P 0.000). The coefficients 0.162 (0.2

coef

0.2) of Loyalty driver show the association between two variable is positive but low,

confirming Hypothesis 2 that loyalty driver is positively related to brand value. Contrary to
expectations and result in document 4, a negative correlation between expansion driver
and brand value existed (p=-.057) rejecting Hypothesis 3. However, they were statistically
insignificant (sig=.027) representing that the two variables had negligible association.

These results confirmed the view of Keller, Aaker and Kapferer that higher levels of brand
equity such as perceived quality, brand associations and brand loyalty have a positive
influence on consumer choice, preferences and intention to purchase and pay a premium
price for the brand. Thus, the evidence showed that price prestige driver and loyalty driver
are the two main constructs of brand value in store chains and franchise industry.

113

Table 4.2: Regression Results of Brand Value Variables

Dependent variable: Brand Value


Independent variable:

PD

LD

ED

Pearson correlation

.991***

.162**

-0.057

t-test

79.781

2.392

.107

1.021

4.397E7

3.014E7

81.471

1.052E8

3237978.854

1.024

1.025

1.010

.000

.039

.027

Std. error

VIF
Sig.(one-tailed)
F

2190.87

Adj-R2

.983

D-W

1.907

*** Correlation is significant at sig=0.000

0.01 level (1-tailed).


* Correlation is significant at sig.0.05 level (1-tailed).

** Correlation is significant at sig.

4.1.3 The Use of Profitability Measure


Table 4.3 shows the coefficients of BV in four profitability ratios (ROA, ROE, GM, NM) are
statistically significant except for PM. However, due to VIF

10 revealed that some

common factors are responsible for the covariance among the observed variables based
on prior knowledge about the variance in the factors (Hair et al, 1998). Therefore, factor
analysis was utilized to classify six variables into two principal components: factor 1 and
factor 2 as shown in Table 4.4. Items with factor loading <0.5 were considered for deletion
while those with item-to-total scores equal or greater than 0.45 were retained. A scale

114

reliability analysis was assessed, to examine inter-item correlation. Items with inter-items
correlation equal to or greater than 0.30 were retained. Secondly, the communalities of the
items representing the amount of variance accounted for by the component solution of
each variable were assessed. Items with low communalities (<0.4) were considered for
deletion. Both scree plot and items with Eigenvalues >1 were assessed for all the items
retained.

A further test of factorability of the two principal components for the profitability scale was
judged appropriate by examining the Bartlett's test of sphericity (x2= 1026.037, df= 10,
Sig.=0.000) and Kaiser-Meyer-Olkin measure of sampling adequacy (0.753). As an
independent scale this reflects as a proper internal consistency as further indicated with a
standardized alpha value of 0.784. The two components (renamed PM and GM) were
evaluated as valid and reliable observed items for the latent dependent construct of
corporate profitability. This factor analysis suggests that PM and GM can be regarded as
an indication of corporate profitability. Therefore, further regression analysis is employed
to investigate the relationship between brand value and corporate profitability again.

Table 4.3 shows the coefficients of brand value are positively related to higher gross

margin (0.01 coef 0.045 0.1) and pre-tax margin (0.01 coef 0.015 0.1). However, the
Adj-R2 (0.002) with explained variances at 0.2%, have little statistical meaning in the case
of panel data. This result is similar to Yeung and Balas research evidence based on the
business week top 100 global brand value in 2007. Yeung and Balas literataure proposed
that one should focus on the significance of brands effects on internal profitability.

Firms

with higher brand equity generate higher brand value; margins can be greater (increasing
value and decreasing cost make branded companies more profitable) and the company
becomes less vulnerable to competition (Bendixen, Bukasa, and Abratt 2003). This

115

normally leads to better performance, both from a financial and a customer perspective.

Table 4.3: Regression Results of Corporate Profitability Variables

Dependent variable: Brand Value


Independent variable:

ROA

Pearson correlation

ROE

GM

NM

PM

.020

.023

.035

.040

.016

-1.048

2.615

.691

-.002

-1.747

Std. error

3.111E8

1.222E9

3.055E8

1.088E9

8.915E8

8.328E7

1.185E7

7.664E7

3.59E8

-7.179E7

12.731

10.382

1.128

1.378

1.707

0.415

0.401

0.352

0.332

0.433

t-test

VIF
Sig. (two-tailed)
F

4.853

Adj-R2

.148

D-W

.592

Table 4.4: Principal Component Analysis for


Corporate Profitability Variables
Eigen-

Variance

Cumulative

Rotated Factor loading

Cronbachs

Item-Total

Value

Factor 1

Alpha

Correlation

3.075

1.220

61.495

24.391

61.495

85.886

Factor 2

PM

.989

-.134

ROA

.988

-.134

ROE

.981

-.148

GM

.205

.804

NM

.341

.718

.992
.940

.993
.984

.309

.308
.308

116

Table 4.5: Regression Results of Profitability

Dependent variable: Brand Value


Independent variable:

Factor1 (PM)

Factor2(GM)

Pearson correlation

.015

.045

t-test

.165

.486

3.971E7

3.971E7

6569678.519

1.928E7

0.434

0.313

Std. error

VIF
Sig. (one-tailed)
F

.132

Adj-R2

.002

D-W

.338

4.1.4 The Use of Corporate Value Measures


Additionally, to further examine the lagged and future effect of brand value on corporate
value, a further test was conducted for the presence of establishing the causality in the
brand value, EVA and MVA relationship. Table 4.6 confirms Hypothesis 5 and 6 that BV is
positively related to EVA and MVA.

In the EVA model, each dollar increased in brand

value drove debt/equity ratio up by 9.27%. In the MVA model, each dollar increased in
brand drove stock prices up by 5.5%. However no effect on stock return was seen.

The results provided sufficient evidence that a positive relationship between brand equity
and the corporate economy and market value exist.

117

Table 4.6: Regression Results of EVA and MVA

Dependent variable: Brand Value


Independent variable:

EVA

MVA

Pearson correlation

.927***

.555***

t-test

21.272

.830

4.283

.949

91.103

.787

1.49

1.49

0.000

0.000

Std. error

VIF
Sig. (one-tailed)
F

352.725

Adj-R2

.857
1.013

D-W

4.1.5 Correlations between Brand Value Variables and EVA, MVA


After confirming the positive relationship between brand value and EVA/MVA, this study
further investigated the relevance between three brand value variables and EVA/MVA.
Table 4.7 shows a correlation coefficient between EVA and three brand value variables.
The results indicated, the coefficients 0.886 (coef

0.8) of dependent variable-prestige

driver is highly correlated to EVA. (R=0.78, F=138.959, D-W=1.907). This indicates that
the higher prestige driver, the higher EVA ( =719.013, t=20.223, P
coefficients 0.112 (0.1
EVA.

0.000).

The

coef 0.2) indicated that loyalty driver is positively related to

The coefficient of expansion driver and EVA is 0 (0.0-0.20) that represents the two

variables has negligible association.

118

Table 4.7: Pearson Correlations between EVA and BV Variables

Dependent variable: EVA


Independent variable:

PD

LD

ED

Pearson correlation

.886***

.112

.000

t-test

20.223

-.208

.520

Std. error

35.536

1.53E9

1.049E9

719.013

-3.176E8

5.455E8

VIF

1.024

1.025

1.010

Sig. (one-tailed)

0.000

0.114

0.365

138.959

Adj-R2

0.780

D-W

1.907

Table 4.8 shows a correlation coefficient between MVA and three brand value variables.
The results indicated, the coefficients 0.555 (coef

0.5) of dependent variable-prestige

driver is highly correlated to MVA. (R=0.297, F=17.471, D-W=1.6). This indicates the

higher prestige driver, the higher MVA ( =2.041, t=7.024, P 0.000). The coefficients
0.135 (0.1

coef 0.2) of Loyalty driver and 0.022 (0.0coef 0.0220.1) of expansion

driver are also positively related to MVA. The Adj-R2 for this regression model is 0.297,
which explained variances at 29.7% of this model.

119

Table 4.8: Pearson Correlations between MVA and BV Variables

Dependent variable: MVA


Independent variable:

LD

ED

.555***

.135

.022

7.024

.737

.669

.291

1252E7

8577835.352

2.041

9222938.997

5741174.820

VIF

1.024

1.025

1.010

Sig. (one-tailed)

0.000

0.072

0.405

Pearson correlation
t-test

Std. error

PD

17.471

Adj-R2

0.297

D-W

1.60

4.2 Quantitative Research Outcome and Summary

In chapter three, this study hypothesised three functions (PD, LD, ED) of brand value and
the relevance with corporate performance on the basis of substantive theory and the
Hirose Model.

This hypotheses recommended in the literature ( Aaker 1992, Keller 1993,

Kapferer 1992) that higher levels of brand equity such as perceived quality, brand
associations and brand loyalty have a positive influence on consumer choice, preferences
and intention to purchase and pay a premium price for the brand, and laid the conceptual
foundation for this empirical work. This section indicated the truth brand value- price
prestige driver and loyalty driver and the positive correlation with corporate EVA and MVA
support for the research hypotheses one, two, five and six. The empirical phase of this
study set out to understand a particular problem: that of understanding the nature of brand

120

value and the function to impact on corporate EVA and MVA after examining the value of
the statistical correlation obtained from the analysis of this empirical investigation. Figure
4.1 and 4.2 shows the regression outcome of this quantitative research.

PrPri

0.991**

Prestige Driver

Adj-R2

Store

0.002

Profitability

rejected
0.162

Loyalty Driver

Brand Value

0.927**

-0.057 (sig.0.27) (rejected)


Expansion

EVA
0.555**
MVA

Driver

Figure 4.1: Regression Results of Brand Value and Performance Variable

PrPri

Prestige Driver

0.886**
0.555**
0.112

EVA

Loyalty Driver

0.135

MVA
0.000 rejected

Expansion

0.022

Driver

Figure 4.2: Regression Results of BV Variables and EVA/MVA

121

4.3 Customer Survey and Analyses


4.3.1 The Characteristics of the Respondent Samples
The distribution of age and gender across all samples is reasonably representative of the
study population.

People across questionnaires have been distributed to 7% more males

than females. The characteristics of the respondent sample are exhibited in Table 4.9.

Table 4.9: The Characteristics of the Respondent Samples

Age

People

Ratio%

Cumulative %

15-24

69

13.8

13.8

25-34

241

48.2

62.0

35-44

156

31.2

93.2

34

6.8

100.0

Female

231

46.2

46.2

Male

269

53.8

100.0

95

8.0

8.0

Hypermarket

414

34.6

42.6

Supermarket

321

26.8

69.4

Convenience Store Chains

367

30.6

100.0

44-

Gender

Shopping Place Preference


Department Store

Basket /per purchasing(NT$)

122

55-99

237

47.4

47.4

100-199

151

30.2

77.6

200-299

51

10.2

87.8

300-

61

12.2

100.0

416

83.2

83.2

Family Mart

71

14.2

97.4

Hi-Life

13

2.6

100.0

Store Preference
7-Eleven

4.3.2 Data Reduction and Summarization


While the attributes were selected based on ACNielsen surveys in 2009, the items may not
perform as expected. To find items that form an internally consistent scale, it is important to
identify and remove non-performing items from the scale (Spector, 1992, p.29). The first
stage in the analysis of primary data for this research is the identification of the antecedent
factors for four constructs of retail brand equity. To accomplish this, the thirty-six attributes
developed from this qualitative survey were subjected to purification. The aim was to
reduce the number of original variables into principal constituents to simplify the
subsequent model testing for which the resultant validated scale is built.

Data reduction is the process of describing a data matrix by computing the small number of
measures that characterise the data set. For this purpose, principal component analysis
was utilized as a reduction technique to summarise the data into a smaller set of factors or
components. In addition, principal component analysis is a widely utilised factor analytic
technique within brand equity research ( Aaker and Keller, 1990, Keller, 1993). To achieve

123

these objectives we first undertake data reduction as a means of uncovering the underlying
dimensions of retail brand equity from the primary data collected for this investigation.

4.3.3 Attributes Identification Process


The application of factorial procedure was deemed appropriate as the first step in
uncovering the appropriate classificatory attributes based on the individual attributes
loading on specific factors. Individual attributes were examined at several stages through
factor analysis. Simple structures within the data set were identified. The key objectives of
this analysis were to parsimoniously retain the nature and character of the original
variables (Pedhazur and Schmelkin, 1991) upon which factor analysis has been applied,
and to assess the validity of treating a set of indicators as the reflectors of several
independent constructs of brand equity. To examine the appropriateness of factor analysis
technique at this stage is important for the data. Therefore, Bartlett's test of spherity and
the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy are employed (Coakes and
Steed, 1999). The guideline suggested by Kaiser and Rice (1974) is indicated in Table
4.10. This guideline was the one followed in this analysis.
Table 4.10: Kaiser-Rice's Criteria for Grouping Factor Attributes

Below 0.50

Unacceptable

0.50 - 0.60

Miserable

0.60 - 0.70

Mediocre

0.70 - 0.80

Middling

0.80 - 0.90

Meritorious

Greater than or equal

Marvellous

to 0.90
(Source: Kaiser Rice 1974)

124

These measures provided further diagnostic considerations in addition to the pre-data


collection consideration for the analysis technique. However, there is the need for further
considerations in determining the number of factors to extract from a particular data.
During this procedure, attributes that correlated negatively, and those that did not correlate
strongly with any other attributes, were deleted from the scale. An issue for further
consideration is the extent to which each individual attribute correlates in comparison to the
sum of the remaining attributes (item- total correlation). Individual attribute exhibiting
highest correlation to total coefficients were retained for further consideration in the scale.
Another desirable characteristic of a good instrument for measuring brand equity
constructs include the capability of a latent factor to explain a high variance (Loehlin, 1998).
High variance enables an attribute to discriminate among individual attributes with different
levels of the construct being measured. To estimate the score that would be obtained if it
were possible to identify the attributes that aptly capture all the dimensions of retail brand
equity is also important. A high correlation between scale attributes connotes that all the
attributes are homogenous to a domain, while a low correlation indicates otherwise. A low
correlation points to a possible source of measurement error and this may render the scale
unreliable (Black, 1999; Bryma and Cramer, 1990).

Interpretation is based on the levels of correlation that can be categorised as either high or
low. High levels of correlation allow one to conclude that the attributes are related and
justify their grouping with a factor (Loehlin, 1998, p.154). Examining the attribute to total
correlation and internal correlation purified the result of the questionnaires administered.
For the individual attributes representing a latent variable to be positively correlated as
internal consistency is crucial and is expected in attributes measuring the same underlying
factor (see for instance, Bollen, 1984). Attribute analysis represents a means of data
reduction by eliminating attributes that do not form an internally consistent relation with the

125

rest of the scale. High correlation between attributes is, therefore, a quality sought of a set
of attributes forming a scale (DeVellis, 1991).

4.3.4 Factor Identification and Labeling


The remaining data set within the principal component analysis was examined with the
oblique rotation method. The scale attributes were assessed for inclusion using several
criteria. First, variables with insignificant factor loading (<0.5) were considered for deletion.
Those that load onto more than one component were also deleted. Variables with
item-to-total scores equal or greater than .45 and inter-item correlation equal to or greater
than 0.30 were retained. Secondly, the communalities of the attributes representing the
amount of variance accounted for by the component solution of each variable were
assessed. Those with low communalities (<0.4) were considered for deletion. Thirdly, both
scree plot and attributes with Eigenvalues >1 were assessed for all the attributes retained.
In all, only those attributes that loaded to principal factors exhibiting simple and clear
structure were retained. These comprised attributes loading on to five components. The
five components explained 72% of the variance in the aggregate data for this study. A
further internal consistency check was assessed using coefficient alpha (Cronbach,1951,
1990) as a test of reliability. All three components were analysed as individual sub-scales
and their Cronbachs alpha values checked against the acceptable level. Those with alpha
values greater than .60 (Cronbach's >0.6), indicating that the homogeneity of the five
sub-scales could not be further improved upon through attribute elimination, were retained.
The pre-analysis scaling attribute for the development of retail brand equity is shown in
Table 4.11.

126

Table 4.11: Factor Analysis Results of Survey

Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy


Bartlett's test of spherity
Sig.

14775.359,

df

0.956
496

000

Components
1

Q31

0.845

0.158

0.216

0.118

0.159

Q36

0.837

0.165

0.200

0.176

0.174

Q26

0.725

0.302

0.277

0.104

0.201

Q29

0.658

0.142

0.328

0.219

0.225

0.628

0.426

0.288

0.059

0.081

Q27

0.607

0.306

0.233

0.269

0.310

Q32

0.605

0.327

0.116

0.296

0.359

Q29

0.601

0.426

0.290

0.058

0.073

Q33

0.594

0.258

0.232

0.328

0.338

Q13

*delete

Q24

*delete

0.481

0.262

0.289

0.250

0.272

Q22

*delete

0.476

0.247

0.221

0.214

0.292

Q15

*delete

0.473

0.357

0.198

0.196

0.418

Q9

0.207

0.737

0.080

0.208

0.272

Q7

0.225

0.708

0.265

0.177

0.206

Q10

0.299

0.694

0.218

0.145

0.236

Q11

0.244

0.680

0.252

0.226

0.123

Q8

0.171

0.662

0.179

0.228

0.207

Q14

*delete

0.473

0.357

0.198

0.196

0.418

Q23

*delete

0.758

0.037

0.056

-0.015

0.037

Q2

0.186

0.201

0.824

0.027

0.090

Q1

0.206

0.108

0.806

0.107

0.137

Q6

0.202

0.129

0.784

0.005

0.019

0.315

0.192

0.667

0.043

0.097

Q21

127

Q3

0.218

0.465

0.647

0.044

0.088

Q4

0.248

0.549

0.559

0.152

0.154

Q5

0.245

0.497

0.498

0.043

0.201

Q35

0.294

0.151

0.048

0.872

0.215

Q30

0.270

0.154

0.033

0.871

0.241

Q25

0.185

0.242

0.078

0.842

0.281

Q12

0.143

0.312

0.062

0.834

0.186

Q19

0.199

0.250

0.112

0.206

0.786

Q20

0.258

0.265

0.122

0.212

0.728

Q18

0.301

0.170

0.200

0.272

0.705

Q17

0.223

0.342

-0.058

0.291

0.701

Q16

0.400

0.107

0.240

0.206

0.557

4.3.5 Service Quality Attribute Analysis


The service quality measures scale initially contained 11 attributes based on Cronin and
Taylors (1992) proposition which include tangibles, empathy, responsiveness, reliability
and assurance for eliciting customer purchasing behavior in hypothesis seven. These
items were initially factor analysed as two independent scales using principal components
analysis with varimax rotation. The first independent scale included five attributes. The
second independent scale included seven attributes. The five items included in the first
scale of service quality are: (Q9) Customer complaints management, (Q7) Staff provides
professional and friendly service, (Q10) Ready to eat food and drink is of high quality, (Q11)
Efficient and trustworthy checkout counters, (Q8) Staff provides interesting promotions and
new products information. A pattern matrix for the service quality (group 1) construct with
the percentage of variance explained in the data and Cronbach's alpha for the scale are
shown in Table 4.12. The coefficient alpha for the scale is at 0.893. This indicates an
excellent level of reliability.

