Investigating relationship among

various factors of Brand Equity: A

Study on fast food brand

MBM 531 :Dissertation -1

Supervisor : Submitted By:

Dr. Abhinav Pandey Rahul Chauhan
Faculty of Social Sciences MBA Regular
DEI , Agra. Roll No. 167640

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 CERTIFICATE

It is certified that Mr. RAHUL CHAUHAN MBA (Regular) Student

of Dayalbagh Educational Institute, Dayalbagh, Agra has
completed his dissertation under my supervision during the
semester Jan-2018 to May-2018. His dissertation entitled “
Investigating relationship among various factors of brand
equity: A study on fast food brand” which he is submitting
genuinely as his own original work and fit for submission.

Date: / / (Dr. Abhinav Pandey)

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 DECLARATION

I hereby declare that the dissertation entitled “ Investigating

relationship among various factors of brand equity: A study on
fast food brand” is my

original piece of work carried out under the guidance and supervision of Dr.

Abhinav Pandey, Faculty of Social Sciences, Dayalbagh Educational Institute

(Deemed University), Dayalbagh, Agra. No Part of this research work has been
published by any other University or Institute for any purpose whatsoever
concerned.

Date: / / (Rahul Chauhan)

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 ACKNOWLEDGEMENT

I owe deep feelings of my humble gratitude to the almightily who has enabled me to
complete this dissertation .

I feel great pleasure to acknowledge my deep indebtedness to my esteemed

supervisor, Dr. Abhinav Pandey, Faculty of Social Sciences, DEI for his kind
guidance and motivation throughout this dissertation. It is no exaggeration to say
that I would not have brought-out this project without his personal encouragement
and unstinted co-operation. His diligence and dedication led my work towards the
gateway of success.

I express my sincere thanks to my beloved family members for their kind assistance
with intrinsic inspiration, affection and moral support without which task is impossible
to be completed. At last but not least, I would like to extend my co-ordial thanks to
all my well-wisher and all those who helped me directly or indirectly during the
preparation of this dissertation.

(Rahul Chauhan)

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 CONTENT

CHAPTERS PARTICULARS PAGE NO.

KChapter -1 Introduction
6-8

1.1.0 Introduction
1.2.0 Objectives of the study

Chapter -2 Literature Review

8-11

2.1.0 Customer based brand equity

References

Chapter-1
Introduction

1.1.0 Introduction
Food diversity in India is an implicit characteristic of India’s diversified
culture consisting of different regions and states within. Traditionally,
Indians like to have home-cooked meals—a concept supported religiously by
individuals. However, with the passage of time, there has been increasing
awareness and influence of Western culture, which has made a paradigm shift in
food consumption patterns among urban Indian families. It started with eating
outside and moved on to accepting a wide variety of delicacies from world over.
This phenomenon has been witnessed since the early 1990s. The subsequent entry
of new players set a significant change in lifestyles and the food tastes of
Indians. The emergence of fast food has gained acceptance of Indian palate
after the multinational fast-food players adapted the basic Indian food
requirements. Fast-food restaurants are highly disposed to building strong
brand names because of their services and the quality of foods served to
customers. The fast-food players have been trying to achieve sustainable
competitive advantage over their competitors in India as they identify India as
a good market owing to the rising disposable incomes of customers and
favourable demographics. Eating out in India has evolved from an occasion-
driven activity to an everyday activity. With the rising number of nuclear
families, exposure to global trends, the increasing number of employed women
and an increase in the number of dual-income households, the concept of eating
out has been strongly supported. Coupled with these factors, international
chains entering India offered a wide variety of options to individuals.
Multinationals launching value for money offerings also helped fuel growth.
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Companies are enhancing their reach to small and medium-sized cities to drive
sales. The Indian fast-food market has been witnessing rapid growth due to
positive developments and presence of massive investments. Currently, market
growth is largely fuelled by the rising young population, working women, hectic
schedules and increasing disposable income of the middle-class households. Some
of the unique properties of fast food, such as quickly served and cost
advantage, are making it highly popular among the masses. Thus, India offers
enormous opportunities for both domestic and international players. The Indian
fast-food industry was anticipated to grow at a compound annual growth rate
(CAGR) of around 34 per cent during 2011–2014 (Anand, 2011). Anticipating such
a growth, many big international players entered into the market by making
deals with domestic players. And those already present in the Indian market
expanded their presence in different provinces of the country. This trend
emerged more strongly during the expansion period, providing opportunities to
local players to widen their product portfolios and creating brand equity with
customers.

