International Academic Institute for Science and Technology. Vol. 4, No. 2, 2017, pp

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1 International Academic Institute for Science and Technology International Academic Journal of Economics Vol. 4, No. 2, 2017, pp ISSN International Academic Journal of Economics Investigating CRM (customer relationship management) correlation with brand image according to the intermediate function of brand equity (case study: dairying company Of Ashena in Bojnourd) Fateme Mizaany M.sc of governmental management, University in Deli Jan, Iran Abstract This research is an applied one, and methodologically it is a descriptive, survey and correlational research. Statistical population of this research includes customers of Dairying Company of Bojnourd. Since statistical population of this research is more than people, and according to Morgan table with sampling error of 5%, we have chosen 385 people as research samples. In order to analyze data based on research hypothesis, we used descriptive statistic method, and for doing factor analysis we used SPSS software. For analyzing research hypotheses, we used structural equations with LISREL. The results of this research show that, this model is confirmed in factor loading and statistically it is significant and all of the correlations between variables are significant. The results also showed that there is a significant correlation (0.99) between managing relationship with customer and brand image. Significance correlation of managing relationship with customer and brand equity is also significant (0.79). There is a significance correlation between brand equity and brand image (0.36). According to intermediate function of brand equity correlation between customer management with brand image is also significant. Keywords: CRM, brand image, brand equity. Introduction In a few past decade, researcher and active people of in the field of services paid more attention to the subject of brand. The point that brand value is higher than common value of properties gained out of financial activities, caused to pay more attention to brands in the service section. Branding is an applied strategy for being distinct in service and production industry. Nowadays, companies and organizations not only are seeking for services and market products, but olso they endeavor for making understanding of customers favorable with their products, brand and companies (Usakli and Baloglu 2011). Aaker (1997) expressed that brand image is called into the mind while calling a brand, but brand personality points to human characteristics in relation with a brand. Keller and Richey also believe that brand personality of a company is reflected on the companies' values and operations (keller & Richey 2006). Brand image deals with external features of goods or services including methods that brand tray to obviate customers' social and spiritual demands. Brand image means that how individuals think absolutely about brand so that they 18

2 can know about products efficiency. Nowadays, brand is not only an efficient tools in the hand of managers. Brand is a strategic demand that help organizations in creating more values for customers and competitive advantages. As we mentioned, according to competitive situations, technological development and universalism, business and professions cannot depend just on brand and product for success. Yet, they should pay attention to customers' demands. In such situations, brand can make advantages for company or commercial business that are accordance with customers demand and expectations. If we establish a coincidence between business and customers' demands, relationship with customer will be a suitable method for development and increase in the value of brand. On the other hand, for increasing customer loyalty to brand and brand equity and obviating customers' demands in the service section, we can use relational marketing activities for increasing customers' advantages. (Kim & et al, 2008). Successful brands attract customers' confidence toward products and intangible services and customers can recognize and imagine services in better manner. There are a lot of reasons in the literature for improving branding. From customers point of view, decrease in the perceived financial and nonfinancial risks and research costs are considered as key advantage. Evaluating brand value enables top managers of service section to compare their brand power among a competition series and use its results for gaining brand value during the time in order to formulate marketing strategies. Paying more and more attention to services, existence of different brands, competition between suppliers and similarity of services to customers cause customers to be confused in choosing brand and making difference between them. In such a situation, brand image and marketing activities will effect severely on customers decision ( Xo & Chun 2010). Yet, according to the importance of branding in the dairying companies, brand equity value measuring, and brand image turned to be analyzed exactly. On the other hand, according to above mentioned reasons, innovation of subject and express of issues for managers and decision makers is necessary and important to be analyzed. This research investigates the effect of successful relationship with customer on brand image through brand equity. Theoretical bases Customer relationship management CRM has different lexical meaning among people and its application is in the limit of variable constructions that range from data storage to customer demand, competitive environment, private electronic networks and software levels. Customer relationship management (CRM) is considered as activities done in order to recognize, control, attract, expand and increase beneficial customers loyalty through presenting correct product to customers with right channel, in suitable time and price ( Sheth & et al 2007). CRM is a way for recognizing, attracting and conserving customers a biggest property of business. It is predicated to procedures and technologies that organizations apply for recognizing, selecting, encouraging, expanding and conserving and presenting services to the customers. This technic includes applying a comprehensive solution that make a perfect relationship between activities related to customers through integrating individuals, procedures and technology to enhance our relationship with customers (Wong and Sohal 2002). While CRM possesses a growing procedure in many industries, in competitive industries, where a complicated organization works as a station for obviating customer demands, CRM can be achieved in different frames and effective grounds. First, when the procedure of CRM behavior with customers is very different, the more is difference between customers' demands and its value, the more will be customer's loyalty and its values during creating and recovering CRM technics (Rahim Nia and Fatemy 2013). Second, the more commercial activities principles in a special manner, the more services and channels that these services are presented to customers. As a result, more experiences can be gained because of 19