128

Table 4.12: Pattern Matrix for Service Quality (group 1)

Attributes

Factor

Variance

Coefficient

Loading

explained

Alpha

Q9

0.735

Q7

0.708

Q10

0.694

Q11

0.680

Q8

0.662

14.30%

0.893

The service quality (group 2) was composed of seven items: (Q2) Variety of convenient
service, (Q1) Clear sign board, (Q6) Long opening hours, (Q21) Convenient to get to, (Q3)
Clean and hygienic store, (Q4) Well presented display of products, (Q5) Wide selection of
high quality brands and products. The pattern matrix for the service quality (group 2)
construct with the percentage of variance explained in the data and Cronbach's alpha for
the scale are shown in Table 4.13. The coefficient alpha for the scale is at 0.904. This
indicates an excellent level of reliability. The initial 11 attributes of service quality were all
retained for further regression analysis.

Table 4.13: Pattern Matrix for Service Quality (Group 2)

Attributes

Factor

Variance

Coefficient

Loading

explained

Alpha

Q2

0.824

Q1

0.806

129

Q6

0.784

Q21

0.667

Q3

0.647

Q4

0.559

Q5

0.498

13.80%

0.904

4.3.6 Perceived Value Attribute Analysis


The perceived value measure scale initially contained 11 attributes based on Petricks
(2002) indications that include emotional response, monetary price, behavioural price and
reputation. Factory analyzed items with factor loading <0.5 were considered for deletion
while those with item-to-total scores equal or greater than 0.45 were retained. This analysis
resulted in five items (factor loading<0.5 ) were deleted from perceived value scale, they
are: (Q14) Pleasant store environment, (Q15) It made me feel delighted and happiness,
(Q22) Always has products want in stock, (Q23) Ready to eat food and drink is of high
quality, (Q24) Had a good and reliable stores reputation and image (CSR). Five out of 11
items for perceived value construct are (Q19) Has membership system offering great
rewards, (Q20) Provides store private brands, (Q18) Has membership system offers great
rewards, (Q17) Reasonably priced for service and products offered, (Q16) Appealing and
interesting promotions. The pattern matrix for the perceived value construct with the
percentage of variance explained in the data and Cronbach's alpha for the scale are shown
in Table 4.14. The coefficient alpha for the scale is at 0.892. This indicates an excellent
level of reliability. Five attributes of perceived value were retained for further regression
analysis.

130

Table 4.14: Pattern Matrix for Perceived Value

Attributes

Factor

Variance

Coefficient

Loading

explained

Alpha

Q19

0.786

Q20

0.728

Q18

0.705

Q17

0.701

Q16

0.557

12.42%

0.892

4.3.7 Customer Satisfaction /Customer Loyalty Attribute Analysis


Customer satisfaction refers to Czepiels (1974) and Cronin et als. (2000) integrated
satisfaction level including three items were combined into a brand loyalty scale in the
factor analysis results. This uncovered a factor solution with both customer satisfaction and
customer loyalty loading strongly into one factor. The attributes for customer loyalty
construct are: (Q31) I am willing to purchase new products and service from this store,
(Q36) I am willing to pay a little higher price to purchase products and services from this
store than its competitors, (Q26) Perceived value make you willing to repeat purchasing
this stores products and services, (Q34) When I want to go shopping in convenience store,
this store is my first choice, (Q28) The overall shopping experience was better than I
expected, (Q27) My choice to shop in this store is a wise choice, (Q32) I will recommend it
to someone who seeks my advice, (Q29) The service and products were exactly what I
needed , (Q33) I am willing to buy new products and services from this store.

The pattern matrix for the customer loyalty construct with the percentage of variance

131

explained in the data and Cronbach's alpha for the scale are shown in Table 4.15. The
coefficient alpha for the scale is at 0.950. This indicates an excellent level of reliability.
Nine attributes of brand loyalty were retained for further regression analysis.

Table 4.15: Pattern Matrix for Customer Loyalty

Attributes

Factor

Variance

Coefficient

Loading

explained

Alpha

Q31

0.845

Q36

0.837

Q26

0.725

Q34

0.658

Q28

0.613

Q27

0.607

Q32

0.605

Q29

0.601

Q33

0.594

19.05%

0.950

4.3.8 Brand Equity Attribute Analysis


This study designed two measure scales for brand equity which are price prestige driver
and loyalty driver.

They are: (Q35) I am willing to pay a little higher price to purchase

products and services from this store than its competitor, (Q30) Above customer
satisfaction make you willing to pay higher price to stores products and services, (Q25)
Above perceived value make you willing to pay a higher price to a stores products and
services, (Q12) Above service quality make you willing to pay a higher price to a stores
products and services.

The pattern matrix for the brand equity construct with the

132

percentage of variance explained in the data and Cronbach's alpha for the scale are shown
in Table 4.16. The coefficient alpha for the scale is at 0.957. This indicates an excellent
level of reliability. Four attributes of brand equity were retained for further regression
analysis.

Table 4.16: Pattern Matrix for Brand Equity

Attributes

Factor

Variance

Coefficient

Loading

explained

Alpha

Q35

0.872

Q30

0.871

Q25

0.842

Q12

0.834

12.74%

0.957

4.3.9 Principal Components Results for the Constructs of Brand Equity


The factorability of the correlation matrix is acceptable as indicated by a large and
significant

(Bartlett's

test

of

spherity=14775.359,

df.=496,

sig.=0.000)

with

Kaiser-Meyer-Olkin value of 0.956. The scale displayed an adequate inter-item correlation


and item- total correlation. In combination, they offered a cogent explanation that aided the
factor structure identification and better explained the variance in survey data as shown in
Table 4.17.

133

Table 4.17: Principal Components Results for


the Constructs of Brand Equity
Attribute

Factor

Eigen-

Variance

Cumulated

Item-total

loading

value

correlation

Q31

0.845

0.813

Q36

0.837

0.827

Q26

0.725

0.762

Customer

Q34

0.658

0.770

Loyalty

Q28

0.613

Q27

0.607

0.805

Q32

0.605

0.795

Q29

0.601

0.799

Q33

0.594

0.801

Q9

0.735

0.766

Q7

0.708

0.754

Service

Q10

0.694

Quality 1

Q11

0.680

0.718

Q8

0.662

0.693

Q2

0.824

0.767

Q1

0.806

0.719

Service

Q6

0.784

0.679

Quality 2

Q21

0.667

Q3

0.647

0.768

Q4

0.559

0.759

Q5

0.498

0.674

6.095

4.575

4.416

19.048

14.296

13.799

19.048

33.343

47.142

0.820

0.755

0.635

Cronbachs

0.950

0.893

0.904

134

Q19

0.786

0.786

Perceived

Q20

0.728

0.768

Value

Q18

0.705

Q17

0.701

0.737

Q16

0.557

0.618

Q35

0.872

0.907

Q30

0.871

Q25

0.842

0.902

Q12

0.834

0.862

Brand Equity

3.973

4.077

12.415

12.742

59.557

72.299

0.776

0.910

0.892

0.957

4.3.10 Scale Reliability/Validity Test


The Cronbachs Coefficient Alpha and Dimensionality of above survey results were tested
and shown satisfactory internal consistency reliability. Coefficient alpha value ranges from
0 to 1 and a value of 0.6 or less generally indicates unsatisfactory internal consistency
reliability, while a value of 1 may actually indicate that a single item is more appropriate for
measuring the construct. Nunnally (1967) suggested that for most research, a reliability
coefficient of 0.7 to 0.8 is sufficient. In marketing research, the commonly acceptable
reliability value is also 0.7 upwards (Bagozzi, 1982; Hair, et al, 1998; Walker, 1994) and a
threshold value of 0.6 may be acceptable if it is conceptually justifiable. Cronbach's
coefficient alpha () was calculated for the scale measuring each source and dimension of
brand equity. The reliability concern in this procedure is to ensure that the construct
indicators reach the threshold value for acceptable reliability. The Cronbachs alpha () test
for the survey results for each constructs of brand equity are from 0.897 to 0.957 that
represented satisfactory internal consistency reliability as shown in Table 4.17.

135

The content validity, construct validity and criterion-related validity were also tested and
met the criteria.

4.3.11 Correlation between Brand Equity and Four Constructs


The exploratory factor analysis above revealed that four brand equity constructs (service
quality (software), service quality (hardware), perceived value and customer loyalty are the
primary drivers of brand equity, which in turn affects customers intention to purchase from
convenience store chains. Table 4.18 is the descriptive statistics for the brand equity and
four constructs.

The primary tests of the hypotheses employed (linear) single and

multiple regression analysis.

The analysis results in Table 4.19 show a correlation

coefficient between brand equity and four constructs support Hypotheses seven to ten.

The results indicated, four independent variables - service quality (0.5 coef 0.642 0.7),

customer loyalty (0.5coef 0.7470.8) is highly correlated to brand equity (Adj-R = 0.672,
F=256.379, p.000). This confirms Hypotheses seven through ten that service quality,
perceived value (0.5 coef 0.784 0.8), customer satisfaction (0.5 coef 0.747 0.8) and
2

perceived value, customer satisfaction and customer loyalty are positively related to brand
equity.
Table 4.18: Descriptive Statistics for Brand Equity and Four Constructs
N
Brand
Equity
Service
Quality
Perceived

Mean
500

3.6513

.72583

500

4.0647

.55620

500

3.8324

.61770

500

3.8980

.66301

500

3.9173

.68075

Value
Customer
Satisfaction
Customer
Loyalty

Std. deviation

136

Table 4.19: Regression Results of Brand Equity and Four Constructs


Brand

Service

Perceived

Customer

Customer

Equity

Quality

Value

Satisfaction

Loyalty

Brand

1.000

.642***

.784***

.747***

.747***

.642***

1.000

.771***

.693***

.674***

.784***

.771***

1.000

.793***

.774***

.747***

.693***

.793***

1.000

.819***

.747***

.674***

.774***

.819***

1.000

t-test

-1.424

.118

8.533

3.979

5.122

Std. error

-.139

.054

.059

.055

.051

-.198

.006

.507

.219

.263

2.604

3.887

3.828

3.516

.000

.000

.000

.000

Equity
Service
Quality
Perceived
Value
Customer
Satisfaction
Customer
Loyalty

VIF
Sig.

.000

256.379
.672
Figure 4.3 demonstrates the association of the retail brand equity and four constructs.
Service quality

0.642***

0.784***
Perceived Value

0.747***

PrPri

Bran Equity

Customer
Satisfaction

0.747***
Customer Loyalty

Figure 4.3: The association of the retail brand equity and four constructs.

137

4.4 Path Analysis of the Causal Model for Retail Brand Equity
This study extends multiple regression analysis to estimate the strength of effects
(cause-effect relationship) within a hypothesized causal system. In Cronin Jr. et al.s
(2000), Petricks (2002) and Sullivans (1993) measure models, service quality and
perceived value are the two antecedents of customer satisfaction. In addition, Bitner (1990)
proposed that customer satisfaction is the antecedent of customer loyalty.

Based on

above literature and theories, the structural pathways of the model developed two types of
variables i.e. exogenous variables (independent variables) and endogenous variables
(dependent variable). Three types of relations exist between observed variables (Hoyle,
1993) are: association, direct effect and indirect effect.

Figure 4.4 highlights the theory

structure of relationship between brand equity constructs.

Service quality

Customer loyalty
Perceived Value

PrPri

Bran Equity

Customer
Satisfaction

Figure 4.4: Relationship Structure between Retail Brand Equity Constructs

The first multiple regression models utilized customer satisfaction as dependent variable,
service quality and perceived value as independent variables. The regression result is
shown in Table 4.20.

138

Table 4.20: Regression Result of Customer Satisfaction and Two Constructs


Customer
Satisfaction
Customer Satisfaction

Perceived

Service

Value

Quality

1.000

.793***

.693***

Service Quality

.693***

.771***

1.000

Perceived Value

.793***

1.000

.771***

2.561

4.84

15.16

Std.

.636

.203

VIF

2.463

2.463

.000

.000

t-test

Sig. (one-tailed)

.000

451.227

Adj-R2

.643

Table 4.20 shows the correlation coefficient between customer satisfaction and service

quality and perceived value is 0.693 (0.6 coef 0.693 0.7, p=.000) and 0.793 (0.7 coef

0.793 0.8, p=.000) revealed a highly positive correlation between these three variables.
The standardized coefficients Beta of perceived value 0.636 is higher than service quality
0.203 which indicated that perceived value has higher positive correlation with customer
satisfaction than service quality. Adj-R2 (0.643) explained variances at 64.3%.

Service quality

0.693***
Customer

0.793***

Satisfaction

Perceived Value

Figure 4.5: The Correlation between Customer Satisfaction, Service Quality and
Perceived Value

139

The second multiple regression models utilized customer loyalty as a dependent variable,
service quality and perceived value as independent variables. The regression result is
shown in Table 4.21.

Table 4.21: Regression Result of Customer Loyalty and Two Constructs

Customer Loyalty

Brand

Perceived

Service

Loyalty

Value

Quality

1.000

.674***

.774***

Service Quality

.774***

.771***

1.000

Perceived Value

.674***

1.000

.771***

2.273

14.295

4.376

Std.

.626

.192

VIF

2.463

2.463

.000

.000

t-test

Sig. (one-tailed)

.000

394.074

Adj-R2

.612

Table 4.21 shows the correlation coefficient between brand loyalty and service quality and

perceived value of 0.774 (0.7 coef 0.774 0.8, p=.000) and 0.674 (0.6 coef 0.647 0.7,
p=.000) revealed a highly positive correlation between these three variables. The
standardized coefficients Beta of perceived value 0.626 is higher than service quality 0.192
which indicated that perceived value has higher positive correlation with brand loyalty than
service quality. Adj-R2 (0.612) explained variances at 61.2%.

140

Service quality

0.774***
Customer
Loyalty

0.674***
Perceived Value

Figure 4.6: The Correlation between Brand Loyalty, Service Quality and Perceived
Value

The third multiple regression models utilized customer loyalty as dependent variable,
service quality, perceived value and customer satisfaction as independent variables. The
regression result is shown in Table 4.22.

Table 4.22: Regression Result of Brand Loyalty and Three Constructs

Customer Loyalty

Customer

Service

Perceived

Customer

Loyalty

Quality

Value

Satisfaction

1.000

.674***

.774***

.819***

Service Quality

.674***

1.000

.771***

.693***

Perceived Value

.774***

.771***

1.000

.793***

Customer

.819***

.693***

.793***

1.000

1.286

2.148

6.260

13.356

Std.

.083

.285

.537

VIF

2.58

3.603

2.816

.000

.000

.000

Satisfaction
t-test

Sig. (one-tailed)

.000

141

415.944

Adj-R2

.714

Table 4.22 shows the correlation coefficient between brand loyalty and service quality,

coef 0.674 0.7, p=.000),


0.774 (0.7coef 0.7740.8, p=.000) and 0.819 (0.8coef 0.8190.9, p=.000) revealed

perceived value and customer satisfaction is 0.674 (0.6

a highly positive correlation between these four variables. The standardized coefficients
Beta of customer satisfaction 0.537 is higher than service quality 0.083 and perceived
value 0.285 which indicated that customer satisfaction has higher positive correlation with
brand loyalty than service quality and perceived value. Adj-R2 (0.714) explained variances
at 71.4%.

Service quality

0.674***

0.774***
Customer

Perceived Value

Loyalty

0.819***
Customer
Satisfaction

Figure 4.7: The Correlation between Brand Loyalty, Service Quality, Perceived Value
and customer satisfaction.

The fourth multiple regression models utilized brand equity as dependent variable, service
quality, perceived value, customer satisfaction and brand loyalty as independent variables.
The regression result is shown in Table 4.23.

142

Table 4.23: Regression Result of Brand Equity and Four Constructs

Brand

Brand

Service

Perceived

Customer

Customer

Equity

Quality

Value

Satisfaction

Loyalty

1.000

.642***

.784***

.747***

.747***

.642***

1.000

.771***

.693***

.674***

.784***

.771***

1.000

.793***

.774***

.747***

.693***

.793***

1.000

.819***

.747***

.674***

.774***

.819***

1.000

-1.424

.118

8.533

3.979

5.122

Std.

.005

.431

.200

.246

VIF

2.604

3.887

3.828

3.516

Sig.

.000

.000

.000

.000

Equity
Service
Quality
Perceived
Value
Customer
Satisfaction
Brand
Loyalty
t-test

256.379

Adj-R2

.672

Table 4.23 shows the correlation coefficient between brand equity and service quality,

perceived value, customer satisfaction and brand loyalty are 0.642 (0.6 coef 0.642 0.7,
p=.000),

0.784 (0.7 coef 0.784 0.8, p=.000), 0.747 (0.7 coef 0.747 0.8, p=.000)

and 0.747 (0.7 coef 0.747 0.8, p=.000) revealed a highly positive correlation between
these five variables. The standardized coefficients Beta of perceived value 0.413 is higher
than service quality 0.005, customer satisfaction 0.200 and brand loyalty 0.246 which
indicated that perceived value has higher positive correlation with brand equity than other
three constructs. Adj-R2 (0.672) explained variances at 67.2%. Figure 4.8 shows the path
analysis results.

143

Service quality

= 0.203

=0.005
=0.192
Perceived Value

=0.626

Customer loyalty

=0.636

=
0.246
PrPri

Bran Equity

=0.431
=0.537

=0.200

Customer
Satisfaction

Figure 4.8: The Path Analysis Results of Retail Brand Equity Constructs

Table 4.24: The Effects of Brand Equity Constructs

Constructs

Indirect Effect

Direct Effect

Total Effect

Service Quality

0.087

0.005

0.092

Perceived Value

0.281

0.431

0.712

Customer Satisfaction

0.132

0.200

0.332

0.246

0.246

Customer Loyalty

Based on the significant 'causal' relationship identified as in Figure 4.8, Table 4.24
exhibited the findings of direct, indirect and combined effects of the four factors which
achieved a R2 value of 67.2% of the variance in retail brand equity. The indirect path of
brand equity included service quality 0.047, perceived value 0.154 and customer
satisfaction 0.132. The total indirect effect is 0.5.

Service quality has a very low direct

effect 0.005 on brand equity, but has two indirect paths which are customer satisfaction
0.203 and brand loyalty 0.192, drive the indirect effects on brand equity are 0.04 and 0.047.

144

The combined effect of service equity on brand equity is 0.092. Perceive value has a direct
effect 0.431 on brand equity, and has two indirect paths which are customer satisfaction
0.127 and brand loyalty 0.154. The total effect of perceived value on brand equity is
0.712.

