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A STUDY TO INDICATE THE IMPORTANCE OF CONSUMER
BASED-BRAND EQUITY ON CONSUMER PERCEPTION OF
BRAND
(A CASE STUDY OF FAST FOOD RESTAURANTS)
Master Thesis in Business Administration
Priscillia Ukpebor & Bibiana Ipogah
pri sciIIiaukpebor()va1ioo.corn bipogah(i)vahoo.com
SUPERV I SORS
Britt Aronsson
&
Martin Svensson
RONNEBY 2008

ACKNOWLEDGEMENT
We give thanks to God almighty for giving us the understanding, knowledge and wisdom
during the course of our study.
Special thanks go to our supervisors, Britt Aronsson and Martin Svensson for their support and
guidance during our thesis work.
We will also want to thank our program manager Anders Nilsson and our course adviser Melissa
Engelke for their invaluable help and support during the course of our study. And lastly, we will
want to thank our family members and friends who have been of help to us.
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ABSTRACT
Strong brand equity has become a very important factor that influences consumer’s perceptions
of a brand. Success in brand management arises from understanding and managing brand equity
correctly to produce strong attributes that will influence consumers when making their choices.
This thesis focuses on the importance of these dimensions (brand awareness, brand loyalty,
brand image and perceived quality) of customer-based brand equity on consumer’s perceptions
of a brand. This is based on the assumption that all these dimensions of customer based-brand
equity will have influence on consumer’s perceptions of brand. However, this thesis aims to find
out which among these three dimensions (brand image, brand loyalty and perceived quality)
appear to have the least brand equity in both restaurants and to find out if customer based-brand
equity differ between the two restaurants with respect to each attribute of brand awareness, brand
image, perceived quality and brand loyalty. Brand awareness was treated separately from other
dimensions because of the difference in scale.
A structured questionnaire was constructed to provide answers to our research question. In this
study, one hundred questionnaires were distributed, but only sixty four useable questionnaires
were realized. The study surveyed four dimensions of consumer’s basedb rand equity namely
brand awareness, brand image, perceived quality and brand loyalty. Among the three
dimensions, brand loyalty appears to have the least brand equity rating by consumers than the
other dimensions. Although, the four dimension appear to have influence on consumer
perceptions of brand.
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TABLE OF CONTENT

ACKNOWLEDGEMENT .2 .

ABSTRACT 3

TABLE OF CONTENT 4

CHAPTER 1: INTRODUCTION 7

1.1 BACKGROUND 7

1.2 FAST FOOD RESTAURANT 9

1.3 PROBLEM STATEMENT 10

1.4 RESEARCH PURPOSE 11

1.5 DEFINITION OF KEY WORDS 11

1.6ORGANISATIONOFTHESTUDY 13

CHAPTER 2: THEORITICAL FRAME WORK

14
-..—-—-

2.1 CONSUMER PERCEPTION AND BEHAVIOUR 14

2.1.1 Consumer behaviour 14

2.1.2 Consumers buying behaviour 15

2, 1.3 Factors influencing consumer perceptions of a brand 18

2.2 BRAND 20

2.2.1 Brand 20

2.2.1.1 Benefit ofa strong brand 22

2.2.2 Brand equity 23

2.2.3 Conceptualization of consumer based- brand equity 24

2.3.4 Brand equity in service industry 25

2.3 CONCEPTUAL DOMAIN OF CONSUMERS -BASED BRAND EQUITY.......27

2.3.1 Brand awareness 27

2.3.1.1 Achieving brand awareness 29

2.3.2 Brand image 30

2.3.3 Perceived quality 31

2.3.4 Brand loyalty 31

CHAPTER 3: METHODOLOGY 34

3.1 RESEARCH DESIGN 34

3.2 RESEARCH APPROACH 35

3.3 DATA COLLECTION .35 ..

3.4 DATA SOURCES 36

3.5RELIABILITYANDVALIDITY 38 ..

3,5.1 Reliability 38

3.5.2 Validity 39

3.6 OUESTIONNAIRE CONSTRUCTS 41

3.7 FOCUS GROUP 42

3.8 SAMPLING PROCEDURE 42

3.9 PRE-TEST STUDY 43

3.10 LIMITATION OF STUDY 44

4.1 CASE STUDY OVERVIEW 45

4. 1. 1 Max hamburger 45

4.1.2 MacDonald 46

CHAPTER 5: CONCLUSION, RECOMMENDATION AND FUTURE RESEARCH..61

5.1 CONCULSION 61
5.1.1 Which Among These Three Dimensions of Customer Based-Brand Equi (Brand
Image. Brand Loyalty and Perceived Ouality) Appears To Have the Least Brand Equity
Rating” 62
5. 1.2 Does Customer Based-Brand Equity Differ Between The Two Restaurants With
Respect To Each Attribute Of Brand Awareness. Brand Image. Perceived Quality And

