JANUARY 2013 VOL 4, NO 9 EVALUATION AND PRIORITIZATION OF BRAND EQUITY DIMENSIONS FROM CUSTOMER VIEWPOINT IN BANKING INDUSTRIAL

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1 EVALUATION AND PRIORITIZATION OF BRAND EQUITY DIMENSIONS FROM CUSTOMER VIEWPOINT IN BANKING INDUSTRIAL Mohammad Javad Taghipourian 8 Department of management, Chalous branch, Islamic Azad University (I.A.U), Chalous, IRAN, Abstract: According to the more number of private banks and financial institutions and credit in banking industrial of Iran and consequently become more competitive banking activities, state banks authorities increasingly are discovering importance of brands and brand equity in banking industrial so they could take better decisions if be further investigated about this issue thereby could maintain and attract more customers and make more profit. Therefore purpose of the study was to determine and priority brand equity level in banking industrial by using three dimensions model and Entropy method. The results shown that brand equity level of Melli bank from viewpoint customers was in acceptable level and highest priority for perceived quality and have lowest weights for brand image. Keywords: BRAND EQUITY- BANKING ENTROPY. 1.INTRODUCTION: Currently, brand is one of the most important concepts related to the marketing science. is a concept that belongs to an enterprise, a football team, a political party, or even an individual person; and it adds value to those it belongs, it integrates and associates with them. The brand that associates with the correct and positive image is critical for product management and marketing communication (Erenkol and Duygun, 2010). If strong brands may enhance market share, create customer loyalty and increase profit, they are valuable assets to a firm and therefore it is important for managers to measure the equity that had been built up by their brand (Kimpakorn and Tocquer, 2010). Financial professionals have developed the notion that a brand has an equity that may exceed its conventional asset value. Indeed, the cost of introducing a new brand to its market has been approximated at $100 million with a 50 percent probability of failure (Kim and Kim, 2005). equity is the added value endowed to a product as a result of past investments in the marketing of the brand. Added value of a brand is created in the mind of consumers as a result of perceived performance on various marketing dimensions. Further, brand equity develops from the confidence that consumers place in one brand over another.this confidence leads to value for both the firm and the customer. The advantages that a brand with higher equity enoys are increased premium pricing, and lower advertising-to-sales ratios (Lee and et al., 2010). The marketing perspective of brand equity is viewed with a customer perspective to help marketers to understand the brand in the minds of customers and design effective marketing programs to build the brand (Kimpakorn and Tocquer, 2010). equity occurs when the consumer is familiar with the brand and holds some favorable, strong attitude and unique brand associations in the memory (Kamakura and Russell, 1991). In 1994 the central bank of Iran authorized the creation of private credit institutions, and in 1998 authorized foreign banks (many of whom had already established representative offices in Tehran) to offer full banking services in Iran's free-trade zones Bank that caused more competition in banking sector in Iran and in the situation, for Bank Melli Iran(BMI), the first Iranian commercial and the biggest, evaluation and priority of equity dimensions from customer viewpoint is very importance. Therefore purpose of the study was to determine the brand equity level in banking industrial, specifically Melli bank as the biggest bank in Iran (over 3300 branches and 43,000 employees) and also prioritizing dimensions of brand equity by using Entropy method. The remainder of the paper is organized as follows: first, the concept of brand equity is defined then its dimensions and importance explained. Second was methodology included obectives, samples, reliability and validity. Third, by using statistics tests examined hypotheses and then ranking dimensions of brand equity by Entropy and Finally conclusion. 1- This research was sponsored by Islamic Azad University, Chalous branch. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 395