Customer satisfaction has a direct effect 0.2 and an indirect effect 0.132 on brand

equity. The total effect of customer satisfaction is 0.332. The most significant combined
effect on brand equity is perceived value 0.712.

In conclusion, traditional reliance on utilitarian and functional aspects of a brand as the


basis for brand equity evaluation has been shown to be less effective as representation of
what customers actual consider in a brand evaluation. Various conceptual works offer
compelling explanation to buttress this empirical reality that product and brand utility are
less important determinants of customer evaluation of a brand (See for instance Boisot,
2001; Glazer, 2001; Kapferer, 2001; Lindstrom, 2002). From the above one can conclude
that no one scale has been universally accepted or validly tested to measure a brand
equity, particularly in market reality in which non-functional, rather than functional aspects
of the brand determine its success in the market place. However, this research created a
scale with four constructs (service quality, perceived value, customer satisfaction and
brand loyalty) to capture the retail brand equity, validly and reliably, in market reality.
Figure 4.9 shows the complete measurement and structural model.

145

Q7
Q8

0.708

Q26

0.725

0.662

Q27

0.735

0.607

0.694

0.613

Q9

Q28

Q10

Service

0.680

Q29

0.601

Quality 1

Q11

Q31

0.083

0.845
Q32

Q1

0.806

0.605
Q33

Q2
Brand Loyalty

0.824
Q3

0.647
Q4
Q5

0.559

Service

Q34

Customer Satisfaction

0.658

Quality 2

0.578

0.092

0.667

0.626

EVA
0.886

Q21

0.712
Q16
Q17
Q18
Q19

Q36

0.837

0.498
0.784

Q6

0.594

0.557
Perceived

0.701

Value

0.555

0.991

PD

Brand
Equity

0,162

0.705
0.786

MVA

LD
0.112

0.135

0.728
EVA

MVA

Q20

Figure 4.9: Complete Measurement and Structural Model

146

4.5 Customer Survey Outcome and Summary


This chapter investigated brand equity by both financial and customer-based approaches.
The outcome of financial measurement and the relationship between brand value and
corporate performances was indicated in Section 4.2. In addition, we hypothesised that
higher levels of brand equity such as service quality, perceived value, customer satisfaction
and customer loyalty have a positive influence on consumer choice, preferences and
intention to purchase and pay a premium price and loyalty for the brand. 36 measure scales
were designed based on the literature of Cronin Jr. and Taylor (1992), Petricks (2002),
Czepiel et al. (1974), Cronin et al. (2000) and Gronholdt et a. (2000). The survey results
indicated that all four constructs are highly correlated to brand equity and supported the
hypotheses seven to ten while the factor analysis, principal components analysis and
multiple regression analysis conducted.

All statistic results fit the model reliability and

validity tests.

In addition, the structural relationships among various constructs were assessed to test the
direct and indirect effects on brand equity. The results showed that perceive value is the
highest correlation with brand equity, second is customer satisfaction, and the third is
brand loyalty.

147

Chapter Five Conclusion and Implication


5.0 Introduction
This concluding chapter discusses the implications and managerial applications of this
research, and the contribution to the body of knowledge on brand value, retail brand equity
and branding strategy for convenience store chains in Taiwan. Section 5.1 will highlight the
impact of the statistical analysis on the brand value and corporate performance. The
application of Hirose brand valuation model for chain and the franchise sector will also be
discussed.

Section 5.2 discusses the implication of the constructs and attributes of retail

brand equity. Section 5.3 discusses the implications of methodological, theoretical,


marketing and managerial strategy. Section 5.4 highlights the research limitation and
extension.

5.1. Financial Approach of Brand Equity


This study successfully demonstrated Simon, Sullivan and Kapferers definition of brand
equity that brand has financial value or economic value.

In financial approach, the results

showed that brand has effect of price prestige driver and loyalty driver and a positive link to
corporate EVA and MVA. This confirmed Kapferers (1992) address that brand generate
three generations of profit: the price premium, more attraction and loyalty and higher
margin. These effects also work on the convenience store chains and demonstrated the
increasing intangible assets within a companys financial structure. These increasingly
intangible assets that do not appear on the balance sheet are patents, distribution rights
and brands. According to a study by Brand Finance, intangible assets represent between
60% and 75% of capitalization value in the major stock indices. This study showed a
substantial transfer of brand value that each dollar increased in brand value drove
debt/equity ratio up by 9.27% and stock prices up by 5.5% (see section 5.1.1 EVA Model
and MVA Model).

148

The findings also provide evidence to suggest that there is a positive relationship between
brand equity and the corporate profitability.

However, the impact is not significant. A

possible explanation for this result is that the profitability ratio is a more complex measure
with lagged factors being more relevant. The current findings from the profitability ratio
would suggest that brand value may be of little value in predicting this particular dimension
of profitability performance.

Based on extant literature, a belief that greater brand value means greater profitability
lacks evidence.

Marketers and academics are challenged to link brand to profitability and

the bottom line. This study highlighted this critical notion but provided more rigorous
impact of brand value on corporate financial performance.

In addition, this study also tested the Hirose brand valuation model to investigate the
functions of brand value in chain stores.

In Salinas and Tims (2009) journal of A

taxonomy of brand valuation practice: methodologies and purposes addressed that the
Hirose model is purely academic and has no commercial usage based on market tests of
the models methods. Many theoretical methods do not appear to be employed for
corporate marketing strategies and brand management purposes. Therefore, the
calculation testing process showed the following findings and problems:

1. Problems with Prestige Driver: In calculating the brand prestige driver, the brand
attribution rate is estimated first. The Hirose committee assumed the advertising
expense ratio as an indication that the more advertising and promotion cost spent, the
higher the brand attribution rate becomes. However, many companies that do not
show advertising and promotion cost as an independent item exist (such as Mercuries),
thus, the Hirose committee suggested using the industry average for such companies

149

as a solution. This studys evidence reveals a problem: i.e. the five- year average of
advertising and promotion cost in chain store is US$75 million which is almost 29 times
that of Shin Shins total operating expense of NT$3 million. Therefore, the problems of
applying average industrial figures may not be appropriate and having no statistics or
consistent data available regarding advertising and promotion cost in the publicly
reported financial statement.

2. Problem with Loyalty Driver: The measurement of loyalty via stability of cost of sales is
unfounded.

3. Problems with Expansion Driver: the regressions result showed no association with
brand value exists. A possible explanation for this rejection could be that most chain
stores in Taiwan have mainly focused on domestic market growth and expansion until
the late 1990s, chain stores became interesting in expecting the service and geographic
scope. China had cheap labor and abundant land, and an enormous consumer market
that drew Taiwan chain stores to continue to broaden their retail operation. Table 6.1
illustrates the management of the top ten chain stores investment status. However,
chain stores faced challenges expanding in China such as the political relationship,
local policies and regulations affecting the retail performance and strategies. Currently,
only nine out of twenty chain stores earned profits from overseas markets. Therefore,
the assumption of the model that a strong brand is able to expand into similar or different
industries, markets and geographic regions is not confirmed. Currently, the expansion
driver is not contributing to the brand value in most of chain stores in Taiwan.

150

Table 5.1: Overseas Investment Status of


Taiwans Top 20 Chain Stores
Company

Start

Country

Income/Loss

Year
7-Eleven (2912)

2000

Philippines, Malaysia, China

Income

Shin Shin (2901)

Far Eastern

Collins

Tonlin

Ruentex

1999

China

Income

Family Mart (5903)

2004

China

Loss

Mercuries (2905)

1999

China

Loss

Test Rite

2001

China, Vienna

Loss

Les Enphants (2911)

1999

China

Income

Poya (5904)

Ten Ren Tea (1233)

Income

Great Wall

Nan Chow

2000

China

Income

Nan Ren Lake

2007

China

Income

Tsann Kuen (2430)

1999

Hong Kong, China, USA,

Income

Japan
Synnex (2347)

1996

China, USA, Australia, HK

Income

E-Life Mall (6281)

Sunfar (6154)

1999

China

Income

Sampo

151

4. General problem: The model adopts an income approach that views the effect of a
brand being expressed as a prestige driver and loyalty driver, both of which reflect a
price and quantity effect of the cash flows generated by the brand. The evidence has
confirmed that PD and LD are positively influenced on brand value. Therefore, by
multiplying loyalty driver with prestige driver can calculate the most stable and certain
portion of the present and future cash flows attributed to the brand and then discounting
to the present value. The utilized discount rate now becomes an issue. The discount
rate is for valuing the companys ability to generate future free cash flows, ignoring cash
that the company has already generated, and then add the cash to get the value of the
firm. The question is: How volatile are the future profits generated by the brand likely to
be? What is the appropriate and convincible discounted rate? The model applying
risk-free rate in the calculation employed in discounted cash flow is critical and does not
equal with reality. This research selected Family Mart (five-year average sale growth
rate 8%) and Poya (five-year average sale growth rate 15%) as a benchmarking brand
and then adjusted relative risk 1.5 % to calculate the projected discount rate 10% for the
industry. The impact of brand was assumed sustained over time.

5. In addition to quantitative financial data, qualitative information on true marketing


insights such as the impact that brand perceptions have on customers brand
preference, looking both at volume and price impact is also an important index of brand
equity and value creation. One of the critics of the Hirose valuation model is that the
model puts an emphasis on brand contribution to corporate financial performance
without considering customer perception of brand strength and brand role. Therefore,
the value figures may only reveal the lagged index of brand, and fails to examine brand
potential value and corporate sustainable competitive advantages. Without proper
understanding the relationship between customer perceptions and brand financial

152

performance, a manager cannot make marketing decisions that have the largest impact
on store operation.

In conclusion, measuring brand value and equity is a challenge, which requires reliable and
valid methods and criteria to evaluate firm level performance. This study illustrated that the
Hirose model has inconsistencies in data resource and invalidated correlations between the
factors. Therefore, this models testing confirms that the model does not appear to be
applied in practice for brand valuation and corporate brand management purposes.

5.2 Customer-Based Approach of Brand Equity


In published brand literature, functional or utility attributes are considered as primary
elements determining consumer preferences and, invariably, the success of the brands.
This study examined the effect of intangible attributes (e.g. service quality, perceived value,
customer satisfaction and brand loyalty) on brand equity as well as its relationship to
consumer preferences. The basic assumption of this approach is that brand loyalty may
emerge because the consumer prefers a brand that simply outperforms all competitors in a
product category. Thus, the prevalence of factors such as perceived quality (Aaker, 1991),
brand added value (Riezebos, 1994) based on functional improvement, and utility based
attributes (Park and Srinivasan, 1994) in brand equity research were proposed. While
these works did not completely rely on functional attributes, they underlie a substantial part
consistent with the nature of consumer behaviour and preference formation in the 1970's
and 1980's.

The initial exposition on the nature of brand is based upon de Chermatony and Farguhar s
(1989) proposition (see section 2.2). Their work clearly influenced the specific definition of
brand offered in this study. The current study also shares several ideas with Kapferer's

153

(1992) by explaining that consumer brand evaluation depends on how consumers see
themselves in relation to the value propositions that a brand is offering them. Other
models such as Aaker (1991, 1996), Keller (1993), Roberts and Lilien (1993) also
influenced our perspectives on the changing nature of factors that underlie retail brand
equity (see section 2.4). ACNielsen (2001) defined store brand equity in terms of the
awareness, consideration and association constructs. However, the customer-oriented
driving force has increased focus on long-term customer value metric, such as customer
relationships, customer satisfaction (Oliver, 1980), market orientation (Narver and Slater ,
1990) and customer value (Bolton and Drew, 1991).

This study incorporated the above trend to reconstruct service quality, perceived value,
customer satisfaction and brand loyalty are key influences on retail brand equity based on
Yoo et al.,( 2000), Yoo and Donthu (2001),

and Kim et al.s( 2003) literature.

The

consumers perception of value cannot be neatly divided into components of different


brands.

Generally, consumers attitudes towards a brand represent indivisible

combination of various subjective connotations surrounding that brand. These subjective


connotations may be triggered by specific consumer wants and needs. Therefore, brand
equity is not just one basic type of value. Rather, it is a conglomeration of those core
values that reflect, affect and guide the overall evaluation of a brand.

Retail brand equity was therefore operationalised as the preference and attitudinal
evaluation of the brands economic worth. This evaluation is based on the appropriateness
of a brand to individual wants, needs and emotions (service quality and perceived value);
previous pleasant experience (customer satisfaction); and those factors that reinforce
customers comment to re-buy or re-patronize a preference product or service consistently
(brand loyalty). These elements of retail brand equity also affect the behavioural patterns of

154

consumers in their propensity to purchase.

5.2.1 Factor 1- Service Quality


Service quality is of great importance for any company regardless of the sectors. 11
measure scales were designed to obtain customer perspectives of a stores service quality.
The result showed that service quality has a low direct effect (beta= 0.005, p=.000) on
brand equity, but has two indirect paths which are customer satisfaction 0.203 and brand
loyalty 0.192, drive the indirect effects on brand equity are 0.04 and 0.047. The combined
effect of service equity on brand equity is 0.092 supported hypothesis seven that service
quality is positive related to brand equity. The relationship indicates that an improvement
in service quality leads to an increase in retail brand equity. These findings are in line with
other studies like that from Duncan and Elliott (2004) who found that there is a positive
correlation exists between service quality and corporate financial performance.

Kagara

(2010) also found that service quality is the key element of customer satisfaction at Attica
Bank.

For convenience stores, service quality will also evoke feelings of closeness, affection and
trust in the consumer. This means convenience stores must deliver higher quality than
the competitors to attract customers and generate customers satisfaction and loyalty.

To

achieve a high level of service quality, stores must improve either equipment themselves
with things such as technology and services cape or personnel. Thus, this study revealed
that a stores aim is to improve tangible service qualities such as:
1. Variety of convenient service (ATM, copy machine and i-bon)
2. Clear sign boards.
3. Clean and hygienic environment.
4. Well presented display and products.

155

5. Wide selection of high quality brands and products.


6. Long opening hours.
7. Convenient to get to.

Intangible service quality such as:


1. Customer compliant management.
2. Staff provides professional and friendly service.
3. Ready to eat food and drink is of high quality.
4. Efficient and trustworthy checkout counters.
5. Staff provides interesting promotions and new product information.

This study concluded that the degree to which service quality management enhances
customer satisfaction and loyalty and has a significant impact on retail brand equity.

5.2.2 Factory 2- Perceived Value


In path analysis, perceived value has highest positive direct effect = 0.431 on brand
equity and has two indirect paths which are customer satisfaction = 0.636 and brand
loyalty =0.626, drive the indirect effects on brand equity are 0.127 and 0.154. The
combined effect of service equity on brand equity is 0.712 supported hypothesis eight that
perceived value is positive related to brand equity. This result reveals that stores with
higher customer perceived value indicate a good relationship of trust and creditability with
the customers. Thus, customers are willing to repurchase from this store and recommend
to their friends or families. Customers believe that they have come to the right place, the
favorite place and received or purchased something unique and special. Consequently,
store not only instilled part of branding into the customers perception, but have added
perceived value to the shopping experience of customer, leads higher brand equity. This

156

study proved five attributes positively related to customer perceived value as followings:
1. Have programs that reward regular purchase.
2. Provide stores private brands.
3. Has a membership system that offers great rewards.
4. Reasonably priced services and products offered.
5. Appealing and interesting promotions.

Retail success is totally dependent upon the customers' perception of store and products.
This study concluded that customer perceived value is long lasting, memorable and
unbreakable which affect customer satisfaction and loyalty and has a significant impact on
retail brand equity.

5.2.3 Factory 3- Customer Satisfaction


This study found that customer satisfaction has a direct effect = 0.537 on brand loyalty
and = 0.2 on brand equity confirmed the hypothesis eight that customer satisfaction is
positively related to brand equity. This evidence confirms Jones and Sasser (1995),
Anderson & Sullivan (1993), Biong (1993), Bloemer & Kasper (1994), Sderlund (1998),
Taylor & Bakers ( 1994) studies that a positive association between customer satisfaction
and intentions to purchase again from the supplier who was responsible for the initial level
of satisfaction. In factor analysis, customer satisfaction and brand loyalty are grouped in
the same cluster.

The main rationale behind this link may be stated as follows: a

behavioral intention is a function of a) the customers expectation that the performance of a


specific behavior will lead to a certain outcome and b) the positive or negative evaluation of
this outcome (Ryan 1982). With this view, two methods exist in which satisfaction may
affect repurchase intentions. First, given that the customer is satisfied. Satisfaction serves

157

to narrow the variance in expectations (Anderson & Sullivan 1993). This is likely to reduce
uncertainty and provide cognitive economy in future choices. Secondly, given again that
the customer is satisfied, the result is positive evaluations. Thus, a positive association
between customer satisfaction and repurchase intentions is assumed. These include
loyalty, word-of-mouth, price sensitivity, feedback to the supplier, and job satisfaction
among the suppliers personnel (Anderson et al 1994, Peppers and Rogers 1997,
Reichheld, 1996).

5.2.4 Factor 4- Brand Loyalty


Brands value to a firm is largely created by the customer loyalty (Aaker 1996). This is the
heart of brand equity. Loyal customers are less likely to switch to a competitor solely
because of price; they make more frequent purchases than comparable non-loyal
customers (Bowen and Shoemaker, 1998).

For retailers today, nothing is more important

than retaining customers and encouraging them to spend a higher proportion of shopping
budget at stores (Nielsen 2008).
Gronholdt

et

al.s.(2000)

Three measure scales were designed based on

suggestions

that

included

willing

of

repurchasing,

recommendation to others and cross purchasing. The survey result showed that brand
loyalty has direct effect =0.246 on brand equity. In addition, a significant moderating
variable between service quality, perceived value, customer satisfaction and brand equity
that leads a direct effect of 0.5 on brand equity exists. The result supported hypothesis
ten that brand loyalty is positive related to brand equity.

Howard and Seth commented that greater brand loyalty among consumers leads to
greater sales of the brand. The loyal buyer behavior link has an important impact on
financial performance because repeat customers are generally cheaper to service than
new customers. Therefore, loyal customers are more profitable as they are the main

158

source of repeat purchase and positive word of mouth.

This study provided nine

attributes lead to brand loyalty construct:


1. Customers perceived value.
2. My choice to shopping in this store is a wise choice.
3. The overall shopping experience was better than I expected.
4. The service and products was exactly what I needed.
5. Customers satisfaction.
6. I will recommend it to someone who seeks my advice.
7. I am willing to buy new products and services from this store.
8. When I want to go shopping in convenience, this store is my first choice.
9. I am willing to repurchasing from this store.

5.3 Implications of Research


The retail trade will change dramatically in the next few decades, only those retail
companies with strong and unique brand associations will survive (Floor, 2006). This
study makes a contribution to provide an integrated conceptual model of brand equity
measurement that illustrates the structural link between consumer-based brand equity and
financialbased market performance.

