the effect of the relationship of brand trust and brand affect on brand performance an analysis from...

8/6/2019 The Effect of the Relationship of Brand Trust and Brand Affect on Brand Performance an Analysis From Brand Loyalt…

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The Effect of the Relationship of Brand Trust and Brand Affect on Brand

Performance: An Analysis from Brand Loyalty Perspective

(A Case of Coffee Instant Product in Indonesia)

Rizal Edy Halim

Department of ManagementFaculty of Economics, University of Indonesia

Abstract

Brand that manages to bring a meaningful impression on consumers are more likely to win a special

attention. Value-added brands are also more likely to win a distinctive spot in consumers’ minds. In

addition, brand could affect consumers’ brand affection and brand trust. Consumers attempt to choose

the brand they want with the consideration of the value of purpose and pleasure (Batra & Athola, 1990),

availability, uniqueness, quality (Sheth, 2001), etc. This research is conducted to discover the effect of

the relationship of brand trust and brand affect toward brand performance mediated by purchase loyaltyand attitudinal loyalty as units of consumer brand loyalty. This research uses one product category

(instant coffee), consisting of four brands (Nescafe, Torabika, ABC, and Kapal Api).

Keywords : Brand Affect, Brand Trust, Brand Loyalty


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Introduction

Brands act as a distinctive factor that distinguishes one product from the other. For example,

consumers are no longer buying coffee but choosing brands in the market, i.e. Nescafe, Torabika, ABC,Kapal Api, etc. Consumer sensitivity is the sensitivity or perceptiveness of consumers towards an object

(brand) that builds their pattern of behavior towards the object. Producers of the various instant coffeebrands can provide a detailed explanation on the differences of the brands. Consumers see thedifferences in the package, logo, color, even the shape of fonts used by the brands. This is called

consumer sensitivity. Therefore, it is very important for producers to manage their brand to make their

products a success in the market. A highly, professionally managed brand will attract consumers, driveand stimulate them to buy, and even to buy repeatedly.

Brands should be considered as a soul (Aaker ; 1991). This statement suggests that brand should

not be viewed as product or service, but as an organization, person, or symbol that distinguishes them.

Nevertheless, not every strong brand delivers brand loyalty. Popular brands sometimes bring damage asthey can transform to generic product. For example, many people see Aqua 1 as identical to mineral

water products, not as a brand. This brings a negative effect to Aqua as consumers fail to see the

difference between the brand and the product. Additionally, they do not mind if they are offered otherbrands besides Aqua. Consequently, if Aqua does not want to loose its market, at least it should ensure

the availability of its products.

The brand actually makes the personification of the products or companies. This condition goesalong with an old Latin saying “on est omen” (the name is the mark, identification or identity). The

product brand forms or possesses identity or image and integrity of the product/company through a

perception process within the very mind. In other words, the brand is related to how the potential

consumer perceives the products’/services’ attribute through its brand. For examples Coke is not onlyknown as a brand of soft drink inside the mind of the consumers, but also a promise of a good

performance related with the values of refreshment, fun and good times. The brand is considered

something which is very important to the company. The brand, which owns that extra value on the sight

of the consumers, will be favored by the consumers and has its own place within the consumers’ mind.Another example is “Odol”. It is a tooth paste brand, which used to be produced by the Dutch but it can

no longer be found in the market today. However, when people are buying or ordering tooth paste nowin the present day, they still use “Odol” as the name of the tooth paste, even though the brand is not

Odol.

The above arguments document the evidence that brand affect and brand trust play a vital role to

brand management and further brand loyalty. The brand stated above able to give meaningfulimpressions to the consumers and can easily earn special attention from consumers. That means, a brand

has to truly understand what the consumers desire most (utilitarian and hedonic value). By doing this

consumers would feel that the brand is actually a part of them and could result brand loyalty. Thisphenomenon motivates the writer to see the relation between the brand trust and brand affect towards

brand performance.

1Aqua is the leading producer of mineral water product in Indonesia

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Literature Review

Brand loyalty is identical with the consumers’ brand commitment (Assael, 1998 ; Fournier, 1998; Gundlach, Achrol and Mentzer, 1995). Sequentially, Moorman, Zaltman and Deshpande (1992) added

an opinion saying that consumers’ brand loyalty or commitment is the result of trust. This is because

loyalty or commitment is the willingness to keep or maintain a high quality relationship.

Brand affect, which exists as the results of a strong and positive affective respond wouldpositively relate to the consumers’ loyalty and commitment towards the brand (Dick and Basu, 1994).

