measurement of brand equity of services

Journal of Services Research, Volume 11, Number 2 (October 2011 - March 2012)©2011 by Institute for International Management and Technology. All Rights Reserved.

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

MEASUREMENT OF BRAND EQUITY OF SERVICES -SCALE CONSTRUCTION AND VALIDATION

INTRODUCTION

Brand equity is the capacity of a branded product or service toearn more benefits than the un-branded competitor in the sameproduct or service category. The benefits include ability to

charge price premium, competitive advantage, easy brand extensionand reduction in brand management cost.

The present research is aimed at construction and validation of amulti item scale to measure brand equity of services. The study derivesits importance from the importance of brand equity and the lacunae inexisting research on measurement of brand equity in services. Malhotraet al.(1999) wrote in their note on research directions for the twenty–first century ‘Brand management research should focus on furtherrefinement and measurement of the brand equity construct. Asresearchers and practitioners strive to assess the strategic importanceof brand equity, their progress might be impeded without a unifieddefinition and thus externally valid construct. A generally acceptedmeasure can further the overall understanding of the strategic role brandequity plays in not only extending the brand but also financiallybenefiting the brand’.

The need for this research has arisen because the limited researchon brand equity of services, while laudable, contains some shortcomingswith respect to measurement of brand equity. The earliest published

Pushpender Nath Anupam Bawa

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Journal of Services Research, Volume 11, Number 2 (October 2011 - March 2012)

136 Measurement of Brand Equity

research on brand equity in services that was located is Berry (2000).Other work in this field has been Chernatony and Harris (2001), Kimand Kim (2004), Krishnan and Hartline (2001) and Mackay (2001a,2001b). Some authors have ignored the major constituents of brandequity and preferred to use the minor, less significant constructs ofbrand equity in their scales. Many authors have not tested the validityof the scales prepared and used by them. Some authors have usedsingle item measures. Multi item measures, like the one developed inthis research effort, have an advantage over single item measures. Theyare able to measure the various aspects of a multi faceted construct.They also produce more reliable results. The literature on marketing ofservices, it is felt, will gain from research on measurement of brandequity.

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

BRAND EQUITY DEFINED

Wood (2000) contains a comprehensive account of the definitions ofbrand equity. Leuthesser (1998) is identified as the first one to give asignificant definition of brand equity. According to Leuthesser (1998;as in Wood (2000) brand equity is, “The set of associations andbehaviour on the part of a brand’s customers, channel members, andparent corporation that permits the brand to earn greater volume orgreater margins then it could without brand name”.

Aaker (1991) defines brand equity as ‘A set of brand assets andliabilities linked to a brand, its name and symbol that adds to or detractsfrom the value provided by a product or service to a firm and / or to thefirm’s customers’. This definition implies that brand equity of a particularbrand can be positive as well as negative. This is a very popular andoften quoted definition of brand equity.

Brand Equity in Services

For long, research in marketing has focused more on goods than onservices. This is true for brand equity also (Sharp, 1995).





137 Nath, Bawa

There are well established differences between goods and services(Zeithaml et al.,1985; Bitner,1990; Mackay 2001a, 2001b). Thesedifferences necessitate that measures for brand equity in services bedifferent for those used for goods.

Berry (2000) is of the view that in case of tangibles, the productrepresents the brand but in case of intangibles, the whole company istreated as the brand. The author proposes a brand equity model forservices, in which there is a direct relationship between customerexperience, brand meaning, and brand equity.

But from time to time the opposite view is also heard. The minorityview is that marketing of goods and services need not be different(Beaven and Scotti, 1990; Mohammad and Ahmed, 1995) and thatbrand equity is less important in services as compared to goods(Krishnan and Hartline, 2001).

RESEARCH METHODOLOGY

The three services included in the scope of the research are commercialbanking, life insurance and cellular mobile services.

At the outset an exploratory study was conducted to find the mostimportant attributes that people consider while purchasing the threeservices. The attributes were required to calculate a multi-attribute scorefor the brands. This was to be used to assess divergent validity of thescale at a later stage. The exploratory study was conducted in andaround Chandigarh during July-August 2004. Seventy eight usablequestionnaires were obtained.

Non-random sampling was used for this study. The questionnairesinquired from the respondants about aspects related to the sub scales ofbrand equity scale as well as the scales that were to be used for validityestimation. The geographical area for the study was Chandigarh, Delhi,and Ambala (three different cities in North India). The survey was conductedfrom January to March 2005. Completed questionnaires were collectedfrom 97 different people and they could produce 226 different cases. Eachbrand for which a respondent gave information was treated as a separatecase.

