Examining the relationship between brand equity, brand loyalty and customer satisfaction

Academic Thesis for Master's Degree

Field: Business Management, Major: International Business\

Abstract

The purpose of this study is to examine the relationship between brand equity, customer satisfaction and brand loyalty. The current research is descriptive and practical in terms of purpose. In terms of data collection, it is also considered field. The data collection tool in this research is a questionnaire that contains 21 questions to measure all research variables. A 5-point Likert scale is also used to measure the variables. The validity of the questionnaire was checked and confirmed by the opinions of professors and experts and its reliability using Cronbach's alpha. The statistical population of this research is the students of Rasht Islamic Azad University. Using Cochran's formula, 420 people were examined as the final sample of the research. In order to test the hypotheses, the structural equation modeling method was used. The results showed that brand equity has a significant relationship of 0.18 with customer satisfaction. Also, customer satisfaction has a relationship of 0.88 with customer loyalty. Among the dimensions of brand equity, ideal internal satisfaction is most closely related to customer satisfaction. Key words: brand equity, customer satisfaction, customer loyalty, restaurant, fast food. Introduction: Today, maintaining and strengthening customer loyalty towards the products or services of companies is the most important focus of marketing activities. Customer loyalty can reduce companies' marketing costs, attract more customers, and increase the effectiveness of a business. In addition, through word-of-mouth advertising of a product, loyal customers make the company deal with competitors' strategies and achieve better results. Brand loyalty makes customers choose a brand compared to other competing brands and buy from that brand on a routine basis and do not tend to other brands. Customer loyalty refers to the situation in which a customer generally buys or receives similar products and services from a company over time. Also, based on the level of loyalty of consumers and customers to a particular brand, the special value of that brand will also increase. Also, brand loyalty can be a potential output resulting from brand equity. Customer satisfaction also results from the fact that the experience of using a product is close to customer expectations. In this case, a satisfied customer will probably be a loyal customer. Therefore, in this research, the knowledge related to examining the role of customer satisfaction in the relationship between brand equity and customer loyalty is discussed. 1-2- Statement of the problem According to the researches of Cutler (2005) and Cutler and Keller (2006), the relationship between customer satisfaction and customer loyalty is very sensitive and significant. Because when the customer feels dissatisfied, he distances himself from the company and presents a bad story to others about the desired product or service. But when the customer feels satisfied, he will buy that product again and again and will give positive comments about that product to others. Based on this opinion, it can be said that by using customer loyalty, which is the result of his satisfaction with a particular product or service, it is possible to measure the volume or frequency of repurchases and the amount he recommends the product to others (Budiarti et al, 2013). 

During the past 2 decades, all types of organizations have increasingly realized the importance of customer satisfaction and loyalty. The main reason for organizations to put a lot of emphasis on customer satisfaction is that as customer satisfaction increases, it can lead to a stronger competitive position of the organization in the market and increase its market share and profit, reducing the cost of goods and services, reducing the risk of risk and reducing the cost of attracting new customers are other results of customer satisfaction and loyalty. Customer satisfaction can be defined in different ways. Post-purchase evaluation by the customer of goods and services is a form of purchasing satisfaction. In general, researchers believe that customer satisfaction is one of the determining factors of repurchase, customer word of mouth and ultimately customer loyalty. Satisfaction has long been one of the determinants of customer loyalty. Satisfied customers return to the organization and buy again or use the company's services in the future.. This category of customers will exchange their positive and negative experiences of the company's goods and services with others (Bayraktar et al, 2012).

From the point of view of some researchers, loyalty is the final factor of the customer satisfaction model. Loyalty is measured by the purchase intention, tolerance of the price of goods and services from the customer, as well as the offer to buy goods and services to others. It is thought that a better and more satisfied customer's perception of a company or organization should increase their loyalty (Bayraktar et al, 2012). Despite these situational effects, marketing offers are potentially influencing customer behavior change. The most common definition of loyalty is provided by Oliver, who defines loyalty as having a deep commitment to a preferred product or service, that the act of purchasing is carried out continuously and consistently in the future and causes repeated purchases from a certain brand or a set of certain brands, while there are situational influences or efforts made to replace or change his behavior in the external environment (Tajzadeh Nemin et al., 2019).

Many definitions and dimensions of There is customer loyalty. From Majumdar's point of view, consumer loyalty is a complex and multi-dimensional concept, and the complexity of loyalty is evident from the fact that a specific and unified definition of it has not yet been provided, but in general, researchers are of the opinion that loyalty can be examined from two attitudinal and behavioral dimensions. (Shojaei, 1389).

Since this research seeks to investigate loyalty to service, definitions of loyalty to service are also provided. Sander believes that service loyalty is more complex than brand loyalty, which is usually applied to goods. From his point of view, service loyalty is not necessarily compatible with other forms of loyalty such as brand loyalty, store loyalty, or supplier loyalty. Schneider states that service loyalty has a strict standard compared to other loyalty items and a service loyal customer must be loyal to the brand and loyal to the place. In this area, loyalty can be towards the service or its provider. Also, services have the characteristics of intangibility, heterogeneity and simultaneity of production and consumption, which adds to the complexity of this type of loyalty (Folavand et al., 2013).

Special brand value means marketing and financial values ??related to the power of a brand in the market, including real assets specific to a brand, brand awareness, brand loyalty, perceived quality of the brand, and brand associations. According to Lasser, Mittal and Aron (1995), existing literature has evaluated brand equity from two different perspectives. Financial perspective and customer perspective. The financial perspective usually refers to the value of the company's brand in the market. While the customer's perspective evaluates the brand equity based on the brand value perceived by the customer (Severi & Ling, 2013). Brand equity is the broader form of brand perception. But brand loyalty from the past means having a positive attitude towards buying a particular brand. On the other hand, the special value of the brand includes a point of view and an attitude that does not necessarily lead to a purchase. The special value of the brand includes 5 parts, which are: 1- Perceived quality; 2- the behavior of employees; 3- ideal concept; 4- brand identity; 5- lifestyle coherence (Nam et al, 2011). Aker (1996) defines brand equity as a set of assets related to the name and symbol of a brand that add or reduce the value provided by a product or service to the company and the customer (Juntunen et al, 2011). Perceived quality is the customer's perception of the overall quality or superiority of a product or service compared to the customer's desire for its alternatives. To understand perceived quality, it would be useful to identify and measure underlying dimensions, but perceived quality itself is a summary construct. The brand name is linked to the quality perceived by the customer, a perception that only shows the overall quality and is not necessarily based on the customers' knowledge about its specific features (Pike et al, 2010).

Employee behavior is one of the other items and elements of brand equity. The behavior of sales department employees or service providers creates a mentality in the customer. Due to the importance of employee behavior, researchers consider this part of the special value of the brand (Nam et al, 2011).