3 customer's presence and obviating his demands. Finally, we will have more chance to have efficient performance of CRM. At the end, CRM is a chance for making difference between customers' experiences. So, the more this chance of making difference, the higher your view toward creating values in the shape of income addition and deduction of services price. It also results in reasonable behavior of customers and presenting services (Katler and Armstrong 2004, p: 80). Brand image Brand image is a series of perceptions that are located in the mind of customer. In other words, customer's perception about dominant features of product shapes a composed picture of symbols that has been sent by brand including external symbols, products, advertisement, massages and formal information and so on. We can decrease these perceptions with suitable indicators in the mind of customers and increase customers loyalty and their satisfaction (Mohammadiyan 2010). Collection of beliefs that a customer has about special brand in his mind is called brand image (Katler and Armstrong 2004). Brand image is a series of imaginations that are organized in a significant manner (Aker, 1991). Perceptions toward a brand that reflect imaginations in the mind if customers (Keller 1998). Brand image is a picture about a company or production that people have in their mind. Company shape people imagination through designing and drawing an entity or station, yet, there are other factors that interfere in mental image of every company (Kotler 1999). Brand image refers to strong, desire and unique imaginations in the mind that cause perceived quality, positive attitude and positive effect (Rosh and et al 2006). From Keller's point of view, brand image is defined as perceptions about brand that has relationship with created links in the mind of customers. Brand image helps customers shopping generalization, because it is a base for product differentiation, brand name generalization, making reason for shopping and positive feeling about brand (Vilarzh 2005). According to Koller's point of view, brand awareness is a principle condition for the creation of brand image in the mind. When a brand is finely located in the mind, it is easy to relate perceptions to the brand and locate them correctly in the memory. As Showling and Kapender showed awareness is too much extent related to valuable dimensions of image (Ash and et al 2006). An efficient brand image does three works for goods. First, it sends a message that conveys good's entity and quality. Second, it conveys the image of this massage in an indicative and prominent manner so that they don t admix with similar massages from competitors. Third, mind image presents cathexis and feelings that affect customers mind and feelings (Katler 1999). Brand Equity Sweeney and Swait (2008) believe that a brand is a symbol that is represented regarded to a name. Brands are valuable to customers because of two reasons: 1- they decrease perceived risk of consumption, 2- they economizes in decision making costs. Brand is an effective market symbol that a company expands it for distinguishing lake of harmony in market information. In other words, customers have more information about product or service then company itself. As a result, they engaged in unfavorable situation that finally causes customers doubt about product. Basically, consumers doubt about company's promises and their ability in fulfilling them and the advantage of conserving a long time relationship with provider. Lack of harmony put costumer in an unsuitable conditions about company. So, for compensating this doubt, company gain motivation through showing its tendency for fulfilling its promises. Brands empower customers to penetrate on companies, and encourage companies to do suitable actions, that is, it force companies to fulfill their promises (Aswini and Aswith 2008). Berry (2000) believes that brand increases company's value in two manners: first, it attracts new customers by developing and concentrating of awareness, and then it reminds percent customers to think about the company and do this favorably. In the second manner, the concept of relationship advancement 20

