Role of Customer Based Brand Equity On brand Market Performance In The Banking Service Sector In Kenya

Abstract

Firms aspire to achieve strong brand equity because brand equity is believed to be an important measure of brand success. Strong brand equity is critical because its perceptions affect both financial and non-financial performance results of an organization. A plethora of theoretical literature suggests that customer-based brand equity (CBBE) attracts new customers to the firm, reminds the customers about the organization’s products and services and is a customer’s emotional tie to the organization ultimately contributing to the overall performance of the brand in the market. However, there is a paucity of empirical research that explores the link between the dimensionality of customer-based brand equity metrics and brand market performance in any sector, let alone the banking sector in Kenya. The general objective of this study is to examine the role of customer-based brand equity on the market brand performance in the services sector in Kenya. Specifically, the study analyses the effects of, brand awareness, brand association, perceived quality and customer brand loyalty on market brand performance. Target population comprised 25.3 million bank account holders and managers of 44 commercial banks in Kenya. An optimum sample of 400 account holders at 95% confidence level was selected to participate in the study through probability proportionate to size sampling techniques, while branch managers of the 44 banks were automatically included in the study. Two sets of quantitative survey questionnaires, one for the corporate customers and the other for branch managers were used to collect primary data. The corporate customers’ questionnaire was validated through piloting on a sample small sample of 40 customers and 4 on branch managers, who were not be part of the actual sample. The Cronbach alpha correlation coefficient was run on the pilot sample to measure the degree of internal consistency of measurement scales as a test of reliability and all variables achieved Cronbach Values of greater than 0.70. Data analyses was done with the aid of Ms Excel, Statistical Package for Social Scientists (SPSS Version 23) and Analysis of Moment Structures (AMOS Version 23). Descriptive statistics has been used to summarize the data, establish characteristics of the study population and describe response concentrations and variations on CBBE measures. The predictor powers and moderation effect of the CBBE variables on brand market performance was tested by conducting a moderated regression analyses. Results show that relationship between overall brand awareness as a component of CBBE and overall market brand performance was positive and significant (r = .413; p = .014; N=382), brand associations were positively and significantly correlated to overall market brand performance (r = .555; p = .001; N=382), the relationship between perceived quality and overall market brand performance was positive and statistically significant (r=.525; p=.001; N=382) and overall brand loyalty had positive and significant relationships with overall brand market performance (r=.578; p=.000; N=382). Generally, the study concludes the customer based brand equity plays a significant role in overall market brand performance as measured on the basis of brand awareness, brand association, perceived quality and customer brand loyalty. Consequently the study recommends that service firms and extensionally manufacturing firms should strive to build brand loyalty based not only on customers but also financial and employee brand equity. In addition, managers should endeavor to realize high level of brand resonance which signifies strong brand loyalty and ultimately contribute to corporate competitiveness and market brand performance