Thus, there is a positive relationship towards the attitudinal loyalty to initiate purchasing activity.

Chaudhuri (1998) tried to explain the significance within the scope of brand loyalty. This research statesthe direct and indirect relations between the loyalty aspects, such as: quality value, hedonic and

utilitarian value, with the brand loyalty itself. One of the aspects is emotional, where the positive

emotional is directly related to brand loyalty, vice versa.The brand that able to offer an added value to the consumers would urge the consumer to be

loyal (Aaker, 1996). This consumers’ brand loyalty is definitely able to improve the market share

(Assael, 1998), where consumer brand consumption will be influenced by the number of affectivefactors (Upshaw, 1995). A positive affective factor will give a positive effect towards brand loyalty.

Oliver (1999) defined brand loyalty as a deeply held commitment to consume product or servicein the future. The brand, which can create consumer commitment, will result to consumer trust in the

consumers’ decision making, which eventually would determine brand loyalty (Morgan & Hunt, 1994).This brand trust and brand affect will provide a significant contribution to the brand performance,

through attitudinal loyalty and purchase loyalty (Chaudhuri & Holbrook, 2001). The conceptual frame

of this study is to explain the relationship among brand trust, brand affect and brand loyalty, and also therelation between brand loyalty and brand performance.

Brand Trust, Brand Affect and Brand loyalty

Consumers’ trust towards brand (brand trust) and a positive brand affect will also influence the

attitudinal loyalty or consumer behavior towards the brand (Chaudhuri & Holbrook, 2001). This view isconfirmed by Aaker (1991), Aasel (1998), Beatty & Kahle (1988), Jacoby & Chestnut (1978).These

studies emphasized that there are several levels of consumer commitment towards the brand in thecontext of brand loyalty. The commitments are (among others): trust, continual purchase, reluctant to

switch brand (brand switching) and the joy or happiness (affect) when consuming that brand. Brand trust

will determine brand loyalty or consumer commitment towards the brand because trust is potential in

creating highly valued relationship (Morgan & Hunt, 1994). The trust towards the brand will influencethe intention to continue purchasing and stimulate the high attitudinal loyalty (Chaudhuri & Holbrook,

2001). In the relation between consumer loyalty and commitment, Ghundlach, et al (1995) found that

there is a relationship between loyalty and positive affect accepted by the consumers. Dick & Basu(1994) emphasized that brand loyalty will be even better if the brand is placed in a positive emotional

mood/affect. Strong and positive brand affect will also cause a positive impact towards the consumerbrand loyalty, in both purchase loyalty and attitudinal loyalty (Chaudhuri & Holbrook, 2001)

Brand Loyalty and Brand Performance

Chaudhuri & Holbrook (2001) suggested that there is a positive relation between brand loyalty(purchase and attitudinal loyalty) and brand performance (relative price and market share). They argue

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that a high purchase loyalty will increase the market share. This research is supported by The Double

Jeopardy Theory (McPhee, 1963), which said that the brand which owns a small market share will have

only few buyers and the purchasing frequency will also be small, vice versa. Other researchers,Enhenberg, Goodhardt, & Barwise (1990), discovered that brand which owns a high purchase loyalty

will increase the market share of the brand. Furthermode, a high attitudinal loyalty, according to

Chaudhuri and Holbrook (2001), will also increase relative price of the brand itself. Winters (1991) and

Aaker (1996) stated that brand price is an important aspect in building brand equity. According toHolbrook (1992), Bello & Holbrook (1995), brand equity is driven by the premium price which is

related to the the name of the brand itself. This is obviously contradictory with the research which was

conducted by Yoo, Donthu, & Lee (2000), who discovered that the consumer’s perception towardsbrand price does not determine brand loyalty. Along with Chaudhuri & Holbrook’s (2001), Keller

(1993) said that consumer who has strong brand attitude, will be willing to pay the price over that

particular brand, more than the price of any other brand.