The results supported a strong structural link

between consumer-based brand equity (four main constructs: service quality, perceived
value, customer satisfaction and brand loyalty) and store market performance (in the form
of the price prestige driver, loyalty driver, corporate profitability, EVA and MVA), and
suggested that any changes in these consumer-based brand equity measures may
significantly affect the brands resulting market performance.

Managers should keep

track of changes in consumer-based brand equity to predict brands market performance.

Another contribution is to show a cause - effect relationship between retail brand equity
constructs that given additional insights for marketers to measure a brands market

159

performance based on customers perspectives.

An interesting finding revealed that

perceived value is the key driver of brand equity among convenience store chains. This
finding highlights the need to gain an understanding of the separate impact of both
intangible and tangle attributes and their contribution to brand equity and customers
preference.

In addition, this study also contributes the following important implications.

5.3.1 Methodological, Statistical and Theoretical Implications


Philosophers of science such as KuIm (1970) assert that scientific objectivity is seldom
espoused in isolation to human subjectivity. Such subjectivity may be based on intuition,
imagination, hunches, and 'luck' (Barney, 1986; Slater, 1980)all of which play important
roles in the propounding of an idea. The point on subjectivity about which these
philosophers have theorised is in fact implicit in SEM ( Tbimbola, 2003). The understanding
of retail brand equity was, therefore, enhanced with the application of SEM in this study.
With SEM (cause-effect path analysis), this study was able to link empirically derived
statistical inferences with theoretically espoused positions. Given the fact that empirically
derived statistics are inherently imprecise (this is particularly so in the social sciences), a
field is better served if one is able to let substantive theory provide a strong guide in both
model building and analysis. Objectivity that solely relies on statistical inference can
neither adequately validate, nor provide sufficient foundation for understanding. Hence, for
empirically derived objectivity to be meaningful, it is important to adopt a coherent body of
explanation as an aid to understanding. In the long run, such a body of explanation will
improve research methods, predictive ability and the practical application of findings.

160

5.3.2 Implications of Brand Equity for Shareholder Value


Yovovich's (1988) proposed that "strong brand names create stronger cash flows and
stronger earnings, which then creates stronger values for shareholders" epitomizes that
brand has manifest impact on corporate financial market value.

This study provided

evidence that brand value positively impacts corporate EVA and MVA.

Therefore, an

inference that can be drawn from this finding is an actual creation of brand equity that
influences the stock market increase and shareholder value. If shareholders perceive the
value of a brand to be less than market competitors, they may be less disposed towards
buying such a brand.

5.3.3 Marketing Implications of Retail Brand Equity


This study links several important marketing concepts, and demonstrates the influence of
brand value on corporate EVA, MVA and profitability.

In addition, the survey results

demonstrated that service quality and perceived value increased customer satisfaction and
loyalty.

If the customer is very satisfied and willing to repeat the purchase, the customer

is willing to pay a higher price, as they are not easy to compare the performance of
services or product in the sector.

Consequently, stores are able to charge higher prices

because these customers attach value to maintaining the relationship with preference store
(Huber et al., 2001).

This means that stores should focus more on delivering customer

perceived value with strong emotional appeal. Convenience store chains will therefore
pay attention to maintain their customer base, implement new technologies to create a
present and emotional shopping environment, offering value-added loyalty/store cards and
promotion.

Understanding and measuring retail brand equity (and factors that enhance the magnitude
of brand equity) are of significant importance to retail businesses. Measuring these factors
help stores to understand why some apparently 'big-brands' lose their loyal customers and

161

help explain why some brands with no strong names behind them are able to make a rapid
in-road into their product and service category. With this in mind, discussion on the
application of the retail brand equity model reflected upon a usage metric for measuring
consumer value. The application of the retail brand equity model is also discussed for
measuring the impact of branding policy on creating shareholder value, and assessment of
marketing practices' contribution to competitive strategy.

5.3.4 Managerial Strategy Implication of Retail Brand Equity


The strategic competitive role of brand equity is to create a barrier which forces new
entrants to incur the huge investment to endow a brand with the unique associations,
meanings and personality that differentiate from competitors. The cost of overcoming
customer loyalty is also an added barrier that competitors have to contend with.

Stores

must implement a specific segment by adopting a new paradigm of brand management


with customer-centered approaches in a competitive marketplace. The inability of
competitors to duplicate the overall impression and reputation (e.g. Grant, 1991) that a
brand connotes in customers' minds is a powerful means of securing competitive
advantage.

Existing customer value could provide predictability that reduces and

stabilises the elasticity of demand.

5.4 Limitations and Extensions


As with all research, limitations of this research exist. First, the research adopted the
Hirose valuation model to quantify stores chains brand value and to understand how brand
value impacts corporate profitability and value performance. However, the brand value
figures may be challenged since the model has several critical problems as mentioned
previously. Therefore, an appropriate valuation model for academic and practitioner usage
is needed for further brand value research.

Secondly, the suitability of panel data

162

(Taiwans top 20 listed chain stores) for brand value calculation and research question
analyses is possible a limitation.

The participating companies are listed and large

Taiwanese companies. Therefore, this studys findings may not be useful for smaller
companies and the relevance of the findings in other industries have to be confirmed by
further research. Thirdly, the attempt of estimating the dynamics of the brand value and
profitability relationship was inconclusive.

This study was not able to provide a significant

direct impact or lagged impact from brands on profitability.

This limited the study to

provide a useful insight into the role of brands in determining corporate financial
performance such as higher margin and bottom line. Fourth, the dimension of retail brand
equity could be exploring further based on both financial based and customer-based
perspective. The four constructs proposed in this study explained variances at 67.2%.
Therefore, further research should be carried out in respect of other value driver,
concentrating on analyzing other antecedents and consequences. Finally, a longitudinal
research to assess causal relationships between customer-based brand equity and brand
financial performance is proposed.

One of the limitations of this study is that brand

financial data precedes brand equity data. This means that causality cannot be assessed
at the aggregate brand level.

A longitudinal study might help determine the time lag

between consumers perceptions of a certain brand, and the translation of these


perceptions into brand financial performance. Further, a time series analysis could be
useful in tracking trends in each market, and offering a comprehensive model that predicts
brand financial performance based on changes in consumer perceptions.

This study demonstrated results about the impact of brand value, brand equity and the
value drivers for convenience store chains.

This study expects to stimulate further

research in this area and encourage more collaborative work between academics and
practitioners. A major benefit of such collaboration is to bring together valid and practical

163

methods with unique data to address important brand managerial problems.

5.5 Summary of Conclusions and Implication


In document 3, this study stated the arguments and debates of brand equity from both
financial and customer-based approach. The financial approach of brand equity is
essentially a cash-flow analysis.

The focus is on the return earned as a result to the

company. The major obstacle of financial approach is the difficulty to perceive customers
preference and perspective on corporate brand equity.

However, approach from

customers perspective such as perceived value, brand awareness, brand association and
brand loyalty are criticized too customer oriented and poor measure of brands profitability.
Therefore, a conjoining approach was initiated to link both financial and a customer-based
perspective in a coherent framework in document 3.

Based on the above initiated conceptual framework, the first empirical research was a
financial approach. This study formulated six hypotheses to investigate the impact of brand
value on corporate EVA/MVA and profitability.

In addition, this study tested the

application of the Hirose valuation model to measure brand value of Taiwans top ten listed
chain stores. The results showed that brand value have impact of price prestige driver
and loyalty driver and is positively related to corporate EVA/MVA and profitability in
document 4. This study also tried to explore the constructs/attributes of brand equity in
convenience store chains based on Rusts customer equity theory and linked them to
brand value through a customer survey.

However, the questionnaires were not clear and

poorly designed. This study failed to provide evidence of the relationship between brand
equity and brand value.

In document 5, this study successfully demonstrated a cause-effect linkage of brand equity,

164

brand value, corporate value performance for convenience store chains in Taiwan. This
study specifically conceptualized the concept of retail brand equity, and clarified the
construct through a psychometric instrument administered to consumers. These factors
influence the subjective evaluation of brand equity. More specifically, the main
contributions of this study can be identified as follows:
1. This study illustrated a conceptual model that link customer-based brand equity to
brand financial performance.

2. This study provided empirical evidence that brand has functions of price prestige and
loyalty driver and is positively related to corporate EVA and MVA in chain stores.

3. The research addressed the potential causal ordering among various components of
retail brand equity i.e. perceiver value, customer satisfaction and customer loyalty and
service quality, and tested the predictive capacity of the resulting instrument.

4. The constructs of retail brand equity were identified as metaphors of price prestige
driver and loyalty driver.

This implication was first highlighted in this study for theory,

managerial and research methods in marketing.

5. Therefore, this study has wider implications for fields such as account, marketing
strategy, and competitive strategy, as well as, made a significant contribution to
management of branding for convenience store chains in Taiwan. .

165

PREFERENCES

Aaker, D.A. (1991), Managing Brand Equity, Capitalizing on the Value of a Brand Name,
The Free Press, N.Y.

Aaker, D. A. (1996), Building Strong Brands, New York: The Free Press.

Aaker, D. A. (2002), Brand Leadership, Simon &Schuster UK Ltd.

Aaker, D.A., Jacobson, R. (1994): The Financial Information Content of Perceived Quality,
Journal of Marketing Research, Vol. 31, Issue 2, pp191-202.

Aaker, D.A. and Kevin L.K. (1993), Interpreting Cross-Cultural Replications of Brand
Equity Research, Journal of Research in Marketing, 10,55-59

Aaker, D. and Joachimstahier E. (2002), Brand Leadership, Free Press, N.Y.

Allred, A.T. and Addam, H.L.(2000), Service Quality at Bans and Credit Unions: What do
Their Customers Say? International Journal of Bank Marketing, 18(4), 200-207

Abratt R. and Geoffrey B. (1989), Valuing Brands and Brand Equity: Methods and
Processes, Nova Southeastern University and University of the Witwatersrand.

Anderson, E.W. and Fornell, C., (2000),Foundations of the American Customer


Satisfaction Index, Total Quality Management, 11 (7), 869-882.

Anderson, E.and Barton W. (1989), "Determinants of Continuity in Conventional Industrial


Channel Dyads," Marketing Science, 8 (4),310-23.

Anderson, J.C. and Gerbing, D.W., (1988), Structural Equation Modeling in Practice: A
Review and Recommended Two-Step Approach, Psychological Bulletin, 103(3), 411-423

166

Anderson J. (1996), Customer Relationship Management- Making Hard Decision with Soft
Number, New Jersey: Prentice Hall International.

Anderson, E.W. and Sullivan M. W. (1993), The Antecedents and Consequences of


Customer Satisfaction for Firms, Marketing Science, 12(2), 125-143.

Arora, R. and Singer, J., (2006), Customer Satisfaction and Value as Drivers of Business
Success for Fine Dining Restaurants, Service Marketing quarterly, 28(1), 89-102.

Agarwal, M.K. and Rao, V.R. (1996), An Empirical Comparison of Consumer-Based


Measures of Brand Equity, Marketing Letters, Vol. 7, No. 3, pp237-247.

Ailawai et al. (2006), Promotion Profitability for a Retailer: The Role of Promotion, Brand,
Category, and Store Characteristics, Journal of Marketing Research, vol.XLIII (Nov. 2006),
518-535.

Ailawai and Biri (2007), An Empirical Analysis of the Determinants of Retail Margins: The
Role of Store Brand Share. Journal of Marketing Research.

Abele K. P.N. (2008), Customer Equity: Dimensions and Realisation Process, Thesis of
Leicester Business School.

Abimbola T. M. L. (2003), Consumer Brand Equity: A Model for the Measurement,


Analysis and Evaluation of Consumer Perceived Value, Thesis of Aston Business School.

Anderson, E. W. and Fornell, C., (2000), Foundations of the American Customer


Satisfaction Index, Total Quality Management, 11(7), 869-882. 6.

Anderson, E. W. and Sullivan M. W., (1993), The Antecedents and Consequences of

167

Customer Satisfaction for firms, Marketing Science, 12(2), 125-143.

Biel. A. (1992), How Brand Image Drives Brand Equity, Journal of Advertising Research,
12(Dec.): 6-12. ARF Researching the Power of Brands Workshop.

Biel, A. L. (1997), .Discovering brand magic: The hardness of the softer side of branding,
International Journal of Advertising, 16: 199-210.

Barwise, P., Higson, C., Likierman, A., and Marsh, P. (1990), "Brands as 'Separable
Assets'", Business Strategy Review, Summer, 43-59.

Barwise P. (1993), Brand Equity: Snark or Boojum, International Journal of Research in


Marketing, 10(1), 93-104.

Bendixen M. et al.,(2003), Brand Equity in the Business-to-Business Market, Industrial


Marketing management, 33, 371-380

Blooemer J., Ruyter, K. D. and Peeters, P., (1998), Investigating Drivers of Brand Loyalty:
the Complex Relationship Between Image, Service Quality and Satisfaction, International
Journal of Bank Marketing, 16(7), 276-286.

Blackett T. (2003), What is a Brand in Brands and Branding, adapted from www.
Interband.com.

Baldauf A. et al. (2003), Performance Consequences of Brand Equity Management:


Evidence from Organizations in the Value Chain. Journal of Product & Brand
Management, Vol.12 No. 4, 2003, PP 220-236, MCB Up Limited.

168

Becerra, M. (2009), Theory of the Firm for Strategic Management, Cambridge University
Press, N.Y.

Berger et al., (2006), From Customer Lifetime Value to Shareholder Value, Journal of
Service Research, Vol. 9, 156-167.

Baldauf, A., Cravents, K.S. and Binder, G. (2003) Performance consequences of brand
equity management: Evidence from organizations in the value chain, Journal of Product
and Brand Management, Vol. 12, No. 4, pp. 220-236.

Batra R., John G. Meyers and David, A. A (1996),Advertising Management,

New Jersey:

Prentice H

Bloemer, J., Ruyter, K. D. and Peeters, P., (1998),Investigating Drivers of Bank Loyalty:
the Complex Relationship Between Image, Service Quality and Satisfaction, International
Journal of Bank Marketing,16(7), 276-286.15.

Blackston M.(1992), "Observations: Building Brand Equity by Managing the Brand's


Relationship," Journal of Advertising Research, (May/June), Rc2.

Blackston M. (1992a), "Corporations Are People too: Managing Customers Relationship


with the Corporate Brand," in, Seminar on the Challenges of Branding Today and in the
Future Brussels: ESOMAR. 113-128.

Blackston M.(1995), "The Qualitative Dimension of Brand Equity," Advertising Research


Foundation (ARF) Brand Equity Workshop, New York: February 1995.

Blattberg, R. C. and J. Deighton (1996), Manage Marketing by the Customer Equity Test.

169

Harvard Business Review 74(4), 136-144.

Bolton, R. N. and Drew, J. H., (1991), A Multistage Model of Customers Assessments of


Service Quality and Value, Journal of Consumer Research, 17, 375-384.16.

Bonner, P. G. and Nelson, R., (1985), Product Attributes and Perceived Quality: Foods,
Perceived Quality, edited by Jacoby, J. and Olson, J. C., Lexington Books, New York,
64-79.

Bowbrick P. (1992), The Economics of Quality Grades and Brands. London: Routledge.

Breur, T., (2006), The Importance of Focus for Generating Customer Value, Journal of
Financial Services Marketing, 11(1), 64-71. 18.

Brand Finance PLC.(2000), Current Practice in Brand Valuation.

Butz, H. E. and Goodstein, L. D., (1996), Measuring Customer Value: Gaining the
Strategic Aadvantage, Organizational Dynamics, 24(3), 63-77.19.

Breck Associates In.: http://www.brecker.com/

Babakus, E. and Boller, G.W. (1992), An Empirical Assessment of the SERVQUAL Scale,
Journalof Business Research, Vol. 24, pp. 253-68.

Bolton, R.N. and Drew, J.H. (1991), A Multistage Model of Customers Assessment of
Service Quality and Value, Journal of Consumer Research, Vol. 17, March, pp. 375-84.

170

Busacca B, Michele C. and Fabio A. (2008), Creating and Managing Superior Customer
Value, Advances in Business Marketing and Purchasing, Vol. 14, 149-204

Cardozo, R. N., (1965),An Experimental Study of Customer Effort, Expectation and


Satisfaction, Journal of Marketing Research, 2(3), 244-249.20.

Chang, C. H. and Tu, C. Y., (2004), Exploring Store Image, Customer Satisfaction and
Customer Loyalty Relationship: Evidence from Taiwanese hypermarket Industry, Journal
of American Academy of Business, 7(2), 197-202.

Chen, S. and Quester, P.,( 2006), Modeling Store loyalty: Perceived Value in Market
Orientation Practice, Journal of Services Marketing, 20(3), 188-198.23.

Choi, D. H., Kim, C. M., Kim, S. I. and Kim, S. H.,(2006), Customer Loyalty and Disloyalty
in Internet Retail Stores: Its Antecedents and Its Effect on Customer Price Sensitivity,
International Journal of Management, 23(4), 925-942.24.

Cobb-Walgren, C. J., Ruble, C. A. and Donthu, N.,(1995), Brand Equity, Brand Preference,
and Purchase intent, Journal of Advertising, 24(3), 25-40.25.

Choong, J.N. (1998), The Theory of Reasoned Action Applied to Brand Loyalty, Journal
of Prouct and Brand Management, 7 (11), 51-61.

Cronin, J. J. Jr., Brady, M. K. and Hult, G. T. M., (2000),Assessing the Effects of Quality,
Value, and Customer Satisfaction on Consumer Behavioral Intentions in Service
Environments, Journal of Retailing, 76(2),193-216.26.

171

Cronin, J. J. Jr. and Taylor, S. A., (1992), Measuring Service Quality: A Reexamination
and Extension, Journal of Marketing, 56(3), 55-68. 27.

Czepiel, J. A., (1974), Perspective on Customer Satisfaction, American Management


Association, New York.

Convenience store research: www.nacsonline.com

Day, R. L., (1977), Extending the Concept of Consumer Satisfaction, Advance in


Consumer Research, 4(1), 149-154.

Dubin, J. A. (1998),Studies in Consumer Demand: Econometric Methods Applied to


Market Data, Kluwer academic Springer.

Davis, S. M. and Michael D. (2002), Building the Brand-Driven Business, Jossey-Bass; 1


edition.

Dodds, W. B., Monroe, K. B. and Grewal, D., (1991), Effects of Price, Brand, and Store
Information on Buyers Product Evaluation, Journal of Marketing Research, 28(3),307-319.

De Chernatony, L. and Malcolm M. (1992), Creating Powerful Brands in Consumer,


Service and Industrial Markets, Greart Brotaon.

De Chernatony, L. (2001), From Brand Vision to Brand Evaluation, Elsevier Ltd.

