Academic journal article Journal of Management Research

Determinants of Customer-Based Retailer Equity: An Empirical Verification Approach from Indian Large Retail Market

Academic journal article Journal of Management Research

Determinants of Customer-Based Retailer Equity: An Empirical Verification Approach from Indian Large Retail Market

Article excerpt


The aim of this study is to examine and verify the applicability of customer-based brand equity model based on Aaker's well-known brand equity framework from customers' standpoint in the Indian large retailing. It is conceptualized that retailer equity is determined by four dimensions-retailer awareness, retailer associations, and perceived retailer quality and retailer loyalty. Mall intercept method is applied to choose and contact shoppers with the structured questionnaire at the outlets of large Indian retailers. A total of 312 valid and useable questionnaires are obtained, wherein responses are recorded on 5 point Likert-type scale, with 1 being strongly disagree and 5 strongly agree. Then, the analysis was carried out by Confirmatory Factor Analysis (CFA) and Structural Equation Modelling (SEM). Findings of this study reveal that except retailer awareness, all the other three retailer equity dimensions- retailer associations, perceived retailer quality and retailer loyalty have the positive and significant influence on overall retailer equity. Among these, retailer loyalty is found to be the most influential determinant of overall retailer equity. Thus, based up on the results, it was confirmed that Aaker's brand equity model is also applicable to the Indian large retail industry. Hence, retailers should consider relative importance of these dimensions while evaluating their overall equity. This study is of great interest for large retailers who wish to increase their brands' value proposition to the marketplace.

Keywords: Retailer equity, Retailer awareness, Retailer associations, Retailer perceived quality, Retailer loyalty, Structural equation modelling, India

1. Introduction

In recent years, with the emergence of private labels concept, retailers are making considerable effort to increase their customer based brand equity by engaging in various brand management activities. For example, retailers offer the market differential value with a view to stimulate customer loyalty and so on. Building retailer equity increases revenue and profitability by insulating retailers from competitors. Moreover, with the assortment of consumer needs and wants, retailers have been forced to create various sustainable competitive tactics. For this, retailers must have a good understanding of brand equity from the consumers' perspective (Taskin and Akat, 2010). Customer based retailer equity plays a strategic role in determining customers' purchase decisions and considered as the most important concept in business and academic research (Kim, Kyung Hoon, et al. 2008) because a positive customer-based retailer equity can help retailers in many ways, for example, it generates greater revenue, lower the sourcing or manufacturing costs, and increases profits and it will enhance the firm's ability to expertise and charge more and premium prices, and ultimately leads to the attainment of brand extensions (Keller, 2003). Hence, understanding the customer based brand equity will help brand managers in gaining competitive advantage over competitor brands and make wise management decisions. The necessity for substantial evidence of consumer-based equity conception has directed to the improvement of an extensive varied brand equity models. Thus, this study is aimed to verify and examine the applicability and practicality of the Aaker's well-known customer based brand equity framework.

2. Review of Literature

2.1 Retailer Awareness

Brand awareness is the first and foremost important component of brand equity (Aaker, 1991; Keller, 1993), it plays a prominent role in purchase intention as consumers like to buy a product with which they aware of (Keller, 1993; Macdonald, E. K., & Sharp, B. M., 2000). Keller (1993) points out that brand awareness further comprises two sub-dimensions: one is brand recall and the other is recognition. Brand recognition plays a prominent role in forming brand communication, in turn it helps a firm to communicate attributes related to the product with which to associate them till a brand name is recognized. …

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