Research Model

This study is based on Chaudhuri & Holbrook’s project (2001), which studies relation of thebrand trust and affection towards the brand performance. The brand trust and affection is controlled by

the product category level, while brand performance is controlled by differentiation and share of voice.The brand performance is represented by relative price and market share. However, this research is

trying to group brand performance by using four indicators namely re-purchase, relative price,

differentiation, and word of mouth (Sheth, 2001). Meanwhile brand trust and brand affect uses the sameindicators such as utilitarian and hedonic value (Chaudhuri dan Holbrook, 2001), quality, uniqueness

and availability (Knox & Maklan, 1998 ; Keller,2001). In addition, brand loyalty is divided into two (2)

categories; attitudinal loyalty and purchase loyalty

Figure 1. Research Model

Brand Trust

Brand Affect

PurchaseLoyalty

Attitudinalloyalty

BrandPerformance

3



Research Variables

Independent variables

Brand Trust: This variable has five indicators, each measured by using seven-point scales of agreement

1. Hedonic (x1)

- I believe that this brand will provide its own pleasure.

- I believe that this brand will make me happy.

2. Utilitarian (X2)

- I believe that this brand is suitable to my needs- I believe that this brand is useful for my activities

3. Availability (X3)- I believe that this brand is available everywhere

- I believe that getting this brand is not difficult

4. Uniqueness (X4)

- I believe that this brand is different from any other brand- I believe that this brand has a distinguished character, which other products don’t have.

5. Quality (X5)- I believe that this brand has good quality

- I believe that the quality of this brand is well guaranteed

Brand affect : This variable has five indicators, which can be measured by seven-point scales of

agreement

1. Hedonic (X6)- This brand brings its own pleasure for me

- This brand makes me very happy2. Utilitarian (X7)

- This brand fulfills my needs

- This brand makes me passionate again3. Availability (X8)

- This brand is available everywhere, makes me want to use it constantly

- This brand is available everywhere, makes it easy for me to get it4. Uniqueness (X9)

- This brand is different from any other similar brand, makes me not want to switch to other brand

- This brand has a distinguished character, makes me want to consume it constantly5. Quality (X10)

- This brand has the best quality, makes me want to consume it constantly

- The quality of this brand is guaranteed, makes me want use it constantly

4



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Dependent variables

Purchase loyalty: This variable has four indicators, which can be measured by seven-point scales of

agreement

1. I will buy this brand again in the future (Y1)

2. I will fulfill the everlasting purchasing will over this brand (Y2)

3. I wish to continue purchasing over this brand (Y3)4. I will continue to buy this brand even though there are lots of other brand options (Y4)

Attitudinal loyalty: This variable has four indicators, which can be measured with seven-point scales of

agreement

1. I commit myself to this brand (Y5)

2. I will not switch to other brand even though there are lots of other brand options (Y6)

3. I am willing to pay more than any other brand to get this particular brand (Y7)

4. I will always use this brand (Y8)

Brand Performance: This variable has four indicators, each of which can be measured by seven-pointscales of agreement

1. Word of mouth (Y9) ; I am telling positive things about this brand to other people

2. Relative price (Y10) ; I keep buying this brand even though I have to pay more than other brand

3. Re-purchasing (Y11) ; I keep re-purchasing over this brand4. Differentiation (Y12) ; I am loyal to this brand because it is different than any other brands.

Methodology

The first step of the analysis is to conduct factor analysis on five existing constructs, to examine

the significance of the indicators to establish each construct. The factor analysis on each construct usesLISREL 8.30 (PRELIS 2.30) package program. The result of this process is expected to provideassistance in deciding which indicator that can be used prior to the structural equation modeling process.

The data processing is conducted by using the structural equation modeling process (SEM), due

to the simultaneous relationship among variables. The SEM processing is done gradually.

Results

The data analysis was done by using the multivariate analysis technique to understand the data

characteristics and the relation that happened between the variables. It can be useful in the modeling and

interpretation of the results achieved. The data used in the multivariate analysis is assumed to benormally distributed (Hair,et al, 1999), so that linear relation among variables exist. The normality

testing in this research is not conducted because this study assumes that the data are normally

distributed. This is supported by Agung (2002). He suggests that the hypothetical testing regarding thedifference between the groups (variance analysis) was held without conducting normality testing. From

the factor analysis testing, some indicators of the model with large error variance were found. They are

X1, X2, X3, X6, X7, Y1, Y3, Y6, Y7 and Y11.These indicators are omitted.