2 2. LITERATURE REVIEW: 2-1. BRAND EUITY AND ITS DIMENSIONS: A review of the literature identifies a variety of definitions or views with respect to brand equity. While brand equity is retained by, and therefore enhanced for, the brand s owner there are generally considered two perspectives, namely financial or consumer. It is from either of these approaches that the definition of brand equity is articulated. Supporters of the financial perspective define brand equity as the total value of a brand which is a separable asset when it is sold or included in a balance sheet. Measurement of brand equity, from this point-of-view, is articulated solely in monetary terms. Another term for this perspective is financial based brand equity. Conversely, customer based brand equity (CBBE), represents the consumer perspective of brand equity and can be defined as the differential effect that brand knowledge has on consumer response to the marketing of that brand ( King and Grace,2010). One approach to measuring brand equity as designed by Ukpebor & Ipogah (2008) indicates that equity consists of three dimensions: perceived quality, brand loyalty and brand image. - loyalty: loyalty is considered a main dimension of brand equity that has been defined as the attachment that a customer has to a brand (Aaker, 1991, p. 39). Loyalty is both attitudinal in terms of intent to purchase, and behavioral through word of mouth referrals and repeat purchase. Unfortunately, however, there is a lack of agreement about the scale items for each construct (Pike and et al., 2010). loyalty is effectively an intangible asset. These types of assets are a key component of firm performance and market value. A survey of the top 3,500 US companies indicates that intangible assets represent over 70 per cent of a company s market value. Furthermore, it is estimated that brand value represents between 40 and 75 of the firm s intangible assets (Oak and Dalbor, 2010). - image: image is anything linked in memory to a brand as proposed in the associative network memory model, in which memory consists of nodes and links (Pike and et al., 2010) Also can be defined as perceptions of an organization reflected in the associations held in consumer memory (Leone and et al. 2006). -Perceived quality: Perceived quality is defined as a consumer s evaluation of a brand s overall excellence based on both intrinsic cues (e.g. performance, durability) and extrinsic cues (e.g. brand name, warranty). When consumers perceive a brand to be of high quality, they are more likely to purchase the brand over competing brands, pay a premium price, and choose the brand (Lee and et al., 2010). Aaker and Jacobson (1994) investigate the possibility of a positive relationship between product quality and stock returns. They find a significant and positive correlation between stock returns and perceived quality measures. Moreover, they also find that in regard to the long-term implications of quality, quality can enhance a firm s longterm performance. This is subsequently reflected in the stock price. 2-2 ENTROPY: The entropy idea is particularly useful for investigating contrasts between sets of data.this method has it roots in information theory and was introduced in 1948 to provide a quantitative measure of the uncertainty represented by a discrete probability distribution (Taghizadeh and et al., 2012). The entropy method is the method used for assessing the weight in a given problem because, with this method, the decision matrix for a set of candidate materials contains a certain amount of information. In other words, the entropy method works based on a predefined decision matrix (Shanian & Savadogo, 2006). Entropy analysis is based on three measures: entropy (E), degree of divergence (d), and degree of influence or weight of importance (w) that this method consists of the following procedure (Abdolvand and Taghipouryan, 2011): COPY RIGHT 2013 Institute of Interdisciplinary Business Research 396

3 Step 1 : Normalizing the decision matrix : ri Pi i 1,2,..., I 1,2,..., m r i 1 i J Step2: Calculating the entropy with data for each criterion, the entropy of the set of normalized outcomes of the th criterion is given by: E m k [ p i 1 i ln( p i )] i 1,2,..., I 1,2,..., J Eq. (1) Eq. (2) d w Step 3: weights of criteria : 1 E d n 1 d Eq. (3) 3- METHODOLOGY: Based on the above this study has two main obectives: First obective: Measure brand equity level from viewpoint customers (high or low) Second obective: prioritizing each of three dimensions of brand equity. To achieve the above obectives, Questionnaire is applied in this research that is extracted from Ukpebor & Ipogah (2008). The questionnaire includes three dimensions and nineteen items. The samples include customers of Melli bank in Iran (branches of Caspian Sea margin) that is the biggest bank in Islamic countries. 420 questionnaires had been distributed that 16 of them (3.80%) hadn t been returned, 6 of them (1.42%) weren t completed and 398 of them were completed that were ready for analyzing. Demographic characteristics of respondents include percent of respondents were male and more than 70% of respondents were below 30 years old. In this study, Cronbach's Alpha has been used for determining reliability that shown in table (1 ).The result indicate the questionnaire from have good reliability. Insert Table (1) For determining validity, by using LISREL software, Confirmatory Factor Analysis (CFA) has been applied. The overall fit of the measurement model include NFI (0.91), NNFI (0.92), CFI (0.95) and RMSE (0.64) that shown the fit of the model was good. In CFA, if the factor loading of each item is above 0.5 so the item is acceptable Otherwise is deleted. According to figure (1), seven items (L6, I1, I2, I4, I7, Q3, Q6) were deleted. Insert figure (1) 4. RESULTS: The proposed hypotheses were tested using statistics tests via SPSS19. First, to determine Kind of test (parametric or non-parametric tests) should be used from Kolmogorov-Smirnov (KS). The results that the significance level of test was above 0.50 so parametric tests should be used. For first obective, namely, Measure brand equity level from viewpoint customers, binomial test is used. The results of the binomial test are displayed in table 2. As the table indicates, in all three dimensions of brand equity, significant amount of test was lower than and by %95. Also Mean value Higher than of 3 therefore could said that brand equity level of Melli bank from viewpoint customers was in acceptable level. Insert table (2) For calculating that which of three dimensions of brand equity is in accordance with customers a perception is allocated to higher level than, we applied Entropy method that showed Fig. 2. The weights for each of the dimensions are: brand loyalty (0.266), brand image (0.256), perceived quality (0.476). Insert figure (2) COPY RIGHT 2013 Institute of Interdisciplinary Business Research 397