A major weapon of building sustainable competitive advantage and creating a

differential advantage is through brand equity (Neal, 2000). The other
differential tool is price which often results in price war, reduced loyalty
and revenue (Siguaw, Mattila& Austin, 1999). The issue of brand equity has
emerged as one of the most crucial topics for marketing management since the
1990s. There are different perspectives for brand equity: the customer-based
perspective, the financial perspective and the non-financial perspective. The
present study focuses on customer-based brand equity which refers to the
measurement of cognitive and behavioural brand equity at the individual through
a consumer survey. In recent years, customer-based brand equity has gained
significant attention in the field of academics and industries. Customer-based
brand equity usually concentrates on two distinct aspects: consumer perception
and consumer behaviour. According to Mahajan, Rao and Srivastava (1994),
customer-based brand equity can be measured by the level of consumer’s
perception, while Farquhar et al. (1990) identified that brand equity can be
reflected by the change of consumer attitude while purchasing a product.
Besides using these two approaches, that is, consumer perception and consumer
attitude, some researchers tried to combine and link them with other variables
as antecedents and consequences of brand equity.

Considering its comprehensiveness, Aaker ( 1991, 1996a) introduced

the concept of brand equity by establishing the four -dimensional
model of consumer-based brand equity; these dimensionalities
subsequently have been tested by some of the researchers to
validate their acceptability (Atilgan et al. 2005; Cobb-Walgren,
Ruble &Donthu, 1995; Kim & Kim, 2004; Pappu et al., 2005;
Washburn & Plank, 2002; Yoo&Donthu, 2001). Consistent with
Aaker’s concept, Cobb-Walgren et al. (1995) and Pappu et al.
(2005) propagated four dimensions of brand equity, whereas Yoo
and Donthu (2001) and Washburn and Plank (2002) identified only
three dimensions of brand equity taking the cognizance of Aaker’s
invention. Previous studies were tested and found to have
associative relationship among different dimensions of brand
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equity. Despite the fact that numerous local and global product
categories have been employed to measure the brand equity,
literature on brand equity within the hospitality industry is
very limited (e.g., Kim and Kim [2005] conducted a study on
luxury hotel and chain restaurant; Atilga n et al. [2005] analyzed
the beverage industry; and Pappuet al. [2005] conducted a study
on car brands

and television brands). The present article tries to test the

direct and indirect relationship existing among various
dimensions of brand equity in the fast-food industry. With this
backdrop, the present article is structured into six sections.
The first section introduces the concept of brand equity relevant
for fast-food industry, followed by the second section with
related literature review. The third section deals with the
objective of the study supported by the relevance of undertaking
such a study. The fourth section discusses the relationship
existing among different brand equity measures. The fifth section
analyzes the result and the sixth section concludes the study.

1.2.0 Objectives of the Study

The main objective of the present study is to identify the relationship that
exists among the various constructs of brand equity with special reference to
Indian fast-food brands. Strong brand equity has become a very important factor
that influences consumers’ perception of a brand. The $13 billion branded fast-
food market in India is gradually expanding and has been attracting
international brands. Under such a scenario, measurements of brand equity for
any brand from the customers’ perspective are of paramount importance. Success
in brand management arises from understanding and managing brand equity to
produce strong attributes that will influence consumers when making their
choices. The present study focuses on the importance of these constructs (i.e.,
BAW, BA, BL and PQ) of fast-food brands in India. This is based on the
assumption that all these constructs of brand equity will have some
relationship while studying the fast-food restaurant brands.

