Interrelationship between Brand Interrelationship between Brand Equity Dimensions: Equity Dimensions:

A SEM Approach to Leather Shoe A SEM Approach to Leather Shoe BrandsBrands

Presented byProf. Dr. Kundan Dutta Koirala

Tribhuvan University

Sajeeb Kumar Shrestha Research Fellow, Ph.D.

Teaching Assistant, Shanker Dev Campus, Tribhuvan University drsajeeb@gmail.com 3rd International Conference

Transforming Management System for Innovation, Development and Governance

March 27-29, 2015

Hotel Yak& Yeti, Kathmandu1

Background of the Background of the StudyStudy

Brand is a unique name or symbol aimed to identify the goods or services from other sellers or competitors (Aaker, 1991).

A brand is simply a promise that an organization communicate to the markets.

Brand name assures consumers not to ask more about product benefits while purchasing the products (Borden, 1942).

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……Before 1980s different approached were

used to mention the brand (Kapferer, 1997).

Brand has been treated as a non routine fashion and it's just a part of the product (Urde, 1999).

Today, branding has become a major concern area of product category (Kotler, 2002).

Brand tells the potential qualities of the product (Kapferer, 1997).

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Research Questions and Research Questions and ObjectivesObjectivesThe primary objective of the study is to

examine the interrelationship of Aaker’s customer based brand equity model (Aaker, 1991) in Nepalese leather shoe brands.

Questions: What is the valid model of brand

equity in leather shoe brands in Nepal?ObjectivesTo examine the valid model of brand

equity in leather shoe brands in Nepal?4

ReviewReview

Brand Equity: The value consumers associate with

a brand, as reflected in the dimensions of brand awareness, brand associations, perceived quality, brand loyalty, and other proprietary brand assets. (Aaker, 1991)

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……Brand Awareness:The ability of a buyer to recognize or

recall that a brand is a member of certain product category. (Aaker, 1991).

Perceived Quality:Perception of the overall quality or

superiority of a brand relative to alternative products (Low & Lamb Jr., 2000).

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……

Brand Association:Brand associations consist of all

brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes and is anything linked in memory to a brand. (Kotler & Keller, 2006)

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……

Brand Loyalty:Brand loyalty as the attachment of

a customer to a brand (Aaker, 1991).

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Figure 1: Research Framework9

PQQ

BAWW

BLLBASS

OBEE

H3 = 3

H2 = 2

H1 = 1

H4 = 1

H5 = 1

H6 = 2

H7 = 3

H8 = 4

H10 = 6

H9 = 5

Research Framework

Hypotheses H1 (1): Brand awareness has significant positive effect on perceived

quality. H2 (2): Brand awareness has significant positive effect on brand

association. H3 (3): Brand awareness has significant positive effect on brand

loyalty. H4 (1): Brand awareness has significant positive effect on brand

equity. H5 (1): Perceived quality has significant positive effect on brand

association. H6 (2): Perceived quality has significant positive effect on brand

loyalty. H7 (3): Perceived quality has significant positive effect on brand

equity. H8 (4): Brand association has significant positive effect on brand

loyalty. H9 (5): Brand Association has significant positive effect on brand

equity. H10 (6): Brand loyalty has significant positive effect on brand equity.

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MethodologyMethodologyResearch design: Descriptive and Causal.Sample Case: Actual customers who

purchased leather shoeSample frame: Nepali Shoes House;

Nepali Leather Shoes Exhibition. Sample Methods: Convenience Sampling Data: Primary data.Data collection: Structured questionnaire.

389 responses were valid.Tools of Analysis: SEMSoftware: SPSS 20, AMOS 20.

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AnalysisAnalysisExploratory Factor Analysis (EFA)

Bartlett's test of Sphericity (Chi-square 7457.16 (df25, sig. 0.000)

KMO = 0.912Sample were adequate and data were fit for

factor analysis. Five factors were extracted that cumulatively

accounted 69.98 percent of the total variance. All the statements with factor loadings greater

than 0.5 were clubbed in the corresponding factor.

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Rotated Component Matrixa

Component

1 2 3 4 5

BAS7 .770

BAS3 .767

BAS2 .742

BAS1 .706

BAS8 .650

BAS4 .626

BAS6 .620

BAW2 .905

BAW1 .886

BAW3 .874

BAW4 .852

BAW5r .753

PQ4 .865

PQ1 .862

PQ3 .858

PQ2 .856

PQ5r .603

BL1 .761

BL2 .747

BL3 .718

BL5 .710

BL6 .702

OBE2 .795

OBE1 .778

OBE4 .718

OBE3 .595

Extraction Method: Principal Component Analysis.Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 6 iterations.