4 5. CONCLUSION: According to the brand equity from customer perspective is investigated to understand the brand in the minds of customers and design effective marketing programs to build the brand so the study had two obectives that first purpose measure the brand equity level Melli bank as the biggest bank in Iran by using three dimensions and also prioritizing the dimensions by Entropy method. The results indicated that customer's loyalty and image to Melli bank is in acceptable level and perceived service quality of the bank in desirable level. The participants in this study have highest priority for perceived quality and have lowest weights for brand image. Melli Bank Authorities to enhance brand equity should be noted things as Fast and accurate service, Specialized and trained staff, note to Staff appearance, create Suitable space Branch. According to a more competitive banking industry in Iran, the result of the study could help managers of Melli bank specifically and others managers of State and Private Banks for maximizing the value of their brands on base customers viewpoint. On the other hand, about the limitations of the study should be noted that the study is limited to only a state bank in Iran. Thus, future research should attempt to examine perceptions differentials of customers in brand equity dimensions across many different banks categories. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 398

5 References: Abdolvand M. A. and Taghipouryan M. J. (2011). Evaluation of Customs Service Quality by Using Fuzzy SERVQUAL and Fuzzy MCDM. American Journal of Scientific Research, 35, Aaker, D. and Jacobson, R. (1994). The financial information content of perceived quality. Journal of Marketing Research, 31, Kimpakorn N. and Tocquer G. (2010). Service brand equity and employee brand commitment. Journal of Services Marketing, 24/5, Kim H.-b., Kim W. G.(2005). The relationship between brand equity and firms performance in luxury hotels and chain restaurants. Tourism Management, 26, King C. and Grace D. (2010). Building and measuring employee-based brand equity. European Journal of Marketing, 44(7/8), Lee H.J., Kumar A. and Kim Y.-K. (2010) Indian consumers brand equity toward a US and local apparel brand, Journal of Fashion Marketing and Management, 14 (3), Leone, R., V. Rao, K. Keller, A. Luo, L. Mcalister, and R. Srivastava, R., (2006). Linking Equity to Customer Equity. Journal of Service Research, 9(2), Oak S. and Dalbor M. C. (2010). Do institutional investors favor firms with greater brand equity?, international Journal of Contemporary Hospitality Management, 22(1), Pike S., Bianchi C. and Kerr G., Patti Ch. (2010) Consumer-based brand equity for Australia as a long-haul tourism destination in an emerging market, International Marketing Review,27 ( 4), Shanian, A. & Savadogo, O. (2006) TOPSIS multiple-criteria decision support analysis for material selection of metallic bipolar plates for polymer electrolyte fuel cell. Journal of Power Sources, 159, Taghizadeha H., Taghipourian M. J., khazaeic A. (2012).prioritization of customer satisfaction dimensions in the banking industry by using Entropy. Interdisciplinary ournal of contemporary research in business, 4(4), Ukpebor P.& Ipogah B. (2008).A study to indicate the importance of consumer based- brand equity on consumer perception of brand.master Thesis in Business Administration, Blekinge Tekniska Hogskola(BTH) COPY RIGHT 2013 Institute of Interdisciplinary Business Research 399

6 Dimensions loyalty image Perceived quality Number of items Cronbach s Alpha Table (1); Results of reliability by using Cronbach's Alpha equity Figure (1): Results of Confirmatory Factor Analysis by using LISREL COPY RIGHT 2013 Institute of Interdisciplinary Business Research 400

7 loyalty image Perceived quality Perceived quality Image Loyalty equity icrb.webs.com Category N Observed prop. Sig. Mean Std. Deviation Table (2); Results of the binomial test Three dimensions of equity E= D= W= E= D= W= E= D= W= Fig. 2: The Entropy results of three dimensions of equity COPY RIGHT 2013 Institute of Interdisciplinary Business Research 401