Academic journal article The International Journal of Business and Finance Research

The Relationship between Brand Image and Purchase Intention: Evidence from Award Winning Mutual Funds

Academic journal article The International Journal of Business and Finance Research

The Relationship between Brand Image and Purchase Intention: Evidence from Award Winning Mutual Funds

Article excerpt

ABSTRACT

Mutual funds represent one of the most popular investment instruments. Some institutions offer fund awards to recognize strong performing funds and fund groups that have shown excellent returns relative to their peers. Many fund companies also use awards won in their advertising and marketing material. This brings rise to the question: Do investors think award winning funds have a better brand image? Can awards increase investors' purchase intention? The purpose of this study is to investigate the relationships and effects of brand image, perceived quality, perceived risk, perceived value, and purchase intention, as well as to examine the effects of demographic variables on these five dimensions. The research findings show significant relationships between brand image, perceived quality, perceived value, and purchase intention. In addition, some demographic variables may lead to significant differences in these five dimensions. Finally, the results from structural equation modeling show that there are positive and direct effects among brand image, perceived quality, perceived value, and purchase intention. Brand image indeed increases investors purchase intentions. The purchase intention is affected mainly by perceived quality, not by perceived risk.

JEL: Gl, Ml, M5

KEYWORDS: Brand Image, Perceived Quality, Perceived Risk, Perceived Value, Purchase Intention

Ya-Hui Wang, National Chin-Yi University of Technology

Cing-Fen Tsai, National Chin-Yi University of Technology

INTRODUCTION

Mutual funds are one of the most popular investment instruments today. Many investors are interested in mutual funds, because they have many advantages: professional management, high liquidity, diversification, minimum amount of cash needed, etc. However, there exists a vast array of mutual funds. The most important issue is how to choose a good fund for investment to increase one's wealth.

Some institutions hold fund awards to recognize strong performing funds and fund groups that have shown excellent yearly returns relative to their peers. Examples include, the TFF-Bloomberg Best Fund Awards, the Morningstar Fund Awards, and the Lipper Fund Awards. Many fund companies use awards won in their advertising and marketing material, bringing rise to a question: Do investors think awarded funds have a better brand image? Brand image is often used as an extrinsic cue when consumers evaluate a product before purchasing (Zeithaml, 1988; Richardson, Dick and Jain, 1994). As such, from the viewpoint of fund companies, does this branding work? Can it really increase investors' purchase intention?

Consumers are more likely to purchase well-known brand products with a positive brand image, because a brand with this image has the effect of lowering consumers' perceived risks (Akaah and Korgaonkar, 1988; Rao and Monroe, 1988) or increasing consumers' perceived value (Loudon and Bitta, 1988; Fredericks and Slater, 1998; Romaniuk and Sharp, 2003). Thus, will investors choose awarded funds as their investment target? How do investors feel about awarded funds? Does an awarded fund really see a better brand image? Higher perceived quality? Lower perceived risk? Higher perceived value?

Previous studies on awarded funds have focused on performance persistence by taking secondary data from the financial market. Little or no research has investigated investors' purchase intentions of awarded funds directly through questionnaires. Our study attempts to fill this gap. This paper studies relationships between awarded fluids ' brand image, perceived quality, perceived risk, perceived value, and purchase intention using questionnaires. The aims of this study are: (1) to investigate the relationships and effects of brand image, perceived quality, perceived risk, perceived value, and purchase intention; (2) to analyze the differences between investors with different demographic variables in brand image, perceived quality, perceived risk, perceived value, and purchase intention; (3) to analyze the implications of these results. …

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