Abstract
The objective of this research is to explore the relationship between brand extension strategy, brand image, brand trust, and brand equity in the coffee industry of Indonesia. The research mainly discusses the effect of brand extension strategy on brand equity through brand image and brand trust in the coffee industry, i.e., Kapal Api as a leading coffee brand in Indonesia. Approximately 200 respondents of Kapal Api consumers participated on the survey by responding the questionnaire. Data were analyzed using Structural Equation Modeling (SEM) by combining factor analysis and regression analysis. The results of the evaluation of the one step modification model show that the model is fit and tested for causality. This study shows that brand extension strategy affects brand trust but does not affect brand image and brand equity. Brand trust affects brand image and brand equity. In addition, the brand image also affects brand equity. Brand trust is able to mediate the brand extension strategy on brand equity while a brand image is not. This research is useful for businesses to evaluate marketing strategies in maximizing potential customers by understanding the factors that influence brand equity.
Highlights
1.1 Introduction of the ProblemModern marketing is supported by the raising of various brands
The research mainly discusses the effect of brand extension strategy on brand equity through brand image and brand trust in the coffee industry, i.e., Kapal Api as a leading coffee brand in Indonesia
The results of this study prove that brand extension strategy has an influence on the brand; it does not have a direct effect on brand equity and brand image, while brand trust has a direct effect on brand equity
Summary
1.1 Introduction of the ProblemModern marketing is supported by the raising of various brands. Brands become the most important part of the product because it can affect the consumer in purchasing (Kakkos et al, 2015; Chatzipanagiotou et al, 2018; Ganesh et al, 2018). Consumer’s brand assessment creates customer-brand relationships that can increase consumer loyalty to certain brands (Hunt, 2019). This is because brands provide added value to products in the minds of consumers (Severi & Ling, 2013). Added value created from a set of assets, brands, and symbols is known as brand equity (Keller, 2008). The results of brand equity are the creation of brand awareness and brand value that will influence the strength of the brand in the market share (Kapferer, 2008). Brand equity helps consumers reduce time sacrifices in simplifying the selection process to make purchasing decisions
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