As the first pilot study could not produce a good scale for brandequity it was decided to go back to the initial stage of scale constructionas suggested by Churchill (1979). The second round of pilot studybegan with a review of additional literature especially for the scales on






brand familiarity, brand loyalty, and perceived quality. Judgementsampling technique was used in the second pilot study. A consciousattempt was made to obtain a heterogeneous sample. The survey forthe second pilot study was conducted during October 2005 to December2005. Seventy questionnaires were obtained from employees of variousorganisations located in Chandigarh, Delhi, Ambala and Gurgaon (fourdifferent cities in North India).

The final study was conducted to test the brand equity scaleconstructed in the pilot studies. Data was collected from those employeesof organisations who were at least 18 years of age or above, andunderstand English. Multi stage cluster sampling was used to randomlyselect organisations and then departments within the organisation. Datawas collected from all the available employees in the selectedorganisation /department. Random number table was used for selectionsat all the stages. Data were collected during August 2006 to December2006 at Chandigarh, Delhi, Ambala and Gurgaon. A total of 319 usablequestionnaires were obtained.

Acceptable values were decided for different statistics based onreview of literature (Malhotra, 2004) viz. minimum 0.6 for cronbachalpha; minimum 0.5 for correlation coefficients, KMO test value,communalities, and factor loadings; and minimum 60% for cumulativesum of squared loadings. The maximum acceptable p value for t testand Bartlett’s test was taken as 0.05.

SCALE FOR BRAND EQUITY AND ITS COMPONENTSThis section contains the scale construction process for the four subscales constituting the brand equity scale and the total brand equityscale .The four sub scales are brand familiarity, perceived quality, brandloyalty and brand association.

The description of the scale construction for brand leadership isalso given – at the end of the section. The brand leadership scale hasbeen constructed to help in testing the nomological validity of the brandequity scale.

Scale for Brand FamiliarityAt the start of the first pilot study the researchers explored literature onbrand familiarity and identified three items for inclusion. The itemswere ‘I am familiar with the brand’ (Aggarwal and Rao, 1996; Mackay,2001a, 2001b), ‘I can quickly recall the logo / symbol of the brand’(Keller, 1993; Yoo et al., 2000; Yoo and Dhontu 2001, 2002). Thenegatively worded version of the first item was also added viz. ‘I amnot very familiar with the brand’.





139 Nath, Bawa

However, the results obtained were unsatisfactory. Only the item‘I am familiar with the brand’ was found fit for inclusion in thesubsequent version of the scale.

In the second pilot study the four items used were ‘I am familiarwith the brand’, ‘I have heard of the brand’(Leo and Lehman ,1973)and two items recommended by Eagle (1999) viz. ‘I have heard of thebrand’ and ‘I can express my opinion about the brand’.

The results obtained were better than those obtained earlier butthey had some deficiencies. As the deficiencies were not major, it wasdecided not to change the scale at this stage.

The brand familiarity scale finalised in the second pilot study wastested again with the help of data collected in the final study. The scaleitems were analysed for three services individually and collectively.

Table 1: Analysis of Brand Familiarity Scale - Final StudyScale items

Cron-bach alpha – if

item is deleted

Inde-pendent sample t test – p value

Items to total

correlation

Factor analysis results Eigenvalues > 1

Factor loadings

Communalities

Other Results

Commercial Banking (N=136; Cronbach Alpha = 0. 8490)

Familiarity 0.8037 0.000 0.839 0.770 0.593 No. of factors = 1 KMO test value = 0.8 Bartlett’s test p value = 0 Cumulative sum of squared loadings = 59.543%

Knowledge 0.7717 0.000 0.878 0.876 0.767

Heard of 0.8347 0.000 0.773 0.688 0.474

Can express Opinion

0.8197 0.000 0.835 0.740 0.547

Life Insurance (N=93; Cronbach Alpha = 0. 8290)

Familiarity 0.7774 0.000 0.818 0.763 0.582 No. of factors = 1 KMO test value = 0.765 Bartlett’s test p value = 0

Cumulative sum of squared loadings = 56.422%

Knowledge 0.7249 0.000 0.888 0.917 0.842

Heard of 0.8111 0.000 0.788 0.656 0.430

Can express Opinion

0.8153 0.000 0.757 0.635 0.403

Cellular Mobile Services (N=99; Cronbach Alpha =0. 7172)

Familiarity 0.5904 0.000 0.795 0.803 0.645 No. of factors = 1 KMO test value = 0.660 Bartlett’s test p value = 0 Cumulative extraction sum of squared loadings = 45.58%

Knowledge 0.5595 0.000 0.826 0.869 0.755

Heard of 0.7530 0.000 0.655 0.411 0.169

Can express Opinion

0.7056 0.000 0.698 0.504 0.254

Total Data (N=328; Cronbach Alpha =0. 8197)