De Chernatony, L. and F. Dall'Olmo Riley (1998) Defining "brand" : beyond the literature
with experts' interpretations, Journal of Marketing Management, Vol.14, No.5, pp.417-443.

Das et al. (2009), Managing tomorrows brands: Moving from measurement towards an
integrated system of brand equity. Brand Management Vo.17. 1.26-38

172

Doyle P. (1990), "Building Successful Brands: The strategic Options," Journal of Consumer
Marketing 7, (2),3-20.

Doyle P. (1992), "What are Excellent Companies", Journal of Marketing Management, 8,


101-116.

Doyle, P. (1994), Marketing Management and Strategy. London: Prentice Hall Europe.

Doyle P. (1995), "Marketing in the New Millennium", European Journal of Marketing, 29


(13), 23-41.

Doyle, L.E., Nolan,K. E., Mullany F. J., Ambrose, E.(2007), "Value-Creation and Migration in
Adaptive and Cognitive Radio Systems", Arslan, Huseyin (Ed.), Springer, Available:
February, 2007. ISBN-10: 1-4020-5541-2.

Doyle P. (2000), Value Based Marketing: Marketing Strategies for Corporate Growth and
Shareholder Value, Chicester: John Wiley and Sons.

Davis, S.M., and Dunn, M. ( 2002), " Building the Brand-Driven Busines
Operationalization, pp. 135-158

Elliott, R. and Larry P. (2007), Strategic Brand Management, Oxford University Press Inc.,
N. Y.

Epstein, M. J., Jean-francois M. (2006), Performance Measurement and Management


Control: Improving Organizations and Society, Elsevier Ltd. USA.

173

Farguhar P.H. (1989), Managing Brand Equity, Journal of Advertising Research


(August-Septerber), Rc7-Rc12).
Feldwick, P. (1996), ``Do we really need ``brand equity?''', The Journal of Brand
Management, Vol. 4 No. 1, pp. 9-28.
Ferjani.et al., (2008), A Conjoint Approach for Customer-and-Firm-Level Brand Valuation,
Journal of Marketing Research, Vol:xlv, American Marketing Association.

Fetscherin M. and Mark F. T. (2008), Valuating Brand Equity and Product-related


Attributes in the Context of the German Automobile Market, Palgrave Macmillan
1350-231x Brand Management, Vol 17.2 134-145.

Floor K. (2006), Branding a Store, TBWA Company, Ko Floor and BIS Publishers,
Amsterdam.

Fournier S. (1998),Consumers and Their Brands: Developing Relationship Theory in


Consumer Research, Journal of Consumer Research. 24(Mar.): 343-373.

Fournier, S., Dobscha, S., and Mick, D. (1998), Preventing the Premature Death of
Relationship Marketing, Harvard Business Review. 76(1): 43-50.

Fornell, C., (1992), A National Customer Satisfaction Barometer: the Swedish Experience,
Journal of Marketing, 56(1), 6-21.

Franzen, G., and Bouwman, M. (2001), The Mental World of Brands, Henley-onThames, World Advertising Research Cente

Grant R.J. (1991), The resource-based Theory of Competitive Advantage: Implications for

174

Strategy Formulation, Journal 103-367-879 (Last edited on 2003/09/19 01:15:24 GMT-6)

Grant, J. (2006), The Brand Innovation Manifesto- How to Build Brand, John Wiley &
Sons Ltd.

Grewal, D., Krishnan, R., Baker, J. and Borin, N., (1998),The Effects of Store Name,
Brand Name and Price Discounts on Consumers Evaluations and Purchase Intentions,
Journal of Retailing, 74(3), 331-352.

Ghodeswar B. M. (2008), Building brand identity in competitive markeks: a conceptual


model, Journal of Product & Brand Management 17/1, 4-12, Emerald Group Publishing
Ltd.

Gabay G. et al. (2009), Consumer Centered Brand Value of Foods: Drivers and
Segmentation, Journal of Product & Brand Management, 18/1 (2009) 4-16, emerald
Group Publishing Limited.

Gregroy J. et al. (2009), A New Brand of Value- Integrating Branding into Corporate
Performance Management.

Gronholdt, L., Martensen, A. and Kristensen, K., (2000),The Relationship between


Customer

Satisfaction

and

Loyalty:

Cross-Industry

Differences,

Total

Quality

Management, 11(4-6), 509-514.

Grnroos C. (1982), Adopting a Service Logic for Marketing, Marketing Theory, Vol 6.,
No. 3, 99, 317-333.

Grnroos, C. (1982), Strategic Management and Marketing in the Service Sector,


175

Wedish School of Economics and Business Administration.

Gardner B. B. and Levy S.J. (1955), The Product and the Brand HBR, Vol 33, pp 33-39.

Hallbery G. (1995), All Consumers are not Created Equal, Wiley, N.Y.

Hartline, Michael D., and O.C. Ferrell (1996), The Management of Customer-Contact
Employees: An Empirical Investigation, Journal of Marketing, 60 (October), pp. 52-70.

Haight, D. (1999), Understanding the Financial Value of Brands- Brand Finance Report,
Brand Finance plc. www.brandfinance. Com.1999

Haigh, D. and Jonathan K. (2004), How to Define Your Brand and Determine Its Value.,

Hirose. Y. et al. (2002), The Report of the Committee on Brand Valuation, the Ministry of
Economy, Trade and Industry of Japan Government.

Heding, T., Charlotte F.K., Mogens B. (2009), Brand Management: Research, Theory and
Practice, Simultaneously USA and Canada.

Hutton, J.G. (1997), A study of Brand Equity in an Organization-buying Context, Journal


of Production and Brand Management, Vol. &, No. 3, pp 428-439.

Holehonnur et al. (2009), Examining the Customer Equity Framework from a Consumer
Perspective, Palgrave Macmillan 1350-231x, Brand Management, Vol17.3.165-180

Hogan, J. E., D. R. Lehmann, M. Merino, R. K. Srivastava, J. S. Thomas and P.C. Verhoaf


(2002),Linking Customer Assets to Financial Performance. Journal of Service Research,
5(1) (Aug), 26-38.

176

Haxthausen O. (2009), Valuing Brands and Brand Investments: Key Learnings and Future
Expectations, Brand Management, Vol. 17,1, 18-25

Investopedia (2007): www.ivestopedia.com

Interbrand Brand Channel: http://www.brand.channel.com/Ind, N. (2005), Beyond


Branding: How the New Values of Transparency and Integrity are Changing the World of
Brands., Kogan Page Ltd.,

Ingenbleek P. (2007), Value-Informed Pricing in Its Organizational Context: Literature


Review, Conceptual Framework, and Directions for Future Research, Journal of Product
and Brand Management, 16/7 441-458, Emerald Group Publishing Limited.

Ishikawa A. (2002), The Success of 7-Eleven Japan, The Sanno Institute of Management,
World Scientific Publishing Co. Pte. Ltd.

Ind, N. (2003), Beyond Branding- How the New Values of Transparency and Integrity are
Changing the World of Brands, London N1 91N, UK

Jones, R. (2005), Finding Sources of Brand Value: Developing a Stakeholder Model of


Brand Equity, Henry Stewart Publications 1350-231x Brand Management, Vol. 13, No. 1,
10-32, 2005.

Jacoby. J., Chestnut, R.W. and Fisher. W.A..(1978). A Behavioral Process Approach to
Information Acquisition in Nondurable Purchasing, Journal of Marketing, Zeseal.clz
15.4.532-544.

Kapferer, J.N. (1997), Strategic Brand Management, New Approach to Creating and
Evaluating Brand Equity. London Kogan Page.

177

Kapferer, J.N. (2001), Re-inventing the Brand: Can Top Brands Survive the New Market
Realities? London Kogan page.

Kapferer, J. N. (2004), The New Strategic Brand Management: Creating and Sustaining
Brand Equity Long Term, Great Britain by MPG Ltd., Bodmin, Cornwall

Keller, K. L. (1993),Conceptualizing, Measuring, and Managing Customer-based brand


Equity, Journal of Marketing Vol.57, 1-22

Keller, K. L. (1998), Strategic Brand Management- Measuring and Managing Brand


Equity, Prentice Hall, N. J.

Keller, K.L. (2001), Building Customer-based Brand Equity, Marketing Management:


Chicage, Vol.10, No. 2, pp. 171-191.

K.V.S.S. , Narayanna Rao (2008), Management Account: Brand Valuation.

Kerin, R. A. and Raj S. (1998), Exploring the Brand Value-Shareholder Value Nexus for
Consumer Goods Companies, Academy of Marketing Science.

Koller, T., Marc G., David W., Jeffrey P. L. (1990), Valuation Workbook, Mckinsey &
Company Inc.

Kotler, P., (2003), Marketing Management, 11th ed., Prentice-Hall, Englewood Cliffs

Kolter P., Swee H.A., Leo, S.M., Tan C.T. (1990), Marketing Management- An Asian
Presents, Pretice Hall, Inc.

Knowles J. (2003), In Search of a Reliable Measure of Brand Equity, Best of Marketing


NPV, Vol. 1 & 2.

178

Knowles J. (2003), Value-Based Brand Measurement and Management, Henry Stewart


1463-5178, Interactive Marketing, Vol 5 No. 1, PP 40-50.

Kim, W.G. and Kim, H.B. (2003) The Relationship between Brand equity and Firms
Performance in Luxury Hotels and Chain Restaurants, Tourism Management, Vol.26, No.
4, pp.549-560.

Kokkinaki F.and Tim A. (1999), Marketing Performance Assessment: An Exploratory


Investigation into Current Practice and the Role of Firm Orientation, Marketing Science
Institute, 1999 [99-114]

Klaus P. and Stan M. (2007), The Role of Brands in a Service-Dominated World, Brand
Management Vol. 15, No.2, 115-122, 2007.Palgrave Macmillan Ltd.

Keller K.L. and Donald R. L. (2009), Assessing Long-Term Brand Potential, Brand
Management, Vol.17, 1,6-17.

Kotler, P. (2000), Marketing Management Analysis, Planning, Implantation and Control,


10th Ed. (NJ: Prentice Hall)

Kortge, G.D. and Okonkwo, P.A.(1993). Perceived value approach to pricing. Industrial
Marketing Management, 22, 133-40

Low, G. S. and Jakki J. M. (2006), Advertising vs Sales Promotion: A Brand Management


Perspective, Journal of Product and Brand Management, vol. 9, No. 6 2000, pp 389-414,
MCB University Press.

Laboy P. (2009), The Importance of Measuring Brand Value and Brand Equity, COO,
Tocquigny , www.tocquigny.com, 16.09.2009

179

Levitt, T. (1960), Marketing myopia, Harvard Business Review, July- August, 45-46.

Laurent, G., Kapferer, J.N. and Roussel, F. (1995), The Underlying Structure of Brand
Awareness Scores, Marketing Science, Vol. 14, No. 3, pp 170-179.

Leone et al. (2006), Linking Brand Equity to Customer Equity), Journal of Service
Research, Vol. 9, No. 2, November 2006 125-138.

Laboy, R. (2009), Understanding Brand Value Creation. Hattp://www.tippingspring.com.

Lichtenstein D.R. and Burton S. (1990), "An Assessment OF the Moderating Effects of
Market Mavenism and Value Consciousness on Price-Qualtiy Perception Accuracy, in
Advances in Consumer Research Volume 17, eds. Marvin E. Goldberg, Gerald Gorn, and
Richard W. Pollay, Provo, UT : Association for Consumer Research, Pages: 53-59.

Lannon J. and Peter C. (1983), Humanistic advertising: A holistic Cultural Perspective,


International Journal of Advertising, 2, 195-213.

Meyers, D., Jack Y., Sicco, V.G. (2005), Beyond Branding: How the New Values of
Transparency and Integrity Are Changing the World of Brands, Kogan Page Ltd.

Mybigmedia:

http://mybigmedia.wordpress.com/about/

Business

Finance-Oriented

Valuation Models (2008).

Martin-Consuegra D. et al. (2007), An Integrated Model of Price, Satisfaction and Loyalty:


An empirical Analysis in the service Sector, Journal of Product and Brand Management,
16/7 459-468, Emerald Group Publishing Limited.

Murphy, J. (1990), Brand Strategy, Cambridge: Director Books

180

Murphy, (1990), Assessing the Value to Brands, Long Range planning, vol. 23, 3, pp.
23-9.

Morgan, R M and S D Hunt (1994), The Commitment-Trust Theory of Relationship


Marketing. Journal of Marketing, July, 20 - 38.

Murphy, (1992), Assessing the Value of Brands, What is Branding?, In Branding A key
Marketing tool, McMillan, pp. 1-12 and 189-197.

Murphy J. and Hart S. (1998), Brands- The New Wealth Creator, London Press.

Myers C. A. (2003), Managing Brand Equity: A Look at the Impact of Attributes, Journal of
Product and Brand Management, Vol. 12 No.1, p.p.39-51, Emerald Group Publishing
Limited.

Monroe, K. B. and Krishnan, R., (1985), The Effect of Price on Subjective Product
Evaluation, Perceived Quality: How Consumers View Stores and Merchandise, Edited by
Jacoby, J. and Olson, J. C.,Lexington Books, Lexington, 209-232.

McNaughton R.B., Phil O., Brian C. (2002), "Market-Oriented Value Creation in Service
Firms", European Journal of Marketing, Vol. 36 Iss: 9/10, pp.990 - 1002

Neal. W. and Ron S. (2008), Value Creation: The Power of Brand, South Western
educational Publishing.

Narver J.C. and StanlyF.S. (1990), The Effect of a Market Orientation on Business
Profitability, Journal of Marketing.

181

Nussenbaum D.A. (1990), Cost Analysis and Estimating Tool and Techaniques, Springer,
Verlag, ISBN 0387973257

Ong A. (2001), Changes in Brand Accounting for UK Companies, Nenry Stewart


Publications 1350-231X Brand Management, Vol. 9, No. 2, 116-126, 2001.

Okano H. et al, (1999), Implementing Brand Management in the Japanese Companies:


Related with Target Cost Management, Osaka City University.

Oliver, R. L., (1997), Satisfaction: A Behavioral Perspective on the Consumer,


McGraw-Hill, New York.

Oliver, Richard L. (1980), A Cognitive Model of the Antecedents and Consequences of


Satisfaction Decisions, Journal of Marketing, Vol.17, PP.460-464

Pecotucg A. and Clifford J. (2006), Hand Book of Markets and Economics: East Asia,
Southeast Asia, Australia and New Zeland, M.E. Shape.

Park,C. and Srinivasan, V. (1994), A Survey-based Method for Measuring and


Understanding brand equity and its extendibility, Journal of Marketing Research, Vol.31,
No. 2, pp. 271-288

Patterson, P. G. and Spreng, R. A., (1997), Modeling the Relationship between Perceived
Value, Satisfaction and Repurchase Intentions in a Business-to-Business, Services
Context: An Empirical Examination, International Journal of Service Industry Management,
8(5), 414-434.

Parasuraman, A. and Grewal, D., (2000), The Impact of Technology on the


Quality-Value-Loyalty Chain: A Research Agenda, Journal of the Academy of Marketing
182

Science, 28(1), 168-174.58.

Parasuraman, A., Zeithaml V. A. and Berry, L. L.,(1988),SERVQUAL: A Multiple-Item


Scale for Measuring Consumer Perceptions of Service Quality, Journal of Retailing, 64(1),
12-40.

Peter, J. P., Olson, J. C., & Grunert, K. G. (1999), Consumer behaviour and marketing
strategy, European edition. London: McGraw-Hill.

Petrick, J. F., (2002), Development of a Multi-Dimensional Scale for Measuring the


Perceived Value of a Service, Journal of Leisure Research, 34(2), 119-134.

Porter, M.E. (1985), Competitive Advantage, Free Press.

Porter, M.E., (1987), From Competitive Advantage to Corporate Sstrategy, HBR, May
-June, pp. 43-58.

Rumelt, R.P. (1974),Strategy, Structure and economic performance, Cambridge: Harvard


University press.

Rumelt, R. P. (1997). Towards a Strategic Theory of the Firm. In N. J. Foss (Ed.),


Resources, firms, and strategies: A reader in the resource-based perspective: 131-145.
Oxford and New York: Oxford Management Readers series. Oxford University Press.

Rokeach, M. (1973), The Nature of Human Values, New York: Free Press.

183

Reichheld, F. F. & Sasser Jr, W. E., (1990), Zero Defections: Quality Comes to Services,
Harvard Business Review, Vol.68, No.5, pp.105-111

Raggio R. and Robert P. L. (2006), The Theoretical Separation of Brand Equity and Brand
Value: Managerial Implications for Strategic Planning, 1350-231X, Brand Management,
Vol 14, No.5, 380-395, 2007, Palgrave Macmillan Ltd.

Raggio R. and Robert P. L. (2009), Chasing brand value: Fully leveraging brand equity to
maximize brand value, Brand Management, Vol 16, No. 4, 248-263, Palgrave Macmillan
Ltd.

Raggio R. and Robert P. L. (2009), Driver of Brand Value estimation of Brand Value in
Practice and case of Brand Valuation: Introduction to the specical issue, Journal of Brand
Management 17, 1-5 doi:10, 1057/bm 2009, 16

Rintamki T., Hannu K., Lasse M.(2007) "Identifying Competitive Customer Value
Propositions in Retailing", Managing Service Quality, Vol. 17 Iss: 6, pp.621 - 634

Rust R.T. et al, (2000), Driving Customer Equity- How Customer Lifetime Value is
Reshaping Corporate Strategy, Simon & Schuster. Inc., USA

Rust R. T. et al. (2004), Return on Marketing: Using Customer Equity to Focus Marketing
Strategy, Journal of Marketing, Vol.68, 1090127

Rust R. T. et al. (2004), Customer-Centered Brand Management, Harvard Business


Review, Reprint RO40911.

Ross. S.A et al. (2006), Corporate Financial Fundamentals, McGraw Hill Co. Inc., NY
10020, USA.

184

Reichheld, F. F. and Sasser, W. E. Jr., (1990), Zero Defection: Quality Comes to Service,
Harvard Business Review, 68(5), 105-111.

Simon C.J. and MW Sullivan (1990), The Measurement and Determinants of Brand Equity:
A Financial Approach, Marketing Science Institute (MSI) Vol.12, No. 1, winter 1993, USA.

Smith, J.W. (1991),Thinking About Brand Equity and the Analysis of Customer
Satisfaction , in Maltz, E.(Eds.), Managing Brand Equity: A Conference Summary, Market
Science Institute, MA, Report No. 91-110, pp17-18.

Silk, A.J. and Urban, G.L. (1978), Pre-test Market Evaluation of New Packaged goods: A
Model and Measurement Methodolody, Journal of Marketing Research, Vol. 15, pp.
171-191.

Sjodin H. (2006),Financial Assessment of Brand Extensions, Palgrave Macmillan Ltd.


