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Application of Consumer Based Brand Equity with Umbrella Brand FMCG-Staples products

Dr. P. Ganesan

Professor in MarketingSchool of Finance and Banking

MburabuturoGikondo

KigaliRwanda

sumigans10@rediffmail.com

Mr.V. Sampath

Vice President (Operations)

VIT UniversityVellore632 014

Tamil Nadu, India

Ms.Anussha

MBA Student

VIT Business School

VIT University

Vellore

Key Words: Umbrella Branding, Brand Equity, Staple Foods, Consumers

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Application of Consumer Based Brand Equity with Umbrella Brand FMCG-Staples

products

With various objectives including saving and/or reduction of marketing costs, goods and/or

services firms adopt the concept of Umbrella branding. The companies with single-product

(such as four wheeler Car Company) and multi-product company (such as FMCG

Company) follow the strategy of umbrella branding for its product(s). The premise of

umbrella branding is not making any difference between the markets also, that is, there is no

different between developing economy market (like Rwanda an East African country)

developed economy market (like USA or UK).

Wernerfelt (1988), in his study used the term Umbrella Branding (for the first time in the

economics / marketing literature) in explaining the signalling model and stated " ..... a

monopolist can use umbrella branding to send a noise-free credible signal about the quality of

a new product. In the present context, whether a firm is a monopoly or not, trying the

strategy of umbrella branding for its product and/or services to take several advantages from

the market.

Many empirical studies have examined the umbrella branding products / services with respect

to advertising efficiency (Tauber, 1981), impact of recall and recognition (Leigh, 1984),

effect of promotional activity (Manchandra, Ansari and Gupta, 2000), and spillover effects of

advertising and other market mix/sales promotion strategies (Erdem and Sun, 2002).

Wernerfelt (1988) emphasized that the umbrella branding serves as a nondissipative signal in

a supergame model in which the firm introduced a possibly infinite stream of new products.

In an another study Erdem (1998) provides a framework to analyse the impact of marketingmix strategies, consumer perceived risk, and consumer choice behaviour in a different

category.

The present study, in respect of Umbrella branding, not re-researching the advertisement

effectiveness and efficiency or spillover effects with Indian context. There are pleathro of

studies on measurement of brand equity based on dimensions proposed either by Aaker

(1996) and / or by Keller (2001) with single product and / or services. These pleathro

research on brand equity done accorss product and services to mention few: Durable

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products-cars, television (Ravi Pappu, Pascale G. Quester and Ray W.Cooksey, 2005) and

watches (Lassar, Mittal and Sharma, 1995), beverage industry (Eda Atilgan et al., 2005),

washing machines (Villarejo-Ramos and Sanchez-Franco, 2005), apparel brand (Kim,

Knight and Pelton, 2009 and Hyun-Joo Lee, Archana Kumar and Youn_kyung Kim, 2010) .

To mention on Services Brand equity: three service products like movie theaters, hair salons

and pest control (Krishnan and Harline, 2001), bank credit cards (Marisa Maio Mackay,

2001), e-tailing (Christodoulides et al., 2004), hotel brand equity (Kayaman and Arasli, 2007,

Woo Gon Kim, Bongran Jin-Sun and Hyun Jeong Kim 2008 and Jing Bill Xu and Andrew

Chan, 2010), B2B financial services (and Taylor, Hunter Lindberg, 2007 and Galina

Biedenbach and Agneta Marell, 2010), logistic services (davis, Golicic and Marquardt, 2009)

and hospital marketing area (Kim et al., 2008). It can be noticed that the majorty of

researchers have done the work based on single product or services. The present study differs

in terms of assessing the brand equity of Umbrella brands under Fast Moving Consumer

Goods (FMCG)Staples food product category which includes Atta, Salt and Spices.

Research Questions and Model

1. Does brand equity differ among the place of residence of the respondents betweenproduct categoryAtta / Salt / Spices?

2. Is there any similarity across the product category on the impact of Brand Equityfactors on the dependent factor (a) Brand Loyalty and (b) overall Brand Equity across

the product categoryAtta/Salt/Spices? and

3. What the brand loyalty index and brand equity index across the product category Atta / Salt / Spices?

Model Specification

The model consists of Brand Loyalty / Overall Brand Equity as the dependent variable(s), the

Brand Equity factors: Brand Knowledge, Brand Image, Perceived Quality, Customer

Satisfaction, Price Deals and Brand Personality as independent variables. Brand Loyalty act

as an additional independent variable when overall Brand Equity is a dependent variable in an

another model.

Model A (without dot-lines) from hypotheses (1a to 1f) depicts the positive effect of the

explanatory variables: brand knowledge, brand image, perceived quality, satisfaction, price

details and brand personality with the dependent variable brand loyalty. Model B (with dot-

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lines) from hypotheses (2a to 2g) exhibits the positive effect of the explanatory variables:

brand knowledge, brand age, perceived quality, satisfaction, price details, brand personality

and brand loyalty with dependent variable brand equity

Methodology

Under this study, it is intended to identify the Brand equity under Umbrella Branding Product

Lines of the ITCs (Indian Tobacco Company) staple product. Descriptive and Analytical

approach was employed in order to answer the research questions. The selected study area

for conducting the study is Coimbatore District, including the Coimbatore Corporation which

one of the growing metropolitan city in Tamil Nadu, India.