Familiarity 0.7561 0.000 0.826 0.774 0.599 No. of factors = 1 KMO test value = 0.784 Bartlett’s test p value = 0

Cumulative extraction sum of squared loadings = 54.918%

Knowledge 0.7207 0.000 0.870 0.884 0.782

Heard of 0.8141 0.000 0.744 0.611 0.373 Can express Opinion

0.7964 0.000 0.787 0.665 0.443

As shown in Table 1 the brand familiarity scale produced good results






in the final study for commercial banking. The scale produced acceptableresults for life insurance also with exception that communalities for twoscale items were less than 0.5, and ‘cumulative extraction sum of squaredloadings’ was less than 60%, but the deficiency was not very large. Thebrand familiarity scale produced mixed results for cellular mobile services.The communality for two scale items was less than 0.5. Similarly, thefactor loading for one item was less than 0.5, and the value of ‘cumulativesum of squared loadings’ was less than 60%.

The scale produced acceptable results in aggregate level analysis,but with minor aberrations. The communalities for two scale items werelower than 0.5, and the ‘cumulative extraction sum of squared loadings’was less than 60%.

It was decided to ignore such individual aberrations because theother results of the scale remained good.

Scale for Perceived Quality

Three items were identified for inclusion in the perceived quality scalein the first pilot study viz. ‘The brand provides high quality services’,‘The brand provides reliable services’, and ‘I feel that the brand providespoor quality services’. The selected items have been previously usedby Yoo et al. (2000), Yoo and Dhontu (2001, and 2002).

In the first pilot study the scale item ‘poor quality’ proved errant .Therefore, it was decided to delete it and add some other items in thescale.

In the second pilot study literature was explored to generate newitems for the scale. Victor et al. (2001) was especially helpful. It wasdecided to follow the SERVQUAL model for additional items. But asSERVQUAL is a large scale, it was decided to use only one scale itemfor each factor of the model. A seven item scale was prepared. Theseven items were about ‘up to date equipments’, ‘achieve deadlines’,‘prompt service’, ‘polite sales force’, ‘personal attention to thecustomer’, ‘high quality services’, and ‘reliable services’.

The perceived quality scale produced acceptable / nearly acceptableresults in the second pilot study for the three services and aggregateversion of the analysis. It was decided to use the scale for the finalstudy.

Table 2 presents a summary of analysis for ‘perceived quality scale’obtained in the final study.





141 Nath, Bawa

Table 2: Analysis of Perceived Quality Scale - Final StudyScale items


item is deleted


Items to total

correlation


Factor loadings

Communalities

Other Results

Commercial Banking (N=136; Cronbach Alpha = 0.8849)

Equipments 0.8796 0.000 0.682 0.612 0.374 No. of factors = 1 KMO test value = 0.856 Bartlett’s test p value = 0 Cumulative sum of squared loadings = 52.92%

Deadlines 0.8773 0.000 0.714 0.640 0.409 Prompt service 0.8634 0.000 0.799 0.767 0.589 Polite employees 0.8543 0.000 0.850 0.841 0.707

Personal attention 0.8688 0.000 0.776 0.725 0.525

High quality 0.8637 0.000 0.797 0.761 0.580

Reliable 0.8684 0.000 0.762 0.722 0.521

Life Insurance (N=93; Cronbach Alpha = 0.8456)


Deadlines 0.8263 0.000 0.701 0.644 0.415

Prompt service 0.8205 0.000 0.743 0.691 0.478

Polite employees 0.8275 0.000 0.720 0.650 0.422


High quality 0.8260 0.000 0.704 0.648 0.420 Reliable 0.8274 0.000 0.693 0.638 0.406

Cellular Mobile Services (N=99; Cronbach Alpha = 0.9042)


Deadlines 0.8880 0.000 0.809 0.774 0.599

Prompt service 0.8786 0.000 0.876 0.870 0.757



High quality 0.8858 0.000 0.825 0.800 0.639

Reliable 0.8929 0.000 0.775 0.728 0.531

Total Data (N=328; Cronbach Alpha = 0.8836)

Equipments 0.8801 0.000 0.679 0.596 0.356 No. of factors = 1 KMO test value = 0.881 Bartlett’s test p value = 0 Cumulative extraction sum of squared loadings = 52.409%

Deadlines 0.8710 0.000 0.737 0.678 0.459

Prompt service 0.8595 0.000 0.814 0.786 0.618



High quality 0.8632 0.000 0.788 0.753 0.567

Reliable 0.8682 0.000 0.753 0.708 0.501

As can be seen in Table 2 the perceived quality scale has produced

good results for commercial banking , cellular mobile services and total






data. Only one or two communalities are less than 0.5 and the cumulativesum of squared loadings is somewhat less than 60 percent. It has givenby and large acceptable results for life insurance also though thecumulative sum of squared loadings is less than 60 percent and most ofthe communalities are less than 0.5. But it was decided to retain all theseven items for the scale. It was decided to look at the results in totalityand not focus on individual results not meeting the cut off.