4 gain its meaning from brand. Brand can be described as a mechanism for engaging seller and shopper in a long term relationship. So, brand can act as an offensive tools of marketing for attracting new customers. Brand equity that has been changed to a principal concept in marketing since 1980 is a kind of added value that is created for organization by brand. According to Keller's (2003) definition, brand equity refers to a brand that is well known in the minds of customer very well. In spite of different definition about brand equity, keller an Aker expressed that: "in general, brand equity include different dimensions that constitutes infrastructure of presented value (sun & Ghiselli 2010). Keller cites in his studies that creating a strong brand equity is a gradual and multi-level procedure that is similar to a ladder. In this ladder, the final output depends on the previous step's success that includes: "salience, performance, imagery and feeling of brand that are explained in detail from Keller's point of view in the following section (agahilani and Musavian 2000). Research literature Zamani Moghadam and Jfari Fard (2014) showed that among three variables of brand equity, tendency to paying higher price, and brand popularity, the variable of brand popularity had the highest relationship with the variable of tendency to shopping, and brand image was indirectly in relation to shopping tendency via brand equity and brand popularity. Azizi and et al (2013) showed that consistency between brand personality and customer, has positive and significant effect on confidence and loyalty to brand. Confidence, loyalty and feeling of dependency to brand has positive and significant effect. Karbasi var and Yardel (2013) concluded that loyalty to brand and brand perception factors has positive and direct effect on commercial brand equity. On the other hand, the factors of perceived quality and brand awareness indirectly and via brand loyalty effect on brand equity. Kaffashpour and et al (2013) investigated brand equity and brand image through paying attention to customer value in service section. Rahimnia and Fatemi(2012) showed that a successful relationship with customer has positive and significant effect on brand image and brand equity, and they also supported significant and positive effect of brand equity on brand image. In this research, indirect effect of a successful relationship with customer on brand image is more than its direct effect and intermediate function of brand equity. Kayman and Arasli (2014) concluded that dimensions of brand equity influences brand image. Kim and et al (2013) found that brand equity hs significant influence on brand image and each dimension of successful relationship with customer effects brand image. Kim and et al (2012) found that effectiveness of perception about brand personality was theoretical. They also concluded that there is a direct relationship between brand preference and advertisements. Roy and Chau (2012) showed that although, brand awareness leads to brand loyalty, this kind of affect regulated by perceived quality. Framework and conceptual model of research. For developing research hypothesis, a research needs a conceptual model to recognize variable hypothesis and explain correlation between these variables and conceptual definitions. In this regard, for assessing CRM variable as a dependent variable, we used Sun's (2004) approach. For evaluating brand equity variable as intermediate variable we used Delgado's (2005) approach. For evaluating brand image variable we used Han and et al (2011). According to research variables, conceptual model of research is codified as following graph. 21

5 Value Brand image Figure 1. conceptual model of research (Rahimnia and Fatemi 2012) Methodology Statistical population of this research includes customers of Dairying Company of Bojnourd. Since statistical population of this research is more than people, and according to Morgan table with sampling error of 5%, we have chosen 385 people as research samples. For sampling we used simple accidental method. Questioners have been used for collecting data by field and library methods. For assessing CRM, Sun's standard questioner, for evaluating brand image variable Han's(2011) standard questioner, and for assessing brand equity variable, Delgado's (2005) and et all standard questioner has been used. In order to analyze data based on research hypothesis, we used descriptive statistic method, and for doing factor analysis we used SPSS software. For analyzing research hypotheses, we used structural equations with LISREL. For testing reliability we used Cronbach Alpha, in which reliability coefficient of CRM was 0.92, brand image 0.90, and brand equity Research findings Among samples, 63 percent male and 37 percent female responded to questioner. 29% of samples were below 29, 33% were between 31 to 40 year-old, and 27% between 41 and 50, and 11% above 51 yearold. Among the responders, 42% of them were Diploma, 37% Associate, 14% Bachelor and 7% were Master and higher degrees. Testing hypothesis 22

6 Figure 2. Structural Model Table 1. the results of evaluating goodness of fit in structural model of research Fitness index Acceptable range Value Result (index of x square to < Fit degree of freedom) CFI (comparative fitness > Fit index) GFI (Goodness of Fit) > Fit AGFI(adjusted goodness > Fit of fit index) NFI (Normed Fit Index) > Fit NNFI(NonNormed Fit > Fit 23