CHAPTER - 2 BRAND EQUITY LITERATURE REVIEW

Introduction

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 Some of the world’s most trusted brands have been around for over 150 years. These brands
that have won consumer hearts forover a hundred years (and have yielded rich profits for
their parent companies) include Quaker Oats, Ivory,Listerine, Coca Cola, Pepsi and Levis. In
India too, brands such as Godrej, Tata and Kingfisher are over a century old. The parent
companies of these brands have nurtured and built on the equity of these brands over these
years, in spite of the fact that the term ‘brand equity’ didn’t exist until 1980. Brand Equity first
appeared in academic literature in the 1980’s,although it has existed in practice and its
importance has been realized by practitioners for long. Till the 1970s, researchers were
interested in the total combined effect of the brand and product and they did not distinguish
the impact of the brand from that of the product. Srinivasan’s (1979) was the first study that
demonstrated the individual added value of the brand to the product. The Marketing Science
Institute sponsored research in this area and subsequently in the 1980s the term brand equity
was used to refer to this incremental value add that the brand name conferred onto the
product. Its importance has been recognized for over a century and only attempts to define,
dimensionalise and measure it have happened since the late 1980s.”.

What is Brand Equity

It is defined as a set of assets and liabilities linked to the brand, which add value to or
subtract value from a product in its relationship with customers (Aaker, 1991). Aaker
identifies that the value of brand equity is a composition of five brand equity assets,
namely, brand loyalty (BL), brand awareness (BAW), perceived quality (PQ), brand
associations (BA) and other proprietary brand assets, in which PQ and BA are the two most
significant ones. All these brand equity assets can bring value for the business and
customers. From the viewpoint of Aaker, it has been observed that brand equity can bring
value for both customer and manufacturer, and the customer value from brand equity is
the base to create value for the manufacturer. In the five assets model, the other
proprietary brand assets, namely, patent, trademark and distributors, are harder to be
measured from the customer’s perspective. In such a case, PQ, BL, BAW and BA are
considered to be the most significant variables influencing brand equity. This observation is
based on the findings of the seminal works carried out by Aaker (1991), Keller (1993) and
subsequently these four variables have been considered as the true identification of brand
equity. Rust & Oliver (2000) considered brand equity to be ‘the customer’s subjective and
intangible assessment of the brand, above and beyond its objectively-perceived value’.
Keller (1993), finally, defined brand equity as ‘the differential effect of brand knowledge
(consisting of awareness and image) on consumer response to the marketing of the brand’.
The issue of brand equity has emerged as one of the most crucial topics for marketing
management since the 1990s (Aaker, 1996a; Cobb-Walgren et al., 1995; Dyson, Farr &
Hollis, 1996; Esch, Langner, Schmitt &Geus, 2006; Keller, 1993; Lassar, Mittal & Sharma,
1995; Leuthesser, 1988; Villarejo-Ramos & Sánchez-Franco 2005). Brand equity has been
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considered in many contexts: as value added to the product (Aaker, 1991, 1996; Farquhar,
1990; Jones, 1986; Kapferer, 1994; Keller, 1993, 2001; Leuthesser, 1988); as value of the
firm (Aaker, 1991; Kim & Kim, 2005); as value of the customer (Aaker, 1991); as brand
preference and purchase intention (Cobb-Walgren et al. 1995; Zeithaml, 1988); as BL, BAW,
PQ and BA (Aaker, 1991; Atilgan et al., 2005; Keller, 1993; Pappu et al., 2005); as differential
effect of brand knowledge of consumer response to the marketing of brand (Keller, 1993);
as incremental utility (Simon & Sullivan, 1993); and as an outcome of marketing efforts
(Villarejo-Ramos & Sánchez-Franco, 2005). The available literature also reveals that brand
equity provides value for both the customers and the firm. Brand equity creates value to
customers by enhancing efficient information processing and shopping, building confidence
in decision-making, reinforcing buying and contributing to self-esteem. It creates value to
firms by increasing marketing efficiency and effectiveness, building BL, improving profit
margins, gaining leverage over retailers and achieving uniqueness over the competition
(Bagozzi, Rosa, Celly& Coronel, 1998, p. 320). Apart from the customer-based perspective,
there have been two more different perspectives for considering brand equity, namely, the
financial perspective and non-financial perspective. However, the present study takes the
cognizance of only customer-based perspective of measuring brandequity as this
perspective is assumed to have significant bearing on the fast-food brands.