SCALE FOR BRAND LOYALTY

A review of literature on brand loyalty was conducted in the firstpilot study. The six items used in the scale were about frequent user,regular user, satisfied user, non-price loyalty, and ability to wait incase of stock out. The results obtained in the first pilot study werevery discouraging. It was plagued with problems like low item tototal correlation, low communalities, low factor loadings etc.

Going to different and older sources of literature it was foundthat Jacob and Olson (1970) had done an extensive literature researchand proposed a conceptual and operational definition of brand loyalty.Seven statements were framed based on their brand loyalty definition.The statements were used and tested in second pilot study. The resultsobtained in this round were much better than those obtained in theprevious round. A few of the factor analysis results did not meet thecut offs set but it was decided to keep all the seven items for thescale.

The brand loyalty scale produced in second pilot study was used andtested in final study. Table 3 presents a summarised analysis of brandloyalty scale in the three services individually and for the total data.

Table 3: Analysis of Brand Loyalty Scale - Final Study

Scale items


item is deleted


Items to total

correlation


Factor loadings Communalities

Other Results


Regular use 0.8453 0.037 0.592 0.582 0.353 No. of factors = 2 (a,b) KMO test value = 0.818 Bartlett’s test p value = 0 Cumulative sum of squared loadings = 57.860%

Intend to use again 0.8148 0.000 0.795 0.928 0.926

First preference 0.8122 0.000 0.806 0.614 0.516 0.643

Satisfaction 0.8168 0.000 0.785 0.483 0.589 0.581 Recommendation 0.8142 0.000 0.797 0.483 0.605 0.599

Non switcher 0.8414 0.000 0.667 0.674 0.475

Non price loyalty 0.8444 0.002 0.672 0.671 0.474





143 Nath, Bawa

Scale items


item is deleted


Items to total

correlation


Factor loadings Communalities

Other Results




First preference 0.7561 0.000 0.781 0.799 0.661

Satisfaction 0.7518 0.000 0.797 0.789 0.665

Recommendation 0.7595 0.000 0.768 0.706 0.547

Non switcher 0.7850 0.000 0.690 0.424 0.407 0.345 Non price loyalty 0.8376 0.000 0.515 0.857 0.737

Cellular Mobile Services (N=99; Cronbach Alpha = 0.7826)




Satisfaction 0.7358 0.000 0.731 0.628 0.536

Recommendation 0.7158 0.000 0.801 0.763 0.703

Non switcher 0.7301 0.000 0.755 0.744 0.581


Total Data (N=328; Cronbach Alpha = 0.8263)

Regular use 0.8273 0.000 0.558 0.587 0.350 No. of factors = 2 (a,b) KMO test value = 0.843 Bartlett’s test p value = 0 Cumulative extraction sum of squared loadings = 53.432%



Satisfaction 0.7865 0.000 0.774 0.546 0.527 0.575

Recommendation 0.7827 0.000 0.790 0.518 0.573 0.597

Non switcher 0.8054 0.000 0.700 0.672 0.500


As can be seen in Table 3 the results are moderately good. Forthe three services and the total data, the cumulative sum of squaredloadings was less than 60 percent but was above 50 percent, and thenumber of communalities and factor loading that were less than0.5 range from one to three items only. However, very good resultshave been obtained for cronbach alpha, t test , i tem to totalcorrelation. The two factors that have emerged are ‘satisfied user’(factor a), and ‘biased purchase behaviour’ (factor b). Five scaleitems are loaded on the factor ‘a’ viz. regular use, intent to useagain, first preference, satisfaction, and recommendation. Two scaleitems are loaded on the factor ‘b’ viz. non switcher, non-price loyalty.






It was decided to forgo the minor aberrations in the scale item ‘nonprice loyalty’ and the seven item scale was recommended to beused for brand loyalty measurement.

SCALE FOR BRAND ASSOCIATIONSAaker (1996) suggested that brand association can be measured bymeasuring organisational associations and perceived differentiation.Therefore in the first pilot study, two scale-items were selected fororganisational associations viz. ‘trust the brand’ and ‘admire thebrand’. Similarly two i tems were selected, for perceiveddifferentiation, viz. ‘brand is different from others’ and ‘brand isno different from others’.

Results of the first pilot study showed that the negatively wordeditem ‘brand is no different from others’ was not suitable. Once thatitem was removed acceptable results were achieved. It was decidedto retain these three items for the second pilot study.

Even in the second pilot study, the scale for brand associationsperformed well. The brand association developed and tested in pilotstudies, was used and tested in the final study. Table 4 presents theanalysis of the brand association scale in the final study for thethree services and for the total data.