Brand Management Vol. 14, No.3, 223-231, 2003.

Schmitt H. B. and David L. R. (2008), Hand Book on Brand and Experience Management,
Edward Elgar Publishing, P.100-107

Salinas G. (2009), The International Brand Valuation Manual, Jone Wiley & Sons Ltd,
The Atrium, Southern Gate, Chichester, West Sussex, Po19 85Q, U.K.

Srivastava, R.K. et al. (1998), Market-Based Assets and Shareholder Value: A Framework
for Analysis, Journal of Marketing, Vol.62, 2-18

Salinas G. and Tim Ambler (2009), A Taxonomy of Brand Valuation Practice:


Methodologies and Purposes , Brand Management Vol 17, 1, 39-61.

185

Schonfelder J. B. (2004), Brand Values and Brand Strategy in High-Tech Consumer


Market, Thesis of Manchester Metropolitan University Business School.

Shamma H. M. and Salah S.H. (2009), Customer and Non-Customer Perspectives for
Examining Corporate Reputation, Journal of Product and Brand Management, 18/5
326-337, Emerald Group Publishing Limited.

Sheth, J. N., Newman, B. I. and Gross, B. L., (1991), Consumption Values and Market
Choices: Theory and Application, South-Western, Cincinnati.

Sheth, J. N. and Parvatiyar, A. (1993), The Evolution of Relationship Marketing, Paper


presented at the 6th Conference on Historical Thoughts in Marketing. Atlanta, GA.

Sheth, J. N. and Parvatiyar, A. (1995), Relationship marketing in consumer market:


Antecedents and consequences, Journal of the Academy of Marketing Science, 23(4):
255-271.

Sheth, J. N. & Parvatiyar, A. (2000), Handbook of Relationship Marketing London:


Sage.

Schoenfelder, J. & Harris, P., (2004). High-tech Corporate Branding: Lessons for Market
Research in the next Decade , Qualitative Market Research. 7(2), 91-99.

Smith J. M. and Skousen K.F.(1987). Intermediate Accounting,

9th ed. Cincinnati:

South-Western Publishing, 1987.

Srivastava R.K., Liam F., H.K. (2001), The resource-based view and marketing: The role

186

of market-based assets in gaining competitive advantage, Journal of Management

Sweeney J.D. and Soutar G.N. (2001), Consumer perceived Value- the Development of
Multiple Item Scale, Journal of Retailing, 77(2): 203-220.

Toshifumi, Z. (2004), The Bible of 7-Eleven Retail Business, Kodansha Ltd.

Tzokas, N., and Saren, M. (1998), Value Transformation in Relationship Marketing,


Paper presented at the Proceedings of the 6th International Colloquium in Relationship
Marketing, Auckland, NZ.

Tzokas, N., & Saren, M. (2004)., Competitive Advantage, knowledge and Relationship
Marketing: Where, What and How? Journal of Business & Industrial Marketing, 19(2),
124-135.

Tolba A. and Salah S. H. (2009), Linking Customer-Based Brand Equity with Brand
Market Performance: A Managerial Approach, Journal of Product & Brand Management,
18/5 356-366, Emerald Group Ltd.

Treacy, M., Wiersema, F.,(1993), Customer Intimacy and Other Value Disciplines,
Harvard Business Review 71 (1), 84-93.

Treacy, M., Wiersema, F., (1995), The Discipline of Market Leaders: Choose Your
Customers, Narrow Your Focus, Dominate Your Market, Addison-Wesley, Reading,

MA.
Tauber,(1988),Brand Leverage: Strategy for Growth in a Cost Control World,Journal of
Advertising Research, August/September, pp.26-30.

187

Turban E. (2002), Electronic Commerce, A Managerial Perspective, Prentice Hall, ISBN


0131854615.

Trout and Ries (1972), How to Position Your Product Advertising Age, 43, 114-16

Van den Brink, D., Odekerken-Schrder, G. and Pauwels, P.,(2006), The Effect of
Strategic and Tactical

Cause-related Marketing on Consumers Brand Loyalty, The

Journal of Consumer Marketing, 23(1), 15-25.

Van Riel A C R, de Mortanges C P, Streukens S.(2005), Marketing Antecedents of Industrial


Brand Equity: An Empirical Investigation in Specialty Chemicals, Industrial Marketing
Management, 34(8). 841-847

Wang H., Yujie W., Chunling Y. (2008), Global Brand Equity Model: Combining
Customer-Based with Product-Market Outcome Approach, Journal of Product & Brand
Management, 17/5 305-316, Emerald Group Ltd.

Webster, F. E., (2000), Understanding the Relationships among Brands, Consumers and
Resellers, Journal of the Academy of Marketing Science, Vol. 28 Iss. 1, pp. 17-23

Woodraff, R.B. (1997), Customer Value: the Next Source for Competitive Advantage,
Journal of the Academice of Marketing Source, 25 (2): 138-153

Washbum and Plank (2002), Measuring Brand Equity- An Evaluation of Brand Equity and
A Financial Approach, Marketing Science, 12(11), 28-51

Woodside A.; Francesca G.;Michael G. (2008),Creating and Managing Superior Customer


Value, Emerald Group Publishing Limited, UK.

188

Whitwell S. (2010): www.intangible business.com Understaing Brand Equity and Brand


Value.

Woodman, R.W., Tolchinsky, P.D., (1982). Expectation Effects: Implications for


rganization Development.

Yeung, M. and Bala R. (2007),Brand value and firm performance nexus: Further empirical
Yoo, B. and Donthu, N.,( 2001), Developing and Validating a Multidimensional
Consumer-based brand equity scale, Journal of Business Research, 52(1), 1-14.71.

Yoo, B., Donthu, N. and Lee, S., (2000), An Examination of Selected Marketing Mix
Elements and Brand Equity, Journal of the Academy of Marketing Science, 28(2) 195-211.

Young S. D. and Stephen F. O. (2001), EVA and Value-Based Management,


McGraw-Hill Co. USA.

Zuo, W. C. (2008), The Theory of Brand Value, A Scientific Methodology of Brand


Valuation and Brand Management, the People Republic of China

Zeithaml, V. A. (1988), Consumer Perceptions of Price, Quality and Value: A Means-End


Model and Synthesis of Evidence, Journal of Marketing, 52(3), 2-22.

189

(Appendix I)

Taiwan Top 20 Chain and Franchise Stores


Financial Statement (Period: 2000-2009)
Corporate Brand

2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern

Year
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08

Sales

56201706
63434566
72015000
77862000
80943000
93,673,610
99,979,618
102,363,841
102,191,258
101,756,386
932,639
818,554
681,000
754,000
779,000
721,000
645,000
623,000
666,000
683,000
18,056,170
16,927,480
16,569,000
17,763,000
17,161,000
18,231,000
18,549,000
20,515,000
21,033,000

Cost of Sales

39923040
45550414
50686000
54490000
56384000
65,514,526
69,736,937
70,619,544
69,456,344
68,790,619
791,807
688,636
565,000
633,000
662,000
605,000
537,000
514,000
552,000
565,000
14,490,535
13,434,032
13,217,000
14,085,000
13,529,000
14,376,000
14,662,000
16,330,000
16,794,000

Unit: NT,000

Operation C. dv. And Promotion C Oversea Sales

15116780
16846788
18380000
20051000
21363000
23,982,044
25,728,680
26,890,764
28,127,987
28,072,304
120,420
116,439
118,000
116,000
109,000
99,000
91,000
98,000
100,000
100,000
3,315,159
3,232,015
3,214,000
3,315,000
3,180,000
3,156,000
3,237,000
3,510,000
3,534,000

13739174
15251218
16641607
17750068
18699298
21,003,015
22,789,148
24,445,774
25,573,274
25,955,712
69,639
69,848
70,476
69,727
65,088
58,905
55,829
63,477
64,164
67,510
557,564
551,053
389,396
487,508
626,477
602,347
692,677
851,024
822,954

327
81,585
188,077
176,500
153,027
147,375
320,220
174,427
169,153
556,091
8,011
1,450
5,124
199
8,398
11,811
124,701
106,207
41,213

Non-core Sales

798747
693640
604000
944000
837000
821,494
903,954
907,093
1,049,786
1,363,859
12,060
12,689
10,000
9,000
7,000
17,000
10,000
15,000
16,000
13,000
2,215,970
385,387
229,000
411,000
1,431,000
703,000
314,000
1,094,000
426,000
190

(Appendix I)

Taiwan Top 20 Chain and Franchise Stores


Financial Statement (Period: 2000-2009)
Corporate Brand

2903 Far Eastern


2906 Collins
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex

Year
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08

Sales

22,203,000
11,000,931
9,450,482
9,900,000
9,624,000
8,364,000
6,917,000
6,303,000
5,110,000
4,071,000
3,462,000
2,775,446
2,522,662
2,347,000
2,340,000
2,493,000
2,553,000
2,319,000
2,221,000
2,011,000
1,894,000
2,775,446
2,522,662
8,526,000
8,956,000
6,780,000
5,603,000
5,008,000
5,279,000
5,295,000

Cost of Sales

17,786,000
9,532,797
8,015,780
8,357,000
8,059,000
6,895,000
5,478,000
4,877,000
3,733,000
2,890,000
2,405,000
2,060,880
1,881,345
1,774,000
1,771,000
1,876,000
1,900,000
1,726,000
1,683,000
1,527,000
1,494,000
2,060,880
1,881,345
7,135,000
7,508,000
5,494,000
4,574,000
4,209,000
4,368,000
4,509,000

Operation C. Adv. And Promotion C.

3,727,000
969,428
945,360
1,045,000
1,148,000
1,158,000
1,084,000
1,131,000
1,108,000
1,038,000
963,000
315,135
279,318
273,000
262,000
266,000
261,000
239,000
237,000
240,000
246,000
315,135
279,318
1,242,000
1,283,000
946,000
1,092,000
1,052,000
1,066,000
1,048,000

876,528
969,428
945,360
1,045,000
1,148,000
1,158,000
1,084,000
1,131,000
1,108,000
1,038,000
963,000
315,135
279,318
273,000
262,000
266,000
261,000
239,000
237,000
240,000
246,000
315,135
279,318
1,242,000
1,283,000
946,000
1,092,000
1,052,000
1,066,000
1,048,000

Unit: NT,000

Oversea Sales

79,031
34,024
29,842
37,148
11,714
57,271
20,474
25,643
4,817
23,364
29,053
32,540
31,249
12,656
5,356
9,354
29,886
628,867
347,563
551,591

Non-core Sales

1,544,000
276,171
190,037
146,000
174,000
242,000
191,000
196,000
123,000
121,000
81,000
83,679
152,263
55,000
70,000
25,000
52,000
29,000
86,000
89,000
15,000
83,679
152,263
613,000
1,461,000
414,000
724,000
1,564,000
1,617,000
957,000

191

(Appendix I)

Taiwan Top 20 Chain and Franchise Stores


Financial Statement (Period: 2000-2009)
Corporate Brand

2915 Ruentex
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite

Year
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08

Sales

4,637,000
9,734,761
9,042,214
21,838,000
24,422,000
27,369,000
26,968,984
30,786,424
33,409,122
37,813,272
39,201,034
7,784,904
8,418,858
8,355,000
8,474,000
8,218,000
8,423,595
8,337,149
8,860,736
8,686,568
7,523,379
10,208,381
12,770,117
15,479,000
15,573,000
17,311,000
17,690,000
16,692,000
15,153,000
13,517,000

Cost of Sales

3,839,000
8,398,896
7,609,495
15,582,000
17,255,000
19,274,000
20,993,713
21,560,507
23,378,036
26,535,898
27,387,029
5,241,408
6,109,144
5,966,000
5,751,000
5,490,000
5,734,393
5,809,259
6,093,028
6,059,474
5,041,069
8,619,571
10,702,958
13,228,000
13,203,000
14,703,000
15,067,000
14,087,000
12,728,000
11,307,000

Operation C. Adv. And Promotion C.

940,000
1,342,130
1,243,926
5,727,000
6,541,000
7,314,000
7,900,838
8,538,712
9,341,711
10,545,934
11,017,941
2,686,583
2,245,645
2,281,000
2,523,000
2,462,000
2,503,076
2,591,795
2,710,515
2,721,147
2,563,778
1,273,315
1,560,994
1,735,000
2,272,000
2,006,000
2,000,000
1,946,000
2,043,000
1,880,000

940,000
1,120,951
1,019,461
5,458,164
6,264,548
7,003,405
7,552,491
8,168,655
8,920,487
9,914,673
10,278,460
2,686,583
2,245,645
2,281,000
2,523,000
2,462,000
2,503,076
2,591,795
2,710,515
2,721,147
2,563,778
1,273,315
1,560,994
1,735,000
2,272,000
2,006,000
2,000,000
1,946,000
2,043,000
1,880,000

Unit: NT,000

Oversea Sales

743,008
40
2,914
40,566
41,012
48,010
42,815
65,897
20,748
152,667
622
2,814
320,368
656,355
890,626
281,439
263,791
7,721
531
14,430
253,356
187,653
431,155
503,489
764,500
803,024

Non-core Sales

1,012,000
1,562,129
2,016,016
132,000
171,000
186,000
268,056
263,876
300,884
349,359
333,965
238,426
2,733,855
422,000
548,000
174,000
403,370
997,748
964,054
487,096
1,039,104
393,853
358,742
543,000
294,000
579,000
457,000
296,000
683,000
377,000

192

(Appendix I)

Taiwan Top 20 Chain and Franchise Stores


Financial Statement (Period: 2000-2009)
Corporate Brand

2908 Test Rite


2911 Les Enphan
2911 Les Enphan
2911 Les Enphan
2911 Les Enphan
2911 Les Enphan
2911 Les Enphan
2911 Les Enphan
2911 Les Enphan
2911 Les Enphan
2911 Les Enphan
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren

Year
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08

Sales

10,628,000
2,026,038
1,884,957
1,767,000
1,830,000
2,132,000
2,321,811
2,295,782
2,284,920
2,333,863
2,367,717
1,710,396
1,995,763
2,177,000
2,740,000
2,927,000
3,156,186
3,436,606
4,096,937
4,682,886
5,596,925
1,107,866
1,159,131
1,292,000
1,394,000
1,565,000
1,760,853
1,708,752
1,786,789
1,748,265

Cost of Sales

8,667,000
1,329,670
1,206,065
1,053,000
1,019,000
1,093,000
1,190,341
1,232,697
1,241,195
1,282,681
1,303,946
1,359,468
1,543,307
1,619,000
2,031,000
2,113,000
2,249,846
2,466,713
2,940,366
3,456,636
3,992,090
452,437
454,033
1,292,000
1,394,000
1,565,000
722,981
694,143
733,117
725,633

Operation C. Adv. And Promotion C.

1,794,000
745,188
715,585
733,000
736,000
879,000
1,010,161
1,023,036
1,007,240
1,057,289
1,044,157
325,412
383,314
485,000
622,000
684,000
732,401
836,365
984,285
1,187,737
1,380,494
558,016
607,259
454,033
508,000
529,000
598,000
854,981
888,973
861,190

1,794,000 615,983
589,519
613,213
620,049
752,088
844,672
878,596
853,364
884,408
870,178
282,415
330,747
409,642
538,335
592,550
620,554
724,329
845,543
993,714
1,096,561
398,839 450,371
488,593
511,071
566,284
667,093
653,419
687,920
668,648

Unit: NT,000

Oversea Sales

686,850
34,376
47,465
8,377
48,202
48,085
62,857
90,561
165,851
203,130
238,645
672
806
1,237
1,876
1,388
1,241
1,138
1,847
787

Non-core Sales

283,000
126,634
127,242
76,000
66,000
82,000
108,030
141,866
216,517
299,694
321,123
17,180
25,012
31,000
44,000
50,000
43,302
39,139
39,396
39,896
48,734
26,982
43,280
40,000
21,000
22,000
23,796
13,445
13,416
18,757

193

(Appendix I)

Taiwan Top 20 Chain and Franchise Stores


Financial Statement (Period: 2000-2009)
Corporate Brand
1233 Ten Ren
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake

Year
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08

Sales

1,760,853
12,346,676
13,525,154
14,134,000
15,113,000
16,215,000
15,842,000
14,723,000
17,801,000
23,092,000
20,175,000
1,467,934
1,361,009
1,356,000
1,390,000
1,465,000
1,560,000
1,453,000
1,600,000
1,798,000
1,847,000
693,500
626,382
586,000
756,000
1,161,000
1,490,000
1,543,000
1,420,000
1,093,000

Cost of Sales

722,981
10,961,057
11,999,789
12,633,000
13,942,000
15,131,000
14,096,000
13,303,000
16,228,000
21,620,000
18,055,000
931,794
831,690
872,000
915,000
1,000,000
1,044,000
1,006,000
1,145,000
1,300,000
1,295,000
215,170
212,310
213,000
315,000
557,000
773,000
853,000
846,000
643,000

Operation C. Adv. And Promotion C.

857,195
965,498
1,078,067
1,065,000
1,000,000
910,000
994,000
1,008,000
987,000
953,000
1,104,000
431,180
459,335
509,000
556,000
568,000
555,000
532,000
521,000
525,000
564,000
366,548
333,531
327,000
382,000
480,000
599,000
560,000
507,000
424,000

667,093
4,895
6,734
5,914 8,145
9,695
11,080
7,585
5,092
6,172
7,584
241,604
265,028
295,623
315,050
311,078
314,159
312,210
314,798
330,755
344,578
142,631
115,825
104,965
143,539
177,823
190,631
161,331
136,024
103,895

Unit: NT,000

Oversea Sales

1,996
119,019
86,777
55,161,621
149,418
29,845
17,616
386,121
649,321
421,106
362,240
364,444
127,098
149,923
106,666
46,488
15,663
5,114
34,737
91,338
377,116
-

Non-core Sales

11,250
317,299
248,111
136,000
254,000
149,000
211,000
633,000
816,000
708,000
538,000
70,060
105,586
235,000
325,000
300,000
126,000
17,000
242,000
126,000
448,000
68,084
145,316
179,000
116,000
137,000
78,000
39,000
76,000
44,000

194

(Appendix I)

Taiwan Top 20 Chain and Franchise Stores


Financial Statement (Period: 2000-2009)
Corporate Brand
5905 Nan Ren Lake
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
6281 E-Life
6281 E-Life
6281 E-Life
6281 E-Life
6281 E-Life
6281 E-Life
6281 E-Life
6281 E-Life
6281 E-Life

Year
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08

Sales

Cost of Sales

Operation C. Adv. And Promotion C.