Benefits of Brand Equity

Why is brand equity so important? Researchers have been able to show that the brand
equity of a product affects consumer preferences and purchase intention (CobbWalgren et
al. 1995), market share (Agarwal &Rao 1996), long-term cash flows and future profits
(Srivastava& Shocker 1991), consumer perceptions of product quality (Dodds et al. 1991),
stock prices (Simon & Sullivan 1993), mergers and acquisitions (Mahajan et al. 1994),
creates sustainable competitive advantage (Bharadwaj et al. 1993) and resilience to
product-harm crisis (Dawar & Pilltula 2000). Brands with high brand equity enjoy high
consumer preference, purchase intention, purchase, loyalty, and even higher stock returns
(Cobb-Walgren et al 1995, Aaker& Jacobson 1994). Almost every single marketing activity
works to create, manage and exploit brand equity. Also from a consumers point of view, a
brand with high equity increases the credibility of the information provided for/with the
product, reduces the perceived risk, reduces the consumers need to think and overall
enhances the consumers utility from the product/ brand (Erdem&Swait 1998).

Two types of Brand Equity – FBBE & CBBE.

Till the early 1990’s there were varied definitions of brand equity essentially because all
academic thinkers were looking at one all-encompassing definition of brand 70 equity. All
of this early research was conceptual research. By 1993, there emerged consensus that
there are at two different types of brand equity: a) a financial aspect of brand equity (called
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Firm Based Brand Equity) and b) a consumer behavior based brand equity (called Customer
Based Brand Equity) which was considered the basis for firm based brand equity. Feldwick
(1996) states that the term brand equity means different things to different people-
consumers, channel partners and companies.He identified three types of brand equity:

a) Financial value of a brand which is the total value a brand provides as a separable asset
and is used for the purposes of accounting (and financial reporting) and to buy or sell the
brand;

b) The attachment that a consumer has to a brand (something akin to brand attachment
and leading to brand loyalty). This is termed as brand strength. c) The set of associations
and beliefs that the consumer has for the brand (referred to as brand image by Keller
(1993) but termed brand description by Feldwick (1996)). Brand value (total financial value)
is a conceptualization of brand equity held by accountants whilst the other two
conceptualizations (brand strength and description) are those of marketers. These two are
measures of consumer based brand equity.

A) Firm Based Brand Equity (FBBE) - this represents the financial value that the brand
creates for the organization. FBBE consists of that part of brand equity that results in
benefits to the company like an increased market share, the premium that the brand earns
(over unbranded alternatives), the ability of the brand to sustain competition, imitation,
and endure crisis. The quantification of FBBE in monetary terms is the brand valuation and
this 71 forms the basis of deciding the price for buying & selling of brands and for reporting
brand values as part of financial reporting. Most FBBE definitions stress on the financial
value of the brand to the firm (Shocker &Weitz 1988,Mahajan et al 1994, Simon & Sullivan
1993). FBBE is defined as the incremental cash flows that accrue to a brand over an
unbranded version of the same offering (Simon and Sullivan 1993).Srinivasan et al 2001
define FBBE “as the incremental profit per time period obtained by the brand in
comparison to a brand with the same product and price but with minimal brand-building
efforts”. In essence it means that it is the comparison of the financial value that results
from a product having its brand name in comparison with the financial value that would
accrue if the same product did not have that brand name. Brand valuation methods
basically report the quantified FBBE and there are various proprietary methods such as
Interbrand, Futurebrand, Brand Rating, Millward Brown. Firms are not the only recipients of
brand value ,the main recipients of brand value are its consumers.