Table 4: Analysis of Brand Association Scale - Final StudyScale items


item is deleted


Items to total

correlation


Factor loadings

Communalities

Other Results


Trust 0.7906 0.000 0.848 0.773 0.598 No. of factors = 1 KMO test value = 0.720 Bartlett’s test p value = 0 Cumulative sum of squared loadings = 63.932%

Unique 0.7968 0.000 0.872 0.761 0.579

Admire 0.7321 0.000 0.890 0.861 0.741


Trust 0.7595 0.000 0.799 0.671 0.450 No. of factors = 1 KMO test value = 0.662 Bartlett’s test p value = 0 Cumulative sum of squared loadings = 58.19% Unique 0.6074 0.000 0.893 0.928 0.861

Admire 0.7617 0.000 0.827 0.659 0.434

Cellular Mobile Services (N=99; Cronbach Alpha =0.7295)

Trust 0.5945 0.000 0.815 0.767 0.588 No. of factors = 1 KMO test value = 0.656 Bartlett’s test p value = 0 Cumulative sum of squared loadings = 49.759 %

Unique 0.7489 0.000 0.773 0.540 0.291

Admire 0.5807 0.000 0.834 0.783 0.613

Total Data (N=328; Cronbach Alpha =0.7959)

Trust 0.7328 0.000 0.825 0.740 0.547 No. of factors = 1 KMO test value = 0.708 Bartlett’s test p value = 0 Cumulative sum of squared loadings = 56.967%

Unique 0.7391 0.000 0.848 0.727 0.528

Admire 0.6936 0.000 0.858 0.796 0.633





145 Nath, Bawa

As can be seen in Table 4 the scale performance in final study, forbanking, is very good. All the results are well within acceptable limits.The scale results are acceptable for life insurance and cellular mobileservices too. There is a minor problem with factor analysis in the twoservices. One scale item has communality less than 0.5, and the‘cumulative sum of squared loadings’ is slightly less then 60%.The scaleshows acceptable results for total data. However, the ‘cumulative sum ofsquared loadings’ is less then 60%. Overall, the scale works very wellfor the three services individually and collectively.

Brand Equity ScaleThe brand equity scale was analysed in the second pilot study and thefinal study. Rating scores on brand familiarity scale, perceived qualityscale, brand loyalty scale, and brand associations scale were added toget the brand equity score.

Table 5 presents a summarised analysis of brand equity scale fortotal data in the second pilot study.Table 5: Analysis of Brand Equity Scale for Total Data - Second Pilot

StudyScale items (Cronbach

alpha of scale = 0.9160)Cron-bach

alpha if item is deleted


Item to total

correlation


Factor loadings* Com-munaliti

es

Other results

a b C d

Familiarity 0.915 0.001 0.468 0.774 0.646 No. of factors = 4 (a,b,c,d) KMO test value= 0.843 Bartlett’s test p value = 0 Cumulative extraction sum of squared loadings = 56.875%

Knowledge 0.915 0.000 0.430 0.856 0.751 Heard of 0.915 0.000 0.444 0.723 0.577 Opinion 0.916 0.000 0.377 0.555 0.345 Equipments 0.914 0.000 0.535 0.303 0.691 0.576 Deadlines 0.910 0.000 0.698 0.458 0.458 Prompt service 0.911 0.000 0.652 0.713 0.575 Polite employees 0.913 0.000 0.589 0.843 0.737 Personal attention 0.913 0.000 0.593 0.700 0.579 High quality 0.910 0.000 0.723 0.716 0.723 Reliable 0.908 0.000 0.784 0.575 0.652 Regular use 0.911 0.000 0.675 0.499 0.300 0.348 0.485 Continuous use 0.912 0.000 0.605 0.535 0.438 First preference 0.909 0.000 0.735 0.695 0.642 Satisfaction 0.908 0.000 0.775 0.502 0.610 Recommendation 0.907 0.000 0.807 0.542 0.659 Non switcher 0.913 0.000 0.590 0.551 0.428 Non-price loyalty 0.916 0.000 0.537 0.633 0.421 Trust the brand 0.911 0.000 0.668 0.647 0.271 0.562 Unique brand 0.918 0.002 0.410 0.446 0.270 Admire the brand 0.908 0.000 0.795 0.684 0.810

Note: Total 85 cases were used for analysis.*For three variables, loadings on more than one factor have been reported. Their highest loadinghas been on a factor other than the factor on which other items of their sub-scale loaded.