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From the results of the data processing, this study found the following:

• Brand trust is negatively related towards the purchase loyalty

• Brand trust is negatively related towards the attitudinal loyalty

• Brand affect is positively related towards the purchase loyalty

• Brand affect is positively related towards the attitudinal loyalty

• Purchase loyalty is negatively related towards the brand performance

• Attitudinal loyalty is positively related towards the brand performance

The estimated causal models are:

• Purchase loyalty = -1.26 Brand trust + 2.09 Brand affect. Smc = 1.00

• Attitudinal loyalty = -1.27 Brand trust + 2.06 Brand affect. Smc = 0.94

• Brand performance = -0.04 Purchase loyalty + 0.97 Attitudinal loyalty. Smc = 0.83

The fit index of this model is as below:

Root Mean Squared Residual (RMR) = 0.030 (< 0.05)

Goodness of Fit Index (GFI) = 0.91Rot Mean Squared Error of Approximation (RMSEA) = 0.09 (> 0.05)

Adjusted Goodness of Fit Index (AGFI) = 0.85

Comparative Fit Index (CFI) = 0.97

Measurement Model

1. Brand Trust

For brand trust model, three variables (X1, X2, and X3) among the five are not used, because the

factor loading is less than 0.7. In addition the three variables also display large error variance. This leads

us using only two variables as the indicators of brand trust model. They are uniqueness (X4) and quality(X5). The observed variables, X5 and X4, contain the biggest factor load 0.90 and 0.81, consecutively.

The smc of X5 and X4 are 0.80 and 0.66, consecutively. This finding suggests that X4 can explain brand

trust construct up to 80% and 66% for X4. The statistical testing suggests that brand trust significantlyand negatively relate towards purchase loyalty or even attitudinal loyalty. This means that brand trust is

related to either purchase loyalty or attitudinal loyalty, yet with negative value.

2. Brand Affect

For brand affect model, three observed variables were achieved, which can function as the indicatorof brand affect model, which are X8, X9 and X10 (availability, uniqueness and quality). Other observed

variables (hedonic and utilitarian) were not included within this model, due to both variables, display

large error variance. From the three variables, which significantly measured brand affect, it turns out thatX10 has the largest factor load that is 0.92 with smc = 0.85. The statistical testing suggests that this

latent variable is significantly and positively related towards both purchase loyalty and attitudinal

loyalty.



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3. Purchase Loyalty

From four observed variables appointed in this model, it had been proven that two observedvariables; the willingness to buy constantly and to sustain the purchase over the brand (Y2 & Y4) can be

considered as the indicators of the purchase loyalty construct. Other observed variables (Y1 & Y3) were

not used due to both variables have large error variance. Observed variable Y4 contains the largest

factor load, which is up to 0.91 and smc = 0.84.

4. Attitudinal Loyalty

From four observed variables appointed in this model, it had been proven that two observedvariables; the will to commit to a brand and always use the brand (Y5 & Y8) can be considered as the

indicators of the attitudinal loyalty construct. Others; Y6 & Y7 were not used due to both variables have

large error variance. Observed variable Y5 contains the largest load factor, which is up to 0.97 and smc= 0.94.

5. Brand Performance

For this model, the statistical suggests to using 3 observed variables; word of mouth, relative

price and differentiation (Y9, Y10 & Y12) can be considered as the indicators of brand performanceconstruct. Variable; re-purchasing (Y11) was not used due to this variable has large error variance.

Observed variable ‘differentiation’ (Y12) contains the largest load factor, which is up to 0.91 and smc =0.83.

Structural Model

The Causal Model of Brand Trust and Brand Affect towards Purchase Loyalty and Attitudinal

Loyalty

On one hand, the analysis above shows that brand trust is related negatively towards either

purchase loyalty or attitudinal loyalty (-1.26 and –1.27). On the other, brand affect is related positivelytowards purchase loyalty and attitudinal loyalty (2.69 and 2.06). This indicates that brand affect is more

dominant in terms of its relation with the purchase loyalty and attitudinal loyalty.Strong brand affect would impact positively towards brand loyalty such as purchase loyalty or

attitudinal loyalty. In conjunction to the result of the research, it is shown that the respondents consider

brand affect have a higher value than brand trust (in consuming instant coffee). Therefore brand trust

seems less meaningful in its relation with the purchase loyalty and attitudinal loyalty. Brand affect couldthen provide positive contribution to purchase loyalty and attitudinal loyalty.

From that result, it can be concluded that brand loyalty (purchase loyalty and attitudinal loyalty)

within the behavior of consuming instant coffee is driven more by brand effect compared to brand trust.In this study, brand trust becomes meaningless (negatively related towards purchasing loyalty and

attitudinal loyalty).