7 Index) RMSEA(Radical Mean Square Error Access) < fit Since, the proportion of X 2 to degree of fitness is below 3, and RMSEA < 0.08, so this shows that this model has favorable goodness of fit. For assuring about other indexes such as NFI (normed fit index), NNFI (non - normed fit index), IFI (Increasing fit index) and CFI (comparative fit index) has been used, these indexes are > 0.9, this shows that designed model is very fit in comarision with other models, and GFI is close to 0.9. in other words, observed data coincide with conceptual model of research. Table 2. the results of direct correlation and coefficient of hypothesis of model. Path Symbol Path Significance Result of test coefficient Correlation with customer--- brand image CRM--- IB ACCEPTED Correlation with customer brand CRM ACCEPTED equity BE Brand Equity Brand image BE---IB ACCEPTED Table 3. the amount of correlation between all of the variables Kind of correlation Direct correlation Indirect correlation Entire corelation CRM to IB x 0.36 = CRM to BE BE to IB Hypothesis 1: CRM has significant correlation with brand image in dairying company of Bojnourd. Correlation Coefficient path between CRM and brand image is t statistics for this coefficient is 7.61 and its value is higher than significance level of 1,96. Hypothesis 2: CRM has significant correlation with brand equity in dairying company of Bojnourd. Correlation Coefficient path between CRM and brand equity is t statistics for this coefficient is 7.61 and its value is higher than significance level of 1,96. Hypothesis 3: brand equity has significant correlation with brand image in Dairying Company of Bojnourd. Correlation Coefficient path between brand equity and brand image is t statistics for this coefficient is 3.35, so we can conclude that coefficient is significant. Hypothesis 4: according to mediator function of brand equity, CRM has significant correlation with brand image in Dairying Company of Bojnourd. Correlation Coefficient path between CRM and brand equity is t statistics for this coefficient is 7.61 and its value is higher than significance level of 1,96. On the other hand, path coefficient and t value for correlation between brand equity and brand image are 0.36 and 3.35 respectively. Results This research investigates correlation of CRM with brand image according to mediator function of brand equity in Dairying Company of Bojnourd. According to the results, CRM has significant correlation with brand image (r=0.99) in dairying company of Bojnourd. This correlation shows that having relation with customer will increase brand image. The results of research coincide with the hypotheses of researchers' findings like Rahimnia and Fatemi (2012), Kim and et all (2013). Rahimnia and Fatemi (2012) cited that customer successful relation variable has significant and positive effect on brand equity and brand image. 24

8 Likewise, positive and significant effect of brand equity and brand image supported. According to the results of this research, indirect effect of successful relation with customer is more than its direct effect, and intermediate function of brand equity has been confirmed. A customer pay attention to characteristics of a brand according to his own demands and needs. As the findings of Kim and et all (2013) showed, brand equity has significant effect on brand image and each dimensions of successful relation with customer affects brand image. Image can be considered as a vital concept for marketing managers. Brand conception that shapes according to brand and customers attitude, is considered as dependent factors of brand value that is applied extensively in brand equity framework. Brand image has root in experiences of customer and perception about service quality is as function of this experiences. the esults of second hypothesis shows that CRM has significant correlation with brand equity in dairying company of Bojnourd (r=0.67). This result coincides with the findings of Rahimnia and Fatemi (2012) and Kim and ET all (2010). Findings of Kim and et all (2012) showed that brand equity assessment helps top managers of organizations to compare the power of their brands among a competitive collection and use their results for gaining brand equity and formalizing marketing strategies. Paying attention to brand issue and its management in service section has significant importance. The results out of third hypothesis shows that brand equity has significant correlation with brand image in dairying company of of Bojnourd (r=0.36). The result of this hypothesis is adjusted with the findings of Kafashpoor and ET all (2013), Rahimnia and Fatemi (2012), Kim and Et all (2012), Roy and Chao (2012), Seyyed Amery and et all (2012). The more the effect of brand equity dimension, the more the effect of brand equity in creating brand image. A more powerful brand equity makes a clear and more constant image in the minds of customers (Rahimnia nad Fatemi 2012). The results of hypothesis 4 shows that according to mediator function of brand equity, CRM has significant correlation with brand image in Dairying Company of Bojnourd. Cayman and Areli (2014) showed that using perception quality dimensions and investigating heir correlation with loyalty and brand image, influences brand equity dimensions and brand image. Suggestions For improving correlational marketing activities in making relation with customer, having commitment in relationship with customer is one of the important issues that should be considered in service section. Creating a system of customer and management correlation is suggested. Making relationship with customer after consuming product and paying attention to their suggestions and complaints is a principle step in creating trust and commitment. It is suggested that company should concentrate its marketing activates on the customers who have high trust to company. Because investing about these customers can be profitable to the company in near future. Making resources for conserving and creating trust to company with the purpose of creating positive brand equity. Customers who have high relationship commitment encourage brand equity, so creating and conserving string relationship with customer in order to increase their commitment level is important. It is suggested that brand management programs in service parts be concentrated on creating brand image by recognizing the most important and effective dimension and assign necessary resources for increasing brand equity that finally cause favorable and positive image. It is suggested that pay more and close attention to distributing products, because customers make an image about product by observing selling situation that cause increase or decrease of brand equity. 25

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