As shown in Table 5, the brand equity scale produced acceptable results.The value of cronbach alpha, and p values of t test were well withinacceptable limits. Five scale items got less than 0.5 correlationcoefficients with the scale total but all the coefficients were significantat 0.000 level of significance. Most of the factor loadings were abovethe minimum acceptable level. Most of the scale-items were loaded onthe factors as expected. The factor ‘a’ was named ‘perceived quality’,factor ‘b’ was named ‘brand loyalty’, factor ‘c’ was named ‘brandfamiliarity’, and factor ‘d’ was named ‘brand associations’.

However, three scale-items did have their highest loading on factorsdifferent from their expected factor. These items are ‘equipment’,‘regular use’ and ‘trust’. There were minor deficiencies in communalitiesand cumulative extraction of squared loadings as well.

The small aberrations in factor analysis were ignored and the 21item scale was recommended for measuring brand equity of services.It was used in the final study. Table 6 presents a summarised analysisof brand equity scale for total data in the final study.

Table 6: Analysis of Brand Equity Scale for Total Data - Final StudyScale items (Cronbach

alpha = 0.9336) Cron-bach

alpha if item is deleted


Item to total

correlation


Factor loadings* Com-munaliti

es

Other results

a b C d

Familiarity 0.9315 0.000 0.591 0.737 0.633 No. of factors = 4 (a,b,c,d) KMO test value = 0.938 Bartlett’s test p value = 0 Cumulative extraction sum of squared loadings = 55.144%

Knowledge 0.9320 0.000 0.561 0.843 0.754 Heard of 0.9326 0.000 0.528 0.554 0.424 Opinion 0.9317 0.000 0.585 0.598 0.483 Equipments 0.9305 0.000 0.653 0.355 0.395 0.398 Deadlines 0.9301 0.000 0.671 0.511 0.449 Prompt service 0.9298 0.000 0.692 0.746 0.653 Polite employees 0.9297 0.000 0.695 0.793 0.709 Personal attention 0.9298 0.000 0.692 0.647 0.557 High quality 0.9285 0.000 0.752 0.572 0.596 Reliable 0.9293 0.000 0.717 0.495 0.516 Regular use 0.9324 0.000 0.549 0.449 0.436 Continuous use 0.9289 0.000 0.738 0.681 0.666 First preference 0.9292 0.000 0.720 0.630 0.585 Satisfaction 0.9282 0.000 0.770 0.539 0.621 Recommendation 0.9288 0.000 0.736 0.568 0.598 Non switcher 0.9322 0.000 0.588 0.524 0.443 Non-price loyalty 0.9357 0.000 0.479 0.658 0.483 Trust the brand 0.9292 0.000 0.729 0.551 0.564 Unique brand 0.9306 0.000 0.648 0.472 0.419 Admire the brand 0.9284 0.000 0.761 0.533 0.592

Note: Total 328 cases were used for analysis.*For one variable, loading on more than one factor have been reported. Their highest loadinghas been on a factor other than the factor on which other items of its sub-scale loaded.





147 Nath, Bawa

As presented in Table 6, most of the item purification testsproduced acceptable results for brand equity scale in the final study.The value of cronbach alpha, and p values of t test were well withinthe acceptable norms. The values of item to total correlation coefficientfor all the items except ‘non-price loyalty’ were above 0.5 andsignificant at 0.000 level of significance. The value for ‘non priceloyalty’ is only a little below the cut off.

All the scale items of sub-scale perceived quality were loaded onthe factor ‘a’, with minor deviation in the scale item ‘equipments’.The scale-items for brand associations loaded on the factor ‘b’ alongwith five items of the scale on brand loyalty. All the scale items forbrand familiarity were independently loaded on the factor ‘c’. Twoscale items from brand loyalty factor were loaded on the factor ‘d’.

Thus factor ‘a’ is named as ‘perceived quality’, factor ‘b’ is namedas ‘brand loyalty (a) and brand associations’, factor ‘c’ is named as‘brand familiarity’, and the factor ‘d’ is named as ‘brand loyalty (b)’.Thus, the brand equity score for a respondent is calculated with thetotal of all 21 items. The analysis done so far has given acceptableresults.

SCALE FOR BRAND LEADERSHIP

The need for this scale arose because brand leadership is one of theconstructs included in the nomological net of brand equity. This scalewill be used to test the validity of the brand equity scale.

The scale items for brand leadership were generated from the‘Brand Equity Ten’ framework given by Aaker (1996).The four itemsused to measure brand leadership are viz. leading brand, innovativebrand, brand is growing in popularity and a negatively wordedstatement on leading brand.

Results of the first pilot study demonstrated that the negativelyworded statement needed to be dropped. The other three items wereacceptable and were used in the second pilot study.

Table 7 presents a summarised analysis of the scale for thethree services and the total data as obtained in the second pilot study.