B) Consumer Based Brand Equity (CBBE) – is brand equity from the point of view of the
equity that the brand has with its consumers (it includes the awareness consumers have of
the brand, the perceived quality premium they attach to the brand, the variety of
associations they have for the brand in their minds, their emotional connect, the loyalty
they have for the brand and variety of other such measures). CBBE is defined as the
differential effect of brand knowledge on the consumer’s response to the marketing mix of
the brand (Keller 1993). Several researchers have conceptualized CBBE similar to Keller
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(Aaker 1991, Kamakura & Russell 1993, Cobb-Walgren et al 1995,Sinha &Pappu 1998,
Yoo&Donthu 2001, Washburn & Plank 2002). Mackay et al (1997)who stated that CBBE
refers to “the added value of the brand to the consumer”. This study is concerned with the
conceptualization, identification of dimensions and measurement of Consumer Based
Brand Equity and henceforth in the rest of the thesis, the term Brand Equity will refer only
to Consumer Based Brand Equity (CBBE) and will not include FBBE.

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Srivastava and Shocker (1991)

Srivastava& Shocker (1991) conceptualized brand equity to be composed of two dimensions:

Brand strength and Brand Value. Brand strength consists of consumer perceptions and their
behaviors with respect to the brand (choice intention or choice). It can be operationalized as
the set of associations that consumer has for the brand. Brand value on the other hand is the
ability of the firm to leverage brand strengths (through marketing strategy and actions) to
generate higher current and future profits and lower risks. For example, the brand strengths
(associations) can be leveraged by extending the brand to other products wherein these
associations will add value.

Kevin Lane Keller (1993)

Keller 1993 defined CBBE as ‘the differential effect of brand knowledge on consumer
response to the marketing of the brand’. Keller states that the conceptualization of brand
equity varies with the purpose of brand equity. He conceptualized brand equity for the
purpose of developing marketing strategy to improve productivity of the marketing efforts for
the brand. The reaction or impact of a firm’s marketing effort depends on the knowledge the
consumer has of the brand. Keller conceptualized brand equity using an associative memory

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network model and equates brand equity to the knowledge that the consumer has of the
brand He alsodistinguishes two components of brand knowledge: a) Brand Awareness- The
extent to which a consumer can recognize or recall the brand name and identify it with a
product /service and/or a product category. b) Brand Image-The entire set of brand
associations the consumer has for the brand. He identifies three categories of associationi)
Attributes ii) Benefits and iii) Attitudes The strength of brand’s equity also depends on the
strength of the association with the brand (for example: whilst Bajaj Pulsar and Royal Enfield
Bullet are both associated with masculinity & toughness, the masculinity & toughness
association is much stronger for Bullet as compared to Pulsar), the favorability of the
association (example: ‘youth’ is a favorable association for Pepsi but ‘contains pesticide’ is a
unfavorable association for Pepsi) and the uniqueness of these associations (all bathing/ toilet
soaps have ‘cleansing’ and ‘lathering’ as a common association, but only Dove has
‘moisturizing soap’ as a unique brand association that is not shared by other brands of soap).

The areas of brand equity and fast-food brands remain under-researched despite a growing
number of studies undertaken in most of the Western countries in recent years. While
measuring the brand equity, Muller and Woods (1994) are of the opinion that the
importance of fast-food brands is always superior to that of a product brand. Basically,
brand equity subsumed to brand value and brand strength (Srivastava& Shocker, 1991)
where it could be classified into two measurement perspectives, namely, financial (brand
value)-based measurement and customer-based (brand strength) brand equity
measurement. From the financial perspective, brand equity is sometimes addressed with a
firm-level approach or from a company-oriented perspective (Feldwick, 1996). On the other
hand, customer-based brand equity reflects customer perceived value, which is usually
formed by the combination of a product’s functional performance, emotional benefits and
consumer’s lifestyle. In this article, the interrelationship among various dimensions of
customer-based brand equity, namely, BA, BL, PQ and BAW, in fast-food brands has been
discussed and measured in the Indian context

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