TABLE OF FIGURE
88 1
Figure 1: buying decision process, Source: Kotler et al (1999) pg.254 16
Table 1: fourtype of buyer’s behaviour, source: Kotleret al (1999) p.251 17
Table 2: demographical sample 47
Table 3: top-of-mind brand recall 48
Table 4: brand recognition 49
Table 5: Mean difference of perceived quality between McDonald and max hamburger.
50
Table 6: Mean difference of brand image between McDonald and Max hamburger 52
Table 7: Mean difference of brand loyalty between McDonald and max hamburger 53
Table 8: Over all mean value for each dimension 54
Table 9: demographical sample for incomplete questionnaires 55
Table 1 0: top-of-mind brand recall 55
Table 11: brand recognition 56
Table 12: Mean difference of perceived quality between McDonald and max hamburger
57
Table 13: Mean difference of brand image between McDonald and max hamburger 58
Table 14: Mean difference of brand loyalty between McDonald and max hamburger 60
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4.2 CHARACTERISTICS OF RESPONDENTS 46

4.3 CUSTOMER BASED BRAND EQUITY RATING 48

43.1 Brand awareness 48

4.3.2. Perceived quality 49

4.3.4 Brand loyalty 52

4.4 INCOMPLETE QUESTIONNAIRES... 54

4.4.1 CL-IARACTERISTICSOFRESPONDEMS 54

4.4.2 CUSTOMER BASED BRAND EQUITY R \ II 55

4.4.2. 1 Brand awareness 55

4.4.2.2 Perceived quality 56

4.2.2.3 Brand image 57

4.4.2.4 Brand loyalty 58

4.4.3 Comparison between Complete and Incomplete

Ouestionnaires 60

Brand Loyalty” 63

5.2 RECOMMENDATION .
65

5,3 FUTURE RESEARCH ...