Table 7: Analysis of Brand Leadership Scale -Second Pilot StudyScale items


item is deleted


Items to total

correlation


Factor loadings

Communalities

Other Results


Leading brand 0.814 0.000 0.864 0.777 0.604 No. of factors = 1 KMO test value = 0.711 Bartlett’s test p value = 0 Cumulative sum of squared loadings = 67.376% Innovative 0.832 0.000 0.877 0.759 0.576

Popularity 0.738 0.000 0.903 0.917 0.841


Leading brand 0.9448 0.042 0.567 0.273 0.075 No. of factors = 1 KMO test value = 0.499 Bartlett’s test p value = 0 Cumulative sum of squared loadings = 61.010% Innovative 0.4612 0.001 0.897 0.918 0.842

Popularity 0.3227 0.000 0.940 0.956 0.914

Cellular Mobile Services (N=32; Cronbach Alpha =0.7190)

Leading brand 0.724 0.002 0.757 0.542 0.294 No. of factors = 1 KMO test value = 0.581 Bartlett’s test p value = 0 Cumulative sum of squared loadings = 53.509%

Innovative 0.708 0.000 0.785 0.566 0.320

Popularity 0.444 0.007 0.869 0.996 0.991

Total Data (N=85; Cronbach Alpha =0.8010)

Leading brand 0.832 0.000 0.780 0.592 0.350 No. of factors = 1 KMO test value = 0.652 Bartlett’s test p value = 0 Cumulative sum of squared loadings = 60.498%

Innovative 0.717 0.000 0.864 0.759 0.576

Popularity 0.616 0.000 0.894 0.943 0.888

As can be seen in Table 7 the scale has performed very well forbanking. The scale-item ‘leading brand’ has got very low communalityand low factor loading for life insurance. The performance of brandleadership scale is by and large acceptable for cellular mobile servicesthough the value of ‘cumulative sum of squared loadings’ is less then60% and the communality of two scale-items was less then 0.5.Similarly, the scale has shown acceptable results for total data thoughthe communality for scale-item ‘leading brand’ is less than 0.5.

Overall the results of the brand leadership scale are acceptable,and the scale is used for validity estimation of the brand equity scale,later in the research.

VALIDITY ESTIMATION OF THE BRAND EQUITY SCALE

The convergent validity, divergent validity and nomological validityof the 21 item brand equity scale was assessed.





149 Nath, Bawa

Criterion – Related Validity

Two types of criterion related validity was assessed for the brand equityscale viz. Convergent validity, and Divergent validity. A measure issaid to possess convergent validity if independent measures of the sameconstruct are highly correlated. Divergent validity requires that a measuredoes not correlate too highly with measures from which it is supposedto differ.

Correlation coefficient was used to assess the different types ofvalidity. Value of correlation coefficient was interpreted in two waysviz. absolute value of correlation, and percentage of shared variancebetween the variables. Franzblau (1958) has given a rule of thumb tointerpret the absolute value of correlation. The author classifiedcorrelation between 0.6 to 0.8 as marked degree of correlation, and0.8 and above as high correlation. Coefficient of determination wasalso used for assessing the validity calculations. The coefficient ofdetermination indicates the proportion of shared variance betweenvariables.

Assessing Convergent Validity: Convergent validity is based onthe correlation between responses obtained by maximally differentmethods of measuring the same construct (Peter, 1981). Correlationsof brand equity score with all four components of brand equity werecalculated to assess convergent validity. Similar approach has beenused by other authors like Agarwal, and Rao (1996), and Mackay(2001a).

Table 8 presents the correlation of sub scale totals with the total ofbrand equity scale, and the coefficient of determination.

Table 8: Convergent Validity of Brand Equity ScaleBrand equity component Second pilot study Final study

Correlation with brand equity

Coefficient of determination

Correlation with brand equity

Coefficient of determination

Brand Familiarity 0.526 27.66% 0.703 49.42% Perceived Quality 0.869 75.51% 0.906 82.08% Brand Loyalty 0.916 83.90% 0.918 84.27% Brand Associations 0.761 57.91% 0.842 70.89%

The correlations were calculated in the second pilot study and in

the final study. As shown in Table 8, in the second pilot study, therange of correlation was from 0.526 to 0.916 and the range of coefficientof determination was from 27.66% to 83.90%. In the final study, the






range of correlations is from 0.703 to 0.918 and the range of coefficientof determination is from 49.42% to 84.27%. All the correlations maybe termed as either marked degree or as high degree. This was taken assufficient evidence of convergent validity of the scale.

Assessing Divergent Validity: Divergent validity is measured bydemonstrating that a measure does not correlate very highly with anothermeasure from which it should differ (Campbell, 1960). Divergentvalidity of the brand equity scale was assessed with the multi-attributescore calculated in the second pilot study.

