Measurement of Brand Equity of Services - Scale Construction and Validation

Article excerpt

This paper describes the construction and validation of a 21 item scale for measuring brand equity in services. The procedure suggested by Churchill (1979) is followed. The scale is composed of four sub scalesbrand familiarity, perceived quality, brand loyalty, and brand association. The proposed scale is aimed at assisting brand managers in tracking the equity of the services offered by their organisations. Three types of validity are assessed - convergent validity, divergent validity and nomological validity. For constructing this scale data was collected from consumers for three services viz. banking, insurance and cellular services.

INTRODUCTION

Brand equity is the capacity of a branded product or service to earn more benefits than the un-branded competitor in the same product or service category. The benefits include ability to charge price premium, competitive advantage, easy brand extension and reduction in brand management cost.

The present research is aimed at construction and validation of a multi item scale to measure brand equity of services. The study derives its importance from the importance of brand equity and the lacunae in existing research on measurement of brand equity in services. Malhotra et al.(1999) wrote in their note on research directions for the twenty- first century 'Brand management research should focus on further refinement and measurement of the brand equity construct. As researchers and practitioners strive to assess the strategic importance of brand equity, their progress might be impeded without a unified definition and thus externally valid construct. A generally accepted measure can further the overall understanding of the strategic role brand equity plays in not only extending the brand but also financially benefiting the brand'.

The need for this research has arisen because the limited research on brand equity of services, while laudable, contains some shortcomings with respect to measurement of brand equity. The earliest published research on brand equity in services that was located is Berry (2000). Other work in this field has been Chernatony and Harris (2001), Kim and Kim (2004), Krishnan and Hartline (2001) and Mackay (2001a, 2001b). Some authors have ignored the major constituents of brand equity and preferred to use the minor, less significant constructs of brand equity in their scales. Many authors have not tested the validity of the scales prepared and used by them. Some authors have used single item measures. Multi item measures, like the one developed in this research effort, have an advantage over single item measures. They are able to measure the various aspects of a multi faceted construct. They also produce more reliable results. The literature on marketing of services, it is felt, will gain from research on measurement of brand equity.

The scale construction framework suggested by Churchill (1979) was used viz. specifying the domain of construct, generating sample of items, purifying the measure, assessing construct validity, and developing norms. The whole process was spread over one exploratory study, two pilot studies and one final study.

BRAND EQUITY DEFINED

Wood (2000) contains a comprehensive account of the definitions of brand equity. Leuthesser (1998) is identified as the first one to give a significant definition of brand equity. According to Leuthesser (1998; as in Wood (2000) brand equity is, "The set of associations and behaviour on the part of a brand's customers, channel members, and parent corporation that permits the brand to earn greater volume or greater margins then it could without brand name".

Aaker (1991) defines brand equity as 'A set of brand assets and liabilities linked to a brand, its name and symbol that adds to or detracts from the value provided by a product or service to a firm and / or to the firm's customers'. This definition implies that brand equity of a particular brand can be positive as well as negative. …