68

REFERENCE 69

APPENDIX 1: COVER LETTER 76

77

APPENDIX 11: OUESTIONAIRES APPENDIX ill: 78

ANAYSIS
 82

Table 15: Over all mean value for each dimension 60

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CHAPTER 1: INTRODUCTION
ihis chapter of the thesis presents a brief discussi on oft/ic background, followed by
prhlem discussion, research purpose, research question and lastly disposition of the thesis.
1.1 BACKGROUND
Due to the rapid changes in the global market and the increased competition experienced
between firms, “Brand Management” has become more important. Good brand management
brings about clear differentiation between products, ensures consumer loyalty and preferences
and may lead to a greater market share.
Aaker (1991) is of the view that establishing and managing brand should not be taken to be the
core operating target for most industries but should also be seen as a source of
competitiveness. In other words, value is added to a brand when the brand is able to compete
successfully with other brands.
Many researchers (Aaker 1991&l996, Keller 1993, Lasser 1995, Yoo & Donthun 2001, Prasad &
Dev. 2000 etc) have been interested in the concept and measurement of brand equity because
of the necessity in today’s marketplace to develop, maintain and use product branding to
acquire a certain level of competitive advantage. According to Ailawadi et al., (2003, p. 1), this
has led to various points of view on brand equity dimensions, the factors that effect it, the
perspective from which it should be studied as well as how to measure it.
Brands are highly regarded as an important source of capital for most business. The term brand
has different meaning attached to it; a brand can be defined as a name, logo, symbol and
identity or a trademark. Prasad and Dev. (2000) also states that a brand can be seen to include
all tangible and intangible attributes that a business stands for.
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Despite the fact that lots of global and local brands of different products have been used to
measure brand equity, survey on brand equity in the service industry have not been fully
explored. Prasad and Dev. (2000) presented a study that shows that the easiest method for hotels
to recognize and distinguish themselves in the mind of their customers is through branding. Low
and Lamb Jr (2000) also stated that in service market, the main brand is the firm’s brand while in
packaged goods market, the main brand is seen to be the product brand.
A powerful brand will enhance a customer’s attitude strength of the product association of a
brand. Attitude strength is developed by experience with the product. According to Keller
(1993), customer awareness and association influences inferred attributes, perceived quality and
finally result to brand loyalty. He went further to say that the advantage of this dimensionality of
customer-based brand equity is that it allows marketing managers to study how their marketing
programs enhance their brand values in the minds of customers.
Brand name and what a brand stands for are the core values for most fast food restaurant. If
properly managed, it will increase the competitive advantage of the fast food restaurant. The
basic attribute of a fast food restaurant are also important for a fast food restaurant to excel
because the strength of a brand commonly provide the fundamental steps for differentiating
between several competitors. Majority of the fast food restaurants have distinguishable brand
identifiers, for example McDonald golden arches is easily recognized by customers.
A strong brand allows customers to have a better perception of the intangible product and
services. Also they lessen customer’s perceived monetary, safety and social risk in purchasing
services which are hard to ascertain before purchase. Strong brands offer a lot of advantages such
as reduced competition, larger brand loyalty and increase response to price adjustment by
customers, larger profit and brand extensions to a service firm than brands that are not strong.
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Conclusively, the best way to build brand value and stop product and service commoditization is
through continuous attempt to build brand equity. Strong brands are established by creating an
emotional attachment with customers, seeking differentiation in communication and performing
the service. Branding makes clear a restaurant’s reason for existence and inspires its employees
to get used to the brand thereby building it for customers.
1.2 FAST FOOD RESTAURANT
According to the free dictionary (2003), fast food is an “inexpensive food, such as hamburgers
and fried chicken prepared and served quickly. In Data Monitor’s (2005), fast food market was
defined as the sale of foods and drinks for quick consumption either on the premises or in
authorize eating areas or for consumption in another place. According to Park (2004), fast food is
a common type of international business. It differs from other kind of food outside the home in
the sense that it is fast and easy to prepare, providing a common and consistent product.
Jekanowski et a! (2001) stated that due to the constant nature of quality and standard menu of
fast food, little time is spent acquiring information about the product. Jekanowski et al (1997)
also stated that fast food enable food time and time spent in activities like travelling or working
to be combined.
Hanson (2002) stated that the recent fast pace of living has influenced people to seek a fast meal
to fit into their short lunch hours This has resulted in the growth of fast food industries.
According to Park (2004), eating out enables consumers to satisfy their hunger, need for
convenience, pleasure, entertainment, time saving, social interaction and the mood of
transformation .He went further to say that benefits are obtained from food and restaurant by
consumers.
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Brand names as we know are very important to the success of fast food restaurant. It does not
only create customers trust but also enhance the competitive advantages of the restaurant. Many
fast food restaurants have distinguishable logos, features or text.
1.3 PROBLEM STATEMENT
Due to the fast change in the global market and increase competition, management of brand has
become of importance.
Building of strong brand equity is the top most priority of many fast food restaurants, but
attaining this objective is not always an easy task due to the fact that the products and services of
many fast food restaurants are similar and their means of distributions are alike. Price in the form
of discount and brand equity is the only possible means by which customers can differentiate one
brand from another. Indeed, price promotion has been one of the most important marketing
strategy relied upon by most fast food restaurant firms and this has lead to constant war price that
have reduced revenue and weaken customers loyalty.
When reading through literatures, we found limited researches regarding customer based- brand
equity in service industry and most of them focus on the relationship between brand equity and
firm performance using brand awareness and image as moderating effect. Also we noticed that
most researches {Aaker (1991), Keller (1993), cob-walgren et al (1995), Lasser et al (1995), Yoo
et al (2000), Yoo and Donthun (2001), Lin and Chang (2003) etc} that surveyed these four
dimensions of customer based-brand equity (brand awareness, perceived quality, brand loyalty
and brand image) have suggested that they all have influence on consumer.
Therefore, we have chosen to carry Out a research to indicate the importance of these four
dimensions of brand equity (brand awareness, brand loyalty brand image, perceived quality) on
consumer perceptions of a brand and to find out which among them those not really have much
influence on consumer perceptions of a brand.
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1.4 RESEARCH PURPOSE

Our thesis has to do with the importance of customer based-brand equity on consumer’s
perceptions of brand. However our work will find out the following:
• Which among these three dimensions of customer based-brand equity (brand
image, brand loyalty and perceived quality) appears to have the least brand equity rating?
• Does customer based-brand equity differ between the two restaurants with respect to each
attribute of brand awareness, brand image, perceived quality and brand
loyalty?
The study is based on the assumption that all the four dimensions of customer based brand equity
will have influence on consumer’s perceptions of brand. There are many well-known fast food
restaurants in Sweden, but for the purpose of our study, MacDonald and Max hamburger will be
taken into account. The result of this study could serve as a decision making tool to help fast
food restaurant managers maximize the value of their brands.
1.5 DEFINITION OF KEY WORDS
Several definitions of our key words exist in the literatures and we shall endeavour to write the
once that are suitable. This is just to give the reader a transparent background of the topic we are
concentrating on.
Brand
Kotler et al (2005, p.549) defined a brand as “a name, term, sign, symbol, design or a
combination of these that identifies the makers or seller of the product or services”. According to
Kapferer (2004), a brand is a name that has the power to influence a buyer. He went further to
say that this influence could be as a result of a set of mental association and relationship built up
over time among customers or distributors.
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