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The Relation of Purchase Loyalty and Attitudinal Loyalty towards Brand Performance

This study found that purchase loyalty is related negatively and insignificantly towards brandperformance (-0.04 with the t-value = -0.12), yet on the contrary attitudinal loyalty is related positively

and significantly towards brand performance (0.97 with the t-value = 3.17). This means that in

accordance to the previous explanation, that the respondents are driven more by brand affect compared

to brand trust. So that in this research, it has also been achieved that the respondents consider attitudinalloyalty is a more significant matter compared to purchase loyalty, in its relation to with brand

performance. This also means that for the respondents with the behavior to consume instant coffee,

purchase loyalty is becoming more important and they ignore purchase loyalty.



Table 1. Reliability and overall measurement model

Ket: α = reliability using cronbach’s alpha

λ = estimate using Lisrel 8,30

Construct Variables

name

Indicator Mean Std.

Devα

Brand Trust

Brand Affect

Purchase loyalty

Attitudinal loyalty

Brand performance

KPMERK

AFMERK

SETPEM

SETKAP

KINMER

X4(Pm87)

X5 (Pm109)

X8(am65)

X9 (am87)

X10 (am109)

Y1(kp1)

Y4 (kp4)

Y5(ks1)

Y8(ks4)

Y9(km1)

Y10(km2)

Y12(km4)

5.7685

5.4681

5.5556

5.5509

5.2731

5.3519

5.1481

5.0926

5.1620

5.2917

5.9444

5.4028

.9262

1.0652

1.0146

1.1027

1.2063

1.1519

1.2599

1.3402

1.3526

1.2438

1.5025

1.2084

.7847

.8424

.8398

.9014

.8494

.8

.9

.7

.8

.9

.8

.9

.9

.9

.8

.8

.9



Tablel 2. Measurement and Structural Model

Measurement path Structural path

Independent Dependent

Item Construct Path estimate* t variables variables

X4 Brand Trust λ41 .81 14.18 Brand Purchase

X5 λ51 .90 16.30 trust loyalty

X8 Brand Affect λ82 .77 13.39 Brand Attitudinal

X9 λ92 .85 15.32 trust loyalty

X10 λ102 .93 17.68

Y 1 Purchase loyalty λ11 .87 17.42 Brand Affect Purchase

Y 3 λ31 .91 17.27 loyalty

Y 5 Attitudinal loyalty λ52 .97 19.28 Barnd Affect Attitudinal

Y 8 λ82 .91 17.42 loyalty

Y 9 Brand Performance λ93 .82 14.48 Purchase Brand

Y 10 λ103 .88 16.11 loyalty performance

Y 12 λ123 .91 17.09

Attitudinal Bran

loyalty performance

*Estimate using Lisrel 8,30



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Conclusion

The empirical finding suggests the following:

• The utilitarian and hedonic value of the research is not significant enough in creating

brand affect and brand trust model. This matter is caused by the existence of othermore dominant variables, in creating the brand affect and brand trust. They are the

quality, uniqueness and availability. Consuming instant coffee according to therespondents does not contain enough hedonic and utilitarian values.

• Brand affect according to the respondents are important in the behavior of consuminginstant coffee and causing brand trust to become meaningless in its relation with the

purchase loyalty and attitudinal loyalty.

• The regression model suggests that purchase loyalty is influenced by brand trust

(negatively) and brand affect (positively). This means that the consumers’ purchaseloyalty is solely influenced by brand affect, while brand trust is neglected. This

finding is contradictory to the Chaudhuri and Holbrook research (2001), which said

that brand trust and brand affect related positively towards purchase loyalty andattitudinal loyalty.

• The result also suggests that attitudinal loyalty is influenced by brand trust(negatively) and brand affect (positively). This means that attitudinal loyalty is also

dominated by brand affect that brand trust is ignored. According to the respondents,brand affect is more important in informing attitudinal loyalty compare to brand trust.

This is also contradictory to the discovery of Chaudhuri and Holbrook who said that

brand affect is related positively towards purchase royalty and attitudinal loyalty.

• The regression model show that the brand performance is influenced by –0.04purchase loyalty and 0.97 attitudinal loyalty. It means that the level of successfully of

brand performance according to the respondents was only influenced by attitudinal

loyalty, while purchase loyalty is ignored. This result is contradictory with theChaudhuri and Holbrook (2001) that suggests purchase loyalty and attitudinal loyalty

are related positively towards brand performance.

• From the explanations above we can say that the behavior of consuming instantcoffee is determined more by affective factor compared to cognitive. Therefore brand

management issues could be anticipating the question how far that particular brandcan stimulate the consumers’ affect territory.

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