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Table1: Rotated Component Matrix

Confirmatory Factor Analysis (CFA)

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ModelScale Item

s

Model Fit Fit Indices AVE >AVE CMIN/

DFCFI GFI AGFI RMSE

ARMR

>0.7 >0.50 >AVE 3-5 >.90

>.90

>.90 .1 .5

Final Measurement Model

2.13 0.96 0.91 0.88 0.54 0.07

Remarks BA1, BA2, BA3, BA5, and BA6 were deleted.

Table 2: Model Fit Indices

Validity and Reliability of the Model

Discriminant Validity AVE should be greater than 0.50 (Fornell & Larcker,

1981). AVE should be greater than MSV AVE should be greater than ASV.

Convergent Validity:Construct Reliability (CR) should be greater than 0.7 CR should be greater than AVE.

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Table3: Validity and Reliability of Table3: Validity and Reliability of ConstructsConstructs

CR AVE MSV ASV BLLBAS

SBAWW PQQ

OBEE

BLL 0.900 0.643 0.4760.32

10.80

2

BASS 0.775 0.545 0.4760.22

30.69

00.73

8

BAWW 0.929 0.725 0.1270.10

20.35

60.35

60.852

PQQ 0.912 0.681 0.2440.17

40.49

40.40

80.302

0.825

OBEE 0.818 0.543 0.4360.20

40.66

00.35

10.253

0.439

0.737

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Figure 2: Final Overall Measurement Model 17

Figure 3: Structural Equation Modeling (SEM)18

Structural Equation Modeling (SEM)

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S.N.Dependent

VariableIndependent Variable

Squared Multiple

Correlations (R2)

1Perceived

QualityBrand Awareness 0.091

2Brand

Associations/Image

Brand Awareness, Perceived Quality

0.226

3 Brand LoyaltyBrand Awareness, Perceived Quality, Brand Associations/Image

0.536

4Overall Brand

Equity

Brand Awareness, Perceived Quality, Brand Associations/Image, Brand Loyalty

0.478

Table 4: Variance Explained by Structural Model

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Hypotheses Testing

Hypotheses

From TO

Standardized

Coefficients

S.E.t-

valueResults

H1 BAWW PQQ 1= 0.302 0.032 5.781 Significant

H2 BAWW BASS 2 = 0.256 0.043 4.858 Significant

H3 BAWW BLL3 = 0.083 0.036 1.797

Not Significant

H4 BAWW OBEE1=0.025 0.039 0.526

Not Significant

H5 PQQ BASS 1 = 0.33 0.071 6.125 Significant

H6 PQQ BLL 2 = 0.24 0.063 4.897 Significant

H7 PQQ OBEE 3 = 0.165 0.07 3.104 Significant

H8 BASS BLL 4 = 0.562 0.059 9.244 Significant

H9 BASS OBEE5 = -0.224 0.072

-3.086

Significant

H10 BLL OBEE 6 = 0.724 0.082 9.06 Significant

Table 5: Interrelationship of Brand Equity Dimensions

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RelationshipDirect

without mediator

Direct with

mediator

Significance Indirect

Relationship

BAWW-PQQ-OBEE

0.251 (S) 0.312(S) 0.001 (S)Partial

mediation

BAWW-BASS-OBEE

0.251 (S) 0.045 (NS) 0.011 (S)Partial

mediation

BAWW-BLL-OBEE 0.251 (S) 0.020 (NS) 0.06 (NS) No mediation

Table 6: Mediation Tests

Limitations of the StudyLimitations of the Study

Data are primary in Nature.Study is conducted in capital city

(Kathmandu).

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FindingsFindingsBrand equity dimensions (BAWW,

PQQ, BAWW and BLL) are interrelated with each other.

Brand Awareness does not affect directly Brand Loyalty and Brand Equity.

Brand loyalty is the major factor for increasing brand equity.

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……From bootstrapping, Brand

association (BASS) significantly mediates brand awareness (BAWW) to brand equity (BEE). So, it is also called partial mediation.

But, brand loyalty cannot mediate brand awareness to build brand equity. It is found no mediation.

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ConclusionConclusionThe findings of the study empirically

confirms that proposed model is valid in the context of Nepalese shoe brands.

The study is similar to Dua et al. (2013), Shrestha (2011) and Tong & Hawley (2009) that perceived quality, brand association and brand loyalty have played significant role in creating brand equity.

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……

The SEM model depicted that brand awareness, perceived quality; brand associations and brand loyalty were the antecedent factors for brand equity in the leather shoe brands.

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……Leather shoes markets are at the

growing stage of marketing and exercising mostly selling as well as marketing philosophy in Nepal.

Through nested model, shoes companies can communicate their potential customers and make a big sale.

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