734,000
7,560,546
10,031,736
14,038,000
23,217,000
30,390,000
29,996,993
29,558,776
33,341,571
30,883,924
27,013,682
46,775,989
47,029,273
55,579,000
65,607,000
62,104,000
57,590,117
52,331,627
51,359,728
47,432,803
42,195,384

424,000
5,920,271
7,697,008
10,985,000
18,858,000
24,901,000
24,336,436
24,026,270
27,439,440
25,651,430
22,647,996
43,542,751
44,172,295
52,478,000
62,072,000
58,503,000
53,747,907
48,974,049
48,303,507
44,530,433
39,680,111

371,000
1,558,584
1,748,384
2,277,000
3,489,000
4,508,000
4,586,416
4,496,389
4,736,963
4,649,955
3,511,195
1,415,985
1,441,738
1,558,000
1,513,000
1,809,000
1,918,691
2,113,974
2,036,015
2,254,065
1,802,875

105,195
1,024,810
1,297,176
1,718,908
2,814,146
3,829,507
3,829,215
3,155,243
3,505,014
3,668,870
2,959,696
810,959
792,135
997,157
1,119,262
1,337,530
1,465,918
1,653,075
1,501,587
1,637,099
1,111,590

7,011,000
9,514,000
11,380,000
13,337,970
12,986,391
15,066,813
13,954,412

5,243,000
7,228,000
8,676,000
10,141,628
9,972,001
11,632,762
10,798,770

1,592,000
1,949,000
2,241,000
2,582,285
2,466,555
2,738,362
2,646,068

1,312,884
1,648,450
1,916,709
2,221,844
2,103,238
2,373,786
2,295,455

Unit: NT,000

Oversea Sales

94,020
3,466
128,689
23,076
19,760
69,592
3,191,558
1,563,105
446,802
350,732
271,134
458,340
575,034
778,998
1,003,896
1,610,699
2,878,817
2,892,367
3,707,754

Non-core Sales

64,000
715,391
687,755
673,000
659,000
587,000
193,610
83,545
1,692,528
497,095
580,413
230,711
470,146
1,354,000
966,000
1,233,000
1,543,171
2,071,759
3,266,386
3,260,936
4,659,586

33,000
40,000
43,000
48,399
118,148
59,984
104,850

195

(Appendix I)

Taiwan Top 20 Chain and Franchise Stores


Financial Statement (Period: 2000-2009)
Corporate Brand
6281 E-Life
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo

Year
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

Sales

11,927,823
2,996,096
4,262,163
5,620,000
6,389,000
6,993,000
7,121,509
6,432,345
6,528,248
5,935,571
5,911,066
14,342,291
12,586,281
13,130,000
19,728,000
17,024,000
14,223,000
14,187,000
10,443,000
8,970,000
7,724,000

Cost of Sales

9,237,105
2,644,775
3,780,269
5,026,000
5,683,000
6,191,000
6,273,272
5,537,928
5,533,932
5,076,056
5,050,251
11,403,254
10,412,906
10,869,000
16,664,000
15,332,000
13,330,000
12,237,000
8,625,000
7,296,000
6,184,000

Operation C. Adv. And Promotion C.

2,215,758
211,079
320,380
402,000
436,000
533,000
603,966
541,753
538,205
606,323
645,511
2,270,950
2,079,055
2,069,000
2,221,000
2,226,000
2,488,000
1,993,000
2,105,000
1,626,000
1,480,000

1,891,270
173,413
244,640
315,614
340,813
431,325
495,178
445,771
450,460
516,905
542,887
2,270,950
2,079,055
2,069,000
2,221,000
2,226,000
2,488,000
1,993,000
2,105,000
1,626,000
1,480,000

Unit: NT,000

Oversea Sales

11,067
638
1,677
1,677
1,042
127,452
182,506
50,861
34,396
248,645
1,741,891
1,373,533
1,126,412
557,258
305,881

Non-core Sales

44,078
21,908
18,238
8,000
17,000
22,000
29,867
28,973
54,361
27,597
27,597
1722812
1302116
1550000
839000
515000
395000
298000
329000
4088000
279000

196

The Profitability of Taiwan Top 20 Chain and Franchise Store


(Period: 2004-2009)
Corporate Brands
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin

Year

Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

ROA

0.1086
0.1181
0.1107
0.0934
0.0810
0.0852
0.0106
0.0188
0.0043
0.0126
0.0233
0.0226
0.0459
0.0296
0.0186
0.0407
0.0100
0.0449
0.0516
0.0497
0.0379
0.0387
0.0131
0.0168
0.0619
0.0811
0.0739
0.0869
0.0763
0.0406

ROE

0.2163
0.2473
0.2453
0.2247
0.2153
0.2295
0.0132
0.0229
0.0051
0.0151
0.0276
0.0264
0.0900
0.0552
0.0299
0.0712
0.0128
0.0860
0.0771
0.0729
0.0508
0.0504
0.0155
0.0215
0.1268
0.1469
0.1239
0.1377
0.1124
0.0634

GM

NM

0.3034
0.3034
0.3025
0.3101
0.3203
0.3240
0.1501
0.1613
0.1676
0.1749
0.1716
0.1722
0.2116
0.2107
0.2096
0.2040
0.2015
0.1989
0.1757
0.2081
0.2262
0.2696
0.2901
0.3051
0.2476
0.2557
0.2557
0.2421
0.2308
0.2111

(Appendix II)
PM

0.0395
0.0446
0.0451
0.0474
0.0451
0.0481
0.0107
0.0236
0.0266
0.0179
0.0217
0.0250
0.0263
0.0374
0.0351
0.0329
0.0335
0.0311
0.0373
0.0513
0.0466
0.0527
0.0351
0.0268
0.1411
0.1535
0.1528
0.1354
0.1216
0.0814

0.0414
0.0494
0.0506
0.0470
0.0429
0.0456
0.0194
0.0339
0.0083
0.0260
0.0453
0.0440
0.0911
0.0571
0.0330
0.0723
0.0105
0.0914
0.0480
0.0592
0.0478
0.0566
0.0281
0.0348
0.1137
0.1447
0.1443
0.1562
0.1388
0.0772

197

The Profitability of Taiwan Top 20 Chain and Franchise Store


(Period: 2004-2009)
Corporate Brands
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2911 Le Enphans
2911 Le Enphans
2911 Le Enphans
2911 Le Enphans
2911 Le Enphans
2911 Le Enphans

Year

Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

ROA

0.0194
0.0347
0.0623
0.0742
0.0307
0.0327
0.0874
0.0796
0.0674
0.0655
0.0667
0.0629
0.0274
-0.0314
0.0670
0.0472
0.0212
0.0662
0.0992
0.0881
0.0570
0.0573
0.0304
0.0144
0.0383
0.0635
0.0404
0.0484
0.0481
0.0717

ROE

0.0183
0.0547
0.1057
0.1218
0.0429
0.0553
0.2297
0.2157
0.1854
0.1798
0.1930
0.1917
0.0375
-0.0669
0.1123
0.0704
0.0274
0.1192
0.1616
0.1323
0.0772
0.0965
0.0478
0.0240
0.0641
0.1126
0.0633
0.0698
0.0706
0.1062

GM

NM

0.1896
0.1836
0.1595
0.1727
0.1484
0.1722
0.2958
0.2928
0.2997
0.3002
0.2982
0.3014
0.3320
0.3192
0.3030
0.3124
0.3094
0.3299
0.1507
0.1483
0.1561
0.1600
0.1635
0.1845
0.4873
0.4873
0.4631
0.4568
0.4383
0.4493

(Appendix II)
PM

0.0501
-0.0113
-0.0502
-0.0293
-0.0496
-0.0304
0.0286
0.0266
0.0223
0.0206
0.0193
0.0203
0.0324
0.0223
-0.0077
0.0065
-0.0065
-0.0108
0.0320
0.0361
0.0405
0.0275
0.0252
0.0157
0.0752
0.0522
0.0166
0.0154
-0.0146
0.0078

0.0187
0.0683
0.1658
0.1953
0.0633
0.0971
0.0308
0.0300
0.0265
0.0245
0.0237
0.0244
0.0366
-0.0423
0.0906
0.0694
0.0206
0.1011
0.0544
0.0443
0.0266
0.0386
0.0226
0.0156
0.0509
0.0787
0.0661
0.0908
0.0969
0.1348

198

The Profitability of Taiwan Top 20 Chain and Franchise Store


(Period: 2004-2009)
Corporate Brands
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake

Year

Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

ROA

0.0931
0.1094
0.0735
0.0798
0.0927
0.0750
0.0859
0.0843
0.0850
0.0776
0.0883
0.1068
0.0200
0.0727
0.0874
0.0973
0.0719
0.0846
0.0347
0.0010
-0.0176
0.0135
0.0126
0.0792
0.1063
0.0671
0.0540
-0.0088
-0.0214
-0.0513

ROE

0.2709
0.2900
0.1567
0.1522
0.1778
0.1580
0.1528
0.1248
0.1282
0.1132
0.1228
0.1380
0.0255
0.1222
0.1457
0.1530
0.1056
0.1259
0.0558
-0.0162
-0.0533
0.0079
0.0049
0.1406
0.1663
0.0976
0.0720
-0.0168
-0.0429
-0.0841

GM

NM

0.2782
0.2872
0.2822
0.2823
0.2918
0.2867
0.6178
0.5967
0.5938
0.5897
0.5837
0.5894
0.0669
0.1102
0.0965
0.0884
0.0638
0.1051
0.3170
0.3308
0.3076
0.2846
0.2769
0.2990
0.5201
0.4808
0.4475
0.4041
0.4119
0.4230

(Appendix II)
PM

0.0443
0.0551
0.0389
0.0421
0.0485
0.0401
0.1194
0.0958
0.0934
0.0922
0.0911
0.1026
0.0107
0.0474
0.0281
0.0329
0.0225
0.0504
-0.0710
-0.0256
-0.0591
-0.0421
-0.0148
-0.0072
0.1065
0.0789
0.0846
0.0471
0.0244
-0.0818

0.0474
0.0616
0.0472
0.0497
0.0546
0.0465
0.1216
0.1000
0.0955
0.0855
0.0991
0.1086
0.0068
0.0490
0.0644
0.0699
0.0442
0.0704
0.0928
-0.0258
-0.0974
0.0336
0.0067
0.2047
0.2029
0.1243
0.1023
-0.0023
-0.0853
-0.2261

199

The Profitability of Taiwan Top 20 Chain and Franchise Store


(Period: 2004-2009)
Corporate Brands
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
6281 E-Life
6281 E-Life
6281 E-Life
6281 E-Life
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo

Year

Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

ROA

0.0822
0.0337
-0.1326
0.1676
0.0396
0.0782
0.0793
0.0887
0.0748
0.0968
0.0762
0.0991
0.1142
0.1220
0.1013
0.0910
0.1275
0.1016
0.1469
0.1967
0.0902
0.0792
-3.6600
-25.0200
-21.1000
-11.6000
26.4800
-0.2500

ROE

0.1839
0.0744
-0.3976
0.4878
0.0906
0.1931
0.1272
0.1386
0.1145
0.1529
0.1211
0.1617
0.2213
0.2347
0.1886
0.1717
0.2556
0.2015
0.2827
0.3325
0.1407
0.1215
-6.7400
-46.3700
-51.3900
-41.0900
61.1800
-1.2300

GM

NM

0.1806
0.1887
0.1879
0.1756
0.1624
0.1616
0.0580
0.0667
0.0642
0.0595
0.0616
0.0596
0.2321
0.2279
0.2258
0.2256
0.1147
0.1191
0.1390
0.1523
0.1416
0.1446
0.0994
0.0628
0.1375
0.1741
0.1866
0.1995

(Appendix II)
PM

0.0404
0.0418
0.0396
0.0350
0.0191
0.0318
0.0288
0.0334
0.0238
0.0199
0.0140
0.0169
0.0422
0.0462
0.0362
0.0398
0.0385
0.0343
0.0548
0.0699
0.0395
0.0364
-0.0314
-0.1122
-0.0003
-0.0275
0.0054
0.0079

0.0471
0.0200
-0.0733
0.0776
0.0299
0.0479
0.0466
0.0582
0.0545
0.0753
0.0721
0.1203
0.0506
0.0499
0.0434
0.0431
0.0391
0.0359
0.0591
0.0775
0.0382
0.0342
-5.9600
-38.3600
-28.6700
-20.4800
41.5200
0.0600
200

EVA of Taiwan Top 20 Chain and Franchise Store


(Period: 2004-2009)
Company
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin

year/M

Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

NOPAT

16,909,924
19,381,676
20,944,826
22,156,259
23,197,632
22,949,784
60,414
62,182
45,623
59,609
70,623
73,133
1,642,108
1,330,796
978,508
1,751,268
1,240,847
2,179,896
736,045
716,867
657,594
661,898
474,750
451,125
312,000
337,125
340,875
349,125
299,250
201,750

WACC

Capital

0.053
0.061
0.054
0.038
0.031
0.041
0.068
0.164
0.011
0.012
0.003
0.003
0.003
0.009
0.004
0.006
0.067
0.065
0.061
0.053
0.014
0.035
0.035
0.042
0.038
0.043
0.040
0.021

37,264,680
41,400,015
43,075,148
51,101,774
54,185,278
55,164,712
990,088 982,905 968,829
983,477
995,164
1,000,510
30,678,477
32,710,347
34,979,677
44,523,024
39,038,954
44,909,528
7,048,000
6,644,000
6,509,500
5,351,000
3,997,000
3,704,500
3,411,000
3,135,500
3,076,500
2,988,500
2,771,000
3,241,000

(Appensix III)
EVA

14,921,649
16,873,709
18,620,980
20,190,026
21,537,616
20,664,238
6,639
99,081
45,623
59,609
59,466
61,309
1,537,098
1,234,991
877,642
1,336,572
1,083,863
1,898,152
262,960
283,744
261,216
377,718
416,810
320,411
193,931
206,399
222,824
219,808
187,871
134,704

201

EVA of Taiwan Top 20 Chain and Franchise Store


(Period: 2004-2009)
Company
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2911 Le Enphans
2911 Le Enphans
2911 Le Enphans
2911 Le Enphans
2911 Le Enphans
2911 Le Enphans

year/M

Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-06
Dec-07
Dec-08
Dec-09
Dec-05
Dec-04
Dec-06
Dec-07
Dec-08
Dec-09
Dec-05
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

NOPAT

703,926
936,269
1,266,420
1,448,579
912,970
897,329
5,915,829
6,366,035
6,758,741
7,314,673
8,106,505
8,425,845
1,156,493
711,210
1,590,984
1,489,036
1,095,667
949,560
1,458,750
1,338,000
1,153,500
1,294,875
980,250
924,000
645,066
770,754
776,329
799,988
832,806
891,884

WACC

Capital

0.021
0.034
0.058
0.045
0.020
0.016
0.055
0.059
0.052
0.050
0.056
0.052
0.024
0.005
0.373
0.047
0.022
0.048
0.126
0.070
0.045
0.045
0.032
0.014
0.149
0.219
0.030
0.033
0.040
0.050

14,540,515
15,057,376
15,960,206
14,391,128
14,430,293
16,365,438
10,862,892
11,724,491
12,577,655
13,670,487
14,919,673
15,509,460
10,895,000
11,159,898
3,968,258
13,164,574
8,981,889
12,647,081
9,173,000
9,809,000
11,227,000
14,357,500
14,012,000
13,363,000
3,275,088
3,488,672
3,681,596
4,066,364
4,294,408
4,614,178

(Appensix III)
EVA

402,402
431,632
339,371
807,839
630,455
634,620
5,317,606
5,679,898
6,104,675
6,632,349
7,270,724
7,616,929
898,993
650,460
111,571
874,917
898,942
346,847
305,263
648,812
647,500
644,223
534,035
734,711
157,694
5,463
667,476
664,312
659,719
660,783

202

EVA of Taiwan Top 20 Chain and Franchise Store


(Period: 2004-2009)
Company
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake

year/M

Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

NOPAT

548,663
610,916
664,747
787,157
945,536
1,017,421
567,405
626,113
612,314
631,440
632,736
643,570
90,521
589,560
717,439
936,819
1,481,470
1,893,563
356,682
225,659
150,756
299,032
275,405
564,926
310,367
281,723
239,498
152,268
94,421
66,896

WACC

Capital

0.385
0.360
0.077
0.090
0.093
0.099
0.089
0.063
0.048
0.045
0.054
0.058
0.013
0.109
0.105
0.051
0.046
0.058
0.170
0.009
0.009
0.016
0.011
0.070
0.168
0.050
0.034
0.004
0.007
0.004

1,341,550
1,592,554
1,991,329
2,216,543
2,555,714
2,850,561
1,944,284
2,113,093
2,152,419
2,105,920
2,076,648
1,994,093
8,139,695
8,000,080
9,120,585
11,537,092
13,952,293
14,657,751
4,809,576
4,966,878
5,120,892
4,529,111
4,520,207
5,110,234
2,106,823
2,283,631
2,404,331
2,293,024
3,226,895
2,976,195

(Appensix III)
EVA

32,064
38,343
512,067
587,649
706,833
735,132
394,833
493,740
508,951
537,356
521,376
528,117
15,153
280,346
237,576
348,159
835,528
1,039,400
461,640
179,909
103,506
224,529
226,655
206,251
44,172
166,964
156,712
144,018
73,421
55,646

203

EVA of Taiwan Top 20 Chain and Franchise Store


(Period: 2004-2009)
Company
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2347 Synnes
2347 Synnes
2347 Synnes
2347 Synnes
2347 Synnes
2347 Synnes
6281 E-Life
6281 E-Life
6281 E-Life
6281 E-Life
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo

year/M

Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

NOPAT

4,314,591
4,140,950
3,408,803
4,712,217
3,506,795
3,203,887
3,205,947
3,614,189
3,440,306
4,176,283
3,879,074
4,641,443
2,070,179
2,344,340
2,176,091
1,803,953
529,250
562,664
619,328
717,345
558,679
563,915
1,411,499
167,234
1,419,000
1,232,319
4,013,250
1,271,250

WACC

Capital

0.054
0.035
0.005
0.171
0.052
0.182
0.010
0.057
0.057
0.039
0.032
0.044
0.814
0.072
0.080
0.084
0.256
0.104
0.100
0.075
0.069
0.069
0.004
0.005
0.008
0.011
0.336
0.005

13,476,212
13,435,853
9,217,664
11,141,834
11,372,726
5,653,849
27,810,916
27,579,918
32,330,075
40,051,587
44,331,099
47,919,590
4,548,238 4,930,786
4,831,455
4,072,270
1,336,666
1,453,219
1,544,771
1,687,460
1,602,905
1,773,887
22,322,000
18,837,000
17,767,000
16,374,000
13,250,000 12,163,000

(Appensix III)
EVA

3,587,473
3,672,586
3,364,553
2,805,169
2,921,003
2,177,081
2,927,013
2,046,438
1,584,688
2,604,354
2,439,243
2,520,384
1,633,785
1,991,244
1,789,287
1,463,347
187,534
410,894
464,191
590,293
447,913
441,828
1,317,749
64,484
1,269,750
1,049,319
445,279
1,208,250
204

