Determining the causal relationships that affect consumer-based brand equity

Abstract

Purpose – The purpose of this paper is to analyse the causal relationships among the dimensions that explain consumer-based brand equity, and to determine the importance of each dimension in the assessment of overall brand equity. Design/methodology/approach – A research instrument proposed by Yoo and Donthu was applied to undergraduate students of the University of Coimbra. Two leading brands in the Portuguese beer market were used in the study. Respondents were randomly assigned to one brand and were asked to rate all items on seven Likert-type scales. Based on Aaker’s conceptual framework, a structural equation model (SEM) was designed to analyse the proposed relationships. Findings – A causal order between brand equity dimensions was established. The results suggest that the positive effects of perceived quality and brand awareness on overall brand equity are mediated by brand loyalty. Research limitations/implications – Although the exclusion of brand associations’ dimensions in the SEM improves the validity of the constructs, it should be regarded as a limitation, given its importance in brand equity building. Practical implications – Marketing managers should focus on brand loyalty in order to increase overall brand equity, and should give special attention to perceived quality, since it is the factor with the strongest impact on brand loyalty. Originality/value – The identification of the causal relations among brand equity dimensions and the analysis of their influence in overall brand equity, not yet clearly validated in the literature.