Nexus between Trust, Credibility, Value and Willingness to Pay (WTP) a Price Premium: Intervening Role of Brand Equity in Herbal Industry

Abstract

Enduring brand trust, credibility, value and equity are essential drivers of customers’ willingness to pay a high price for a brand which can engender a higher profit margin. The role of brand trust, credibility, value and equity in strengthening customers` willingness to pay a price premium has been extensively studied of late. However, studies on the effect of brand trust, credibility and value on willingness to pay more through the intervening role of brand equity, particularly in the herbal industry are relatively scarce. As a result, this paper`s goal was to investigate the brand equity effect on the relationship between trust, credibility, value and willingness to pay a price premium in the herbal industry. Survey questionnaires were employed to gather information from 265 samples of customers through a systematic sampling strategy. The research propositions were tested using structural equation modelling. The study established that brand equity fully mediates the effect of brand credibility and perceived value on willingness to pay a price premium but partially mediates the path between brand trust and willingness to pay more in the herbal industry. The research, therefore, recommends that brand managers need to consider brand credibility, trust, value, and equity in strengthening customers` willingness to pay a price premium for medicinal herbal products in the industry.