The broad approach followed is similar to that followed by Mackay(2001a)though in this research effort, only top three attributes havebeen used for calculating the multi-attribute score, whereas Mackay(2001a) had used more attributes.

The attributes selected in the exploratory study were used incalculation of Multi-attributes score. The reader will recall that therespondents were asked to rate the importance of the attributes on afive points scale. Then in subsequent questions, respondents were askedto rate the existence of each attribute in each of the brands familiar to /used by the respondent. The two ratings for each attribute weremultiplied. Three such multiplications were added to produce a multiattribute score for per brand per respondent.

The calculation process of multi attributes score is shown below.Multi-attribute score of brand XYZ = (importance of attribute 1

existence of attribute 1 in brand XYZ) + (importance of attribute 2 existence of attribute 2 in brand XYZ) + (importance of attribute 3 existence of attribute 3 in brand XYZ)

The correlation between brand equity and multi attribute score was0.634, which indicated only 40.19% shared variance between thevariables (coefficient of determination). Thus multi attributes score donot correlate too highly with brand equity. This is sufficient evidenceof divergent validity of the scale.

Nomological Validity

It is based on investigations of constructs and measures in terms offormal hypotheses derived from theory. It refers to an observedrelationship between measures purported to assess different butconceptually related constructs. The nomological validity of brand





151 Nath, Bawa

equity was assessed with market share, overall preference, and brandleadership. It was assessed in the second pilot study. The results aresummarised in Table 9.

Table 9: Nomological Validity of Brand Equity ScaleVariable and direction of relation

with brand equity Reference/s

Statistic tested in current research

Perceived Market Share (+) Chernatony and Harris (2001); Yoo et al. (2001)

Rank Correlation coeff = 0.923

Overall Brand Preference (+) Aaker (1996); Pappu et al. (2005); Yoo et al. (2000)

Rank Correlation coeff = 0.965

Brand Leadership (+) Aaker (1996) Karl Pearson Correlation coeff = 0.760

As shown in Table 9, the relationship between brand equity andperceived market share was hypothesised to be positive (Chernatonyand Harris, 2001; Yoo et al., 2000).The relationship between brandequity and overall preference of the brand was also hypothesised to bepositive (Aaker, 1996; Pappu et al. 2005; Yoo et al. 2000).; and therelationship of brand equity and brand leadership was also hypothesisedto be positive (Aaker, 1996)

The respondents were asked to express what percentage of theirtotal budget they intended to spend on the brand(s) responded to bythem . Rank correlation was calculated between intention to purchaseand brand equity. The correlation coefficient is 0.923, which indicates85.19% shared variance between the variables (coefficient ofdetermination).

Respondent were asked to rank the brands in the order of theiroverall preference. The rank correlation coefficient between overallpreference and brand equity is 0.965, which indicates 93.12% sharedvariance between the variables (coefficient of determination).

Brand leadership was measured with a three-item, five points ratingscale developed by the authors. The correlation between brand equityand brand leadership is 0.760 and it is significant at 0.000 level ofsignificance. It indicates 57.76% shared variance between the variables(coefficient of determination).

IMPLICATIONS OF THE RESEARCH

Marketing practitioners and research scholars working in India faceproblems due to the paucity of marketing scales whose psychometricshave been tested in India. This research effort is a small step in fillingthe lacuna in indigenous marketing literature. With the help of thisscale, brand managers will be able to track the equity of the services






offered by their organisations. As the contribution of services to thecountry’s GDP increases, the number of brand managers wanting touse a scale such as this, should also increase.

The productivity of researchers will also increase. Marketing ofservices is attracting a large number of researchers. They will have avalidated scale at their disposal. They need not start working fromscratch on a brand equity scale or scales for its constituents.

The scale is easy to administer. It can be used even in surveysusing mail or Internet or face to face interviewing. Due to the largenumber of items and multiple points for each item, the scale givesfinely graded results and is able to distinguish between various levelsof brand equity. The services covered in this article, viz. banking, lifeinsurance and cellular services are prominent services, expected to seeeven greater expansion. There is thus great scope for using the scale.

LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH

Like other researches, this research too has certain limitations. Thenomological net used, did not contain variables that are expected tohave a negative relationship with brand equity e.g. dislike for the brand..Results related to developing norms; the last step of Churchill (1979)framework, has not been reported in this paper.

The authors suggest replicating this research using different servicesand different analytical techniques like structural equation modellingand confirmatory factor analysis. The relative importance of differentcomponents of brand equity can also be ascertained. Research is alsorecommended to find out the effects of different marketing strategieson brand equity.

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http://www.Brandchannel





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Dr. Pushpender Nath is working as Sr. Executive in Choice ModellingGroup with The Nielsen Company, New Delhi, India.

Dr. Anupam Bawa is Professor at University Business School, PanjabUniversity, Chandigarh, India.




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