MVA of Taiwwan Top 20 Chain and Franchise Store


(Period: 2004-2009)
Company
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2906 Collins
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin

year/M

Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

Stock value

56.75
58.91
71.99
85.76
93.82
78.65
17.04
14
17.04
26.33
23.99
22.9
16.26
17.98
17.04
28.3
34.4
27.82
10.97
10.31
9.98
11.39
10.58
8.19
23.12
26.5
27.31
27.76
26.59
23.57

Circuurrency

915
915
915
915
915
1,040
73
73
73
73
73
73
987
987
1,036
1,077
1,120
1,177
373
381
372
364
248
248
208
208
208
208
208
208

Equity

14,372,000
15,173,000
15,983,000
16,254,000
16,448,000
18,921,000
794,000
823,000
809,000
822,000
830,000
835,000
17,224
18,283
20,862
24,278
20,646
24,277
4,471,000
4,403,000
4,297,000
4,362,000
3,003,000
3,319,000
1,795,000
1,914,000
1,898,000
1,966,000
1,900,000
1,868,000

(Appendix IV)
MVA

37,554,250
38,729,650
49,887,850
62,216,400
69,397,300
62,875,000
449,920
199,000
434,920
1,100,090
921,270
836,700
16,031,396
17,727,977
17,632,578
30,454,822
38,507,354
32,719,863
379,190
474,890
584,440
216,040
379,160
1,287,880
3,013,960
3,598,000
3,782,480
3,808,080
3,630,720
3,034,560

205

MVA of Taiwwan Top 20 Chain and Franchise Store


(Period: 2004-2009)
Company
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2905 Mercuries
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2911 le Enphans
2911 le Enphans
2911 le Enphans
2911 le Enphans
2911 le Enphans
2911 le Enphans

year/M

Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

Stock value

12.76
13.01
14.88
24.48
24.32
36.62
55.4
51.97
50.67
51.4
51.19
56.54
12.64
8.57
8.2
17.75
15.36
13.07
19.18
22.3
20.71
20
17.96
15.57
12.87
17.17
22.8
26.7
21.36
26.06

Circuurrency

788
788
779
727
711
711
197
108
218
223
223
223
541
541
541
541
548
548
387
397
446
448
473
481
113
118
150
150
159
170

Equity

6,926,000
7,058,000
8,651,000
8,285,000
7,359,000
8,921,000
3,032,000
3,299,000
3,445,000
3,588,000
3,725,000
3,876,000
6,651,000
5,984,000
7,031,000
7,393,000
4,994,000
7,778,000
5,434,000
5,562,000
5,840,000
6,111,000
5,346,000
6,035,000
1,514,000
1,746,000
2,203,000
2,316,000
2,500,000
2,728,000

(Appendix IV)
MVA

3,128,880
3,193,880
2,940,520
9,511,960
9,932,520
17,115,820
7,881,800
2,313,760
7,601,060
7,874,200
7,690,370
8,732,420
187,240
1,347,630
2,594,800
2,209,750
3,423,280
615,640
1,988,660
3,291,100
3,396,660
2,849,000
3,149,080
1,454,170
59,690
280,060
1,217,000
1,689,000
896,240
1,702,200

206

MVA of Taiwwan Top 20 Chain and Franchise Store


(Period: 2004-2009)
Company
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake

year/M

Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

Stock value

25.4
25.28
23.75
22.49
27.17
23.11
20.55
23.11
27.73
29.68
28.45
30.99
8.69
9.53
13.5
33.38
35.37
32.8
7.26
5.35
5.18
10.24
8.02
11.96
18.5
18.2
20.95
22.1
6.4
17.85

Circuurrency

25
39
55
64.7
66
73
88
88
88
91
90.6
90.6
402
402
402
421
4433
471
294
294
294
294
294
294
90
93
131
147
169
174

Equity

407,000
662,000
902,000
1,107,000
1,190,000
1,284,000
1,112,000
1,112,000
1,144,000
1,195,000
1,216,000
1,319,000
4,687,000
5,164,000
5,976,000
8,191,000
8,703,000
9,487,000
2,370,000
2,609,000
2,696,000
2,419,000
2,488,000
2,853,000
1,332,000
1,661,000
1,897,000
2,163,000
2,113,000
1,934,000

(Appendix IV)
MVA

228,000
323,920
404,250
348,103
614,088
403,030
696,400
921,680
1,296,240
1,505,880
1,361,570
1,488,694
1,193,620
1,332,940
549,000
5,861,980
148,092,210
5,961,800
235,560
1,036,100
1,173,080
591,560
130,120
663,240
333,000
31,600
847,450
1,085,700
1,031,400
1,171,900

207

MVA of Taiwwan Top 20 Chain and Franchise Store


(Period: 2004-2009)
Company
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2430 Tsann Kuen
2347 Synnes
2347 Synnes
2347 Synnes
2347 Synnes
2347 Synnes
2347 Synnes
6281 E-Life
6281 E-Life
6281 E-Life
6281 E-Life
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo

year/M

Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09

Stock value

44.42
45.69
40.3
37.62
30.64
27.22
51.87
44.13
35.08
61.75
63.83
55.07
37.94
59.56
44.2
35.79
25.1
25.63
38.12
66.59
35.21
23.28
10.56
5.72
4.7
6.99
5.51
5.12

Circuurrency

221
128
321
246.6
246.6
242
745
1328
1204
1084
1022
920
128.4
130.3
132.2
99.2
61
66.8
68
72
73
80
1,340
1,340
876
876
876
876

Equity

6,066,000
6,146,000
3,633,000
5,939,000
6,276,000
2,622,000
19,443,000
21,622,000
23,147,000
26,590,000
27,803,000
31,923,000
2,395,000
2,507,000
2,478,000
2,090,000
899,000
949,000
1,090,000
1,232,000
1,076,000
1,203,000
1,369,000
9,889,000
1,940,000
4,472,000
7,703,000
7,748,000

(Appendix IV)
MVA

3,750,820
297,680
9,303,300
3,338,092
1,279,824
3,970,684
19,200,150
36,982,640
19,089,320
40,347,000
37,431,260
18,741,400
2,476,496
5,253,668
3,365,240
1,460,368
632,100
763,084
1,502,160
3,562,480
1,487,288
659,400
12,781,400
2,224,200
2,177,200
1,651,240
2,876,240
3,262,880
208

APPENDIX V
1. Have you being living in Taiwan for the past year?

Yes

No

No

2. Have you shopping in convenience stores in the past three months? Yes
3. A.

Age

B. Gender

Female

Male

C. Where do you purchase daily appliance?


Hypermarket

Department Store

D. Basket per purchasing?


NT$50-100

NT$100-200

CVS

NT300

Family Mart

NT$200-300

E. Which convenience store you prefer?


7-Eleven

Supermarket

High Life

4. Please state your reasons for choosing this store.


Please circle the appropriate number from 1-5 with 1 as STRONGLY DISAGREE
and 5 as STRONGLY AGREE
Strongly

Disagree

Neither

Agree

Strongly

Disagree
Disagree

Agree

nor Agree

1. Clear sing boards.

2. Variety of convenient service (ATM, copy

3. Clean and hygienic store.

4. Well presented display of products.

5. Wide selection of high quality brands and

machine..)

products.
6. Long opening hours.

209

7. Staff provides professional and friendly service.

8. Staff provides interesting promotion and new

9. Customer complaints management.

10. Ready to eat food and drink is of high quality.

11. Efficient and trustworthy checkout counters.

12. Will above service quality make you willing to

14. Pleasant store environment.

15. It made me feel delighted and happiness.

16. Appealing and interesting promotions.

17. Reasonably priced services and products

19. Have programs that reward regular purchase.

20. Provides stores private brands.

21. Convenient to get to.

product information.

pay a higher price to stores products or


services?
13. Will above service quality make you willing to
repeat purchasing stores products or services?

offered.
18. Has a membership system that offers great
rewards.

210

22. Always have products I want in stock.

23. Product and service is of high quality.

24. Has a good and reliable stores reputation and

27. My choice to shop in this store is a wise choice.

28. The overall shopping experience was better than

32. I am willing to repurchase from this store.

33. I will recommend it to someone who seeks my

image.
25. Will above perceived value make you willing to
pay a higher price to stores products or
services?
26. Will above perceived value quality make you
willing to repeat purchasing stores products or
services?

I expected.
29. The service and products were exactly what I
needed.
30. Will above customers satisfaction make you
willing to pay a higher price to stores products or
services?
31. Will above customers satisfaction make you
willing to pay a higher price to stores products or
services?

advice.

211

34. I am willing to buy new products and services

from this store.


35. When I want to go shopping in convenience
store, this store is my first choice.
36. I am willing to pay a higher price to purchase
service and products from this store than its
competitors.

212

Taiwan' Top 20 Chain and Franchise Stores


Brand Value
(Period: 2004-2009)
Company
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2912 7-Eleven
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2901 Shin Shin
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2903 Far Eastern
2906 Collins
2906 Collins
2906 Collins
2906 Collins

month/year
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07

PD
17,932,674
20,939,876
22,706,406
23,380,883
23,652,970
24,234,879
49,613
46,574
42,346
41,725
46,477
51,032
427,237
478,104
16,049
652,777
721,896
775,745
847,912
792,725
816,372
762,426

LD
0.8782
0.8785
0.8801
0.8940
0.9204
0.9745
0.8887
0.9316
0.9250
0.9046
0.9073
0.9452
0.9660
0.9685
0.9619
0.9353
0.9188
0.9191
0.8968
0.8553
0.7959
0.7386

ED
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1
1
2.75
1.08
1
1
1.57
1
1
1

PD/r(R=10%)
1,630,243,091
1,903,625,091
2,064,218,727
2,125,534,818
2,150,270,000
2,203,170,818
4,510,273
4,234,000
3,849,636
3,793,182
4,225,182
4,639,273
38,839,727
43,464,000
1,459,000
59,343,364
65,626,909
70,522,273
77,082,909
72,065,909
74,215,636
69,311,455

BV=PD/r*LD*ED
1,431,679,482
1,672,334,642
1,816,718,902
1,900,228,127
1,979,108,508
2,146,989,962
4,008,279
3,944,394
3,560,914
3,431,312
3,833,507
4,385,041
37,519,177
42,094,884
3,859,383
59,944,156
60,298,004
64,817,021
108,530,886
61,637,972
59,068,225
51,193,440

(Appendix VI)

BV
1,431,679,482
1,672,334,642
1,816,718,902
1,900,228,127
1,979,108,508
2,146,989,962
4,008,279
3,944,394
3,560,914
3,431,312
3,833,507
4,385,041
37,519,177
42,094,884
3,859,383
59,944,156
60,298,004
64,817,021
108,530,886
61,637,972
59,068,225
51,193,440
213

Taiwan' Top 20 Chain and Franchise Stores


Brand Value
(Period: 2004-2009)
2906 Collins
2906 Collins
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2910 Tonlin
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
2915 Ruentex
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
5903 Family Mart
2905 Mercuries
2905 Mercuries
2905 Mercuries

Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06

714,209
703,272
106,816
512,143
466,169
453,434
410,083
382,948
1,098,250
802,955
611,725
646,722
650,876
534,040
4,584,595
5,546,829
6,759,762
7,455,737
8,477,888
8,759,608
2,112,735
2,188,081
2,282,958

0.7092
0.7008
0.9437
0.9695
0.9631
0.9530
0.9218
0.9120
0.4974
0.6193
0.7703
0.7662
0.9029
0.9390
0.6520
0.7125
0.8812
0.8984
0.8895
0.8924
0.9449
0.9635
0.9733

1.46
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1

64,928,091
63,933,818
9,710,545
46,558,455
42,379,000
41,221,273
37,280,273
34,813,455
99,840,909
72,995,909
55,611,364
58,792,909
59,170,545
48,549,091
416,781,364
504,257,182
614,523,818
677,794,273
770,717,091
796,328,000
192,066,818
198,916,455
207,541,636

(Appendix VI)

67,228,623
44,804,820
9,163,842
45,138,422
40,815,215
39,283,873
34,364,955
31,749,871
49,660,868
45,206,367
42,837,433
45,047,127
53,425,085
45,587,596
271,741,449
359,283,242
541,518,389
608,930,375
685,552,852
710,643,107
181,483,937
191,656,004
202,000,275

67,228,623
44,804,820
9,163,842
45,138,422
40,815,215
39,283,873
34,364,955
31,749,871
49,660,868
45,206,367
42,837,433
45,047,127
53,425,085
45,587,596
271,741,449
359,283,242
541,518,389
608,930,375
685,552,852
710,643,107
181,483,937
191,656,004
201,000,275
214

Taiwan' Top 20 Chain and Franchise Stores


Brand Value
(Period: 2004-2009)
2905 Mercuries
2905 Mercuries
2905 Mercuries
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2908 Test Rite
2911 les Enphan
2911 les Enphan
2911 les Enphan
2911 les Enphan
2911 les Enphan
2911 les Enphan
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
5904 Poya
1233 Ten Ren
1233 Ten Ren

Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05

2,460,044
2,398,104
1,990,536
1,748,239
1,760,672
1,623,003
1,518,246
1,384,811
1,146,212
587,653
726,007
819,576
861,103
893,833
874,204
480,463
564,934
662,486
816,686
957,631
1,098,034
595,143
353,183

0.9666
0.9619
0.9340
0.8214
0.8851
0.9462
0.9369
0.8978
0.8186
0.9002
0.9334
0.9273
0.9255
0.9466
0.9682
0.8324
0.8538
0.8662
0.8621
0.8135
0.7885
0.5345
0.6096

1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1

223,640,364
218,009,455
180,957,818
158,930,818
160,061,091
147,545,727
138,022,364
125,891,909
104,201,091
53,423,000
66,000,636
74,506,909
78,282,091
81,257,545
79,473,091
43,678,455
51,357,636
60,226,000
74,244,182
87,057,364
99,821,273
54,103,909
32,107,545

(Appendix VI)

216,170,775
209,703,294
169,014,602
130,545,774
141,670,072
139,607,767
129,313,152
113,025,756
85,299,013
48,091,385
61,604,994
69,090,257
72,450,075
76,918,393
76,945,847
36,357,946
43,849,150
52,167,761
64,005,909
70,821,165
78,709,074
28,918,539
19,572,760

216,170,775
109,703,294
169,014,602
130,545,774
141,670,072
139,607,767
129,313,152
113,025,756
85,299,013
48,091,385
611,604,994
69,090,257
72,450,075
76,918,393
76,945,847
36,357,946
43,849,150
52,167,761
64,005,909
70,821,165
78,709,074
28,918,539
19,572,760
215

Taiwan' Top 20 Chain and Franchise Stores


Brand Value
(Period: 2004-2009)
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1233 Ten Ren
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1210 Greatwall
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
1702 Nan Chow
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
5905 Nan Ren Lake
2430 Tsann Tuen

Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04

334,088
518,668
674,239
835,935
4,027
4,775
4,320
4,831
5,831
5,874
277,040
280,254
248,512
263,678
284,620
283,999
325,331
364,075
326,592
260,155
153,174
84,975
6,627

0.6842
0.6303
0.6187
0.9815
0.8869
0.9179
0.9396
0.9293
0.8170
0.8208
0.9375
0.9154
0.9342
0.9270
0.8971
0.8941
0.5597
0.4706
0.5407
0.6908
0.8414
0.7729
0.4767

1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1

30,371,636
47,151,636
61,294,455
75,994,091
366,091
434,091
392,727
439,182
530,091
534,000
25,185,455
25,477,636
22,592,000
23,970,727
25,874,545
25,818,091
29,575,545
33,097,727
29,690,182
23,650,455
13,924,909
7,725,000
602,455

(Appendix VI)

20,780,274
29,719,676
37,922,879
74,588,200
324,686
398,452
369,007
408,132
433,084
438,307
23,611,364
23,322,228
21,105,446
22,220,864
23,212,055
23,083,955
16,553,433
15,575,790
16,053,481
16,337,734
11,716,419
5,970,653
287,190

20,780,274
29,719,676
37,922,879
74,588,200
324,686
398,452
369,007
408,132
433,084
438,307
23,611,364
23,322,228
21,105,446
22,220,864
23,212,055
23,083,955
16,553,433
15,575,790
16,053,481
16,337,734
11,716,419
5,970,653
287,190
216

Taiwan' Top 20 Chain and Franchise Stores


Brand Value
(Period: 2004-2009)
2430 Tsann Tuen
2430 Tsann Tuen
2430 Tsann Tuen
2430 Tsann Tuen
2430 Tsann Tuen
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
2347 Synnex
6281 E-life
6281 E-life
6281 E-life
6281 E-life
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
6154 Sunfar
1604 Sampo
1604 Sampo

Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-04
Dec-05

698,141
1,254,689
2,052,869
2,492,914
2,699,832
16,207,664
11,875,931
7,624,955
4,763,204
2,104,801
130,763
3,682,574
3,504,717
2,598,949
1,884,949
934,194
844,503
637,886
566,027
473,578
427,356
2,019,855
1,247,583

0.5993
0.7437
0.8830
0.9518
0.9347
0.8574
0.8880
0.9164
0.9017
0.9048
0.8999
0.7778
0.8442
0.9046
0.9219
0.7228
0.8293
0.9205
0.9448
0.9214
0.9193
0.8025
0.8171

1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1

63,467,364
114,062,636
186,624,455
226,628,545
245,439,273
1,473,424,000
1,079,630,091
693,177,727
433,018,545
191,345,545
11,887,545
334,779,455
318,610,636
236,268,091
171,359,000
84,926,727
76,773,000
57,989,636
51,457,000
43,052,545
38,850,545
183,623,182
113,416,636

(Appendix VI)

38,035,991
84,828,383
164,789,393
215,705,050
229,412,088
1,263,313,738
958,711,521
635,228,069
390,452,822
173,129,450
10,697,602
260,391,460
268,971,099
213,728,115
157,975,862
61,385,038
63,667,849
53,379,460
48,616,574
39,668,615
35,715,306
147,357,603
92,672,734

38,035,991
84,828,383
164,789,393
214,705,050
229,412,088
1,263,313,738
958,711,521
635,228,069
390,452,822
173,129,450
10,697,602
260,391,460
268,971,099
213,728,115
157,975,862
61,385,038
63,667,849
53,379,460
48,616,574
39,668,615
35,715,306
147,357,603
92,672,734
217

Taiwan' Top 20 Chain and Franchise Stores


Brand Value
(Period: 2004-2009)
1604 Sampo
1604 Sampo
1604 Sampo
1604 Sampo

Dec-06
Dec-07
Dec-08
Dec-09

1,024,467
726,836
681,337
749,003

0.8476
0.7906
0.7377
0.7079

1
1
1
1

93,133,364
66,076,000
61,939,727
68,091,182

(Appendix VI)

78,939,839
52,239,686
45,692,937
48,201,748

78,939,839
52,239,686
45,692,937
48,201,748

218

Вам также может понравиться