Abstract
This paper examines the effects of product innovation and service quality on brand equity mediated by relationship quality. To date, the patterns in past research show that there is less attention been paid to examine the importance of product innovation and service quality in affecting brand equity. Thus, in order to explore our knowledge in this area, this study was conducted among car users in Northern region of Malaysia. The data were analyzed using SPSS and Structural Equation Modeling (SEM). The findings indicated that product innovation and service quality have significant positive effects on relationship quality and brand equity. Moreover, the findings revealed that relationship quality mediates the relationship between product innovation and brand equity. It also shows that relationship quality mediates the relationship between service quality and brand equity. Based on these results, several implications and future research suggestions are discussed in this paper in order to explore our knowledge towards the importance of product innovation and service quality in affecting relationship quality and brand equity.
Highlights
Brand equity is a key concept of brand management and it has received significant attention from several scholars in past research (Boo, Busser, & Baloglu, 2009)
The findings indicated that product innovation and service quality have significant positive effects on relationship quality and brand equity
The purpose of this study was to examine the effects of product innovation and service quality on brand equity in Malaysian automotive market from the perspective of customers
Summary
Brand equity is a key concept of brand management and it has received significant attention from several scholars in past research (Boo, Busser, & Baloglu, 2009). Due to the fact that business markets are highly characterized by intense market competitiveness, fostering brand equity in order to enhance the level of organizational performance and growth has become a strategic priority for various brands (Tsai, 2011). The key advantage of building strong brand equity is highly associated with long-term organizational success. Obtaining strong brand equity enables firms to generate higher profits and minimize marketing expenses (Keller, 2003; Myers, 2003). Brands which successfully manage to establish customer loyalty and favorable image among customers worldwide, would as a result gain high profit margins, decrease competitive threats, and influence customers’ reactions towards the marketing programs (Gill & Dawra, 2010). From customers’ point of view, this intangible asset in most cases is considered to be the main factor in choosing a particular brand over another
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