Customer based brand equity (CBBE) and the competitive performance of SMEs in Ghana

Abstract

Purpose – This paper has three main objectives. The first objective examines the degree of interrelationship between the level of brand equity and the performance of SMEs, while the second objective examines the extent of the antecedents of brand equity (brand awareness, brand association, perceived quality and brand loyalty) in predicting SME performance. The last objective examines the effect of brand equity on the performance of SMEs when the level of brand loyalty is high. Design/methodology/approach – Questionnaires were used in collecting data from managers and customers of SMEs. The sample comprises 98 managers and 311 customers of SMEs. In order to ensure that various sectors of SMEs were covered, stratified random sampling was used; thus, 40 per cent of the SMEs were from the trade sector, 30 per cent from the agriculture sector, and 30 per cent from the small manufacturing sector. However, a simple random sampling method was used in the selection of customers. Findings – It was found that there is a positive relationship between the various dimensions of brand equity and SME performance. Results from the regression analysis indicate a strong predictive power of SME performance by brand association and brand loyalty compared to brand awareness and perceived quality. The study concludes that the performance of SMEs and brand equity is high when there is high brand loyalty among customers. Research limitations/implications – This study did not examine the level of control and the major decision-making factors when deciding on the focus of brand building in both small and large enterprises. Studies could be conducted to compare the predictive power of the antecedents of brand equity in different industries (services, manufacturing and trade) for both SMEs and large enterprises. Practical implications – Managers of SMEs must devote their attention to the building of brand loyalty among customers irrespective of the industry in which they operate. Strategies must also be developed for brand associations as it is a prerequisite for the growth and continuous survival of businesses in a highly competitive market. Originality/value – The originality and value of this paper lies in the cross-sectional survey method (different industries) that was used as well as the use of the CBBE model in examining the competitiveness and performance of SMEs.