The study area is selected on the basis of convenience, however, the target shops are from

rural, semi-urban and urban areas of Tamil Nadu, southern India . Women both working and

housewives who purchase staples are the sampling unit. Since the population is large and

unknown, non-probability sampling method - convenient sampling is followed in the

selection of the sampling unit. The customers (that is consumers of Branded and Unbranded

Staples) are selected based on the convenience sampling. The size of the 330 respondents

was given the responses related to the study. The primary data were collected on brand equity

measures with the help of structured questionnaire. However, at semi-ruban and urban area,

the required information was collected through self-administered survey method and Personal

Interview method was adopted in the rural areas respondents (because the questionnaire was

designed in English language only). The five point Likert scale is used to indicate the degree

of agreement and disagreement with a variety of statement related to the perception of the

respondents towards the parameters of measuring Brand equity (the scales of Brand Equity

2g

2f

2e

2d

2c

2b2a

1a

1b

1c

d

1e

1f

Brand loyalty

Brand knowledge

Brand image

Perceived quality

Satisfaction

Price deals

Brand personality

Overall Brand

Equity

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Dimensions are adopted from the study of Aaker, 1991). In order to analyze the primary data

collected both conventional and non-conventional tools were employed. With regression

equation, by adopting the Analytical Hierarchy Process (AHP) as suggested by Saaty T.L

(1994) and adapted by Punniyamoorthy and Prasanna Mohan Raj (2007), the brand equity

index is measured between three products: Atta, Salt and Spices.

Table 1 reveals the reliability values of the dimensions of service quality and business

performance of organizations of the business customers. It is noted that the cronbach alpha

values are higher than suggested value. Though the adapted scales reliability values should

be greater, in this case the values not below the value 0.747 with atta, 0.782 with salt and

0.787 with spices.

Table 1: The reliability value for the brand equity dimensions

Brand Equity

Dimensions

Atta Salt Spices

Brand Knowledge 0.934 0.931 0.949

Brand Image 0.950 0.979 0.976

Perceived Quality 0.949 0.961 0.935

Satisfaction 0.747 0.913 0.863

Loyalty 0.904 0.941 0.934

Price Deals 0.899 0.876 0.853

Brand Personality 0.929 0.782 0.787Overall Brand Equity 0.962 0.933 0.936

Results and Discussion

The ANOVA test was employed to understand and measure the staple products brand equity

dimensions are same across the stores: modern stores, supermarkets, retail outlets, and

grocery stores. The results of F-value (Table 2) demonstrate the brand equity dimensions

between staple products: atta, salt and spices. The brand knowledge between four types of

store is the same with regard to atta (F=0.973) and salt products (F=1.652), but is different

with respect to spices products (F=4.227) with statistically significance. The mean value of

spices also supports the statistical significant F-value. Except the brand knowledge

dimension, there is no difference between four types of stores with all other brand equity

dimensions: brand image, perceived quality, satisfaction, loyalty, price deals, brand

personality and overall brand equity.

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The significant difference between four stores with spices product is attributed by the brand

awareness and association of the brand knowledge dimension which indicates the breadth and

depth of recall due to promotion strategies of the company are high with atta and salt, thus

results the brand knowledge among the customers of four types of store is same. The

promotion strategies with spices product created the brand strength among customers is not

the same between the stores in general and very low with grocery stores (as indicated by the

mean scores).

Table 2: Brand Equity Dimensions between staple products and between shops

Brand

Equity

Dimensions

Atta Salt Spices

1 2 3 4 1 2 3 4 1 2 3 4

BrandKnowledge

3.90 3.69 3.50 3.39 1.36 2.18 2.26 1.82 1.56 1.87 1.37 .89F=0.973 F=1.652 F=4.227*

Brand Image 3.71 3.24 3.26 3.25 .96 1.70 1.83 1.82 .99 1.11 .68 .51

F=0.489 F=0.826 F=2.151

Perceived

Quality

.93 1.68 1.99 1.91 .93 .98 .58 .58 .93 .98 .58 .58

F=1.149 F=1.276 F=1.276

Satisfaction 3.85 3.45 3.31 2.99 .60 1.68 2.02 1.70 .55 .91 .65 .61

F=1.985 F=2.036 F=0.687

Loyalty 3.87 3.30 3.27 3.09 .67 1.52 1.95 1.65 .63 .89 .62 .41

F=1.145 F=2.065 F=1.408

Price Deals 1.40 1.17 .96 1.39 .50 .59 .54 .77 .35 .52 .47 .32

F=1.157 F=0.361 F=0.790

Brand

Personality

2.30 2.67 2.48 2.49 0.50 0.85 1.11 0.73 0.60 0.56 0.75 0.44

F=0.191 F=0.953 F=0.631

Overall

Brand Equity

1.35 1.88 2.23 2.56 .55 .59 1.48 1.15 .55 .23 .54 .27

F=1.927 F=4.102* F=1.334

Note: 1 is Modern stores, 2 is Supermarkets, 3 is Retail outlets, and 4 is Grocery stores

The regression results of the determinants of brand loyalty and brand equity (Table 3)

produces the mixed results of the hypotheses stated in respect of the three products: atta, salt

and spices. The adjusted R2

value (atta = 0.88; salt = 0.911; and spices = 0.94) of the brand

loyalty model explains the high percentage of variation in brand loyalty of the products

selected is explained by the brand knowledge, brand image, perceived quality, price deals,

brand personality and satisfaction. With the determinants of brand loyalty, only satisfaction is

a strong predictor and had positive impact on the brand loyalty with all the three products:

atta ( = 0.87, t=18.62), salt ( = 0.754, t=16.20), and spices ( = 0.726, t=18.41). The

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estimated coefficients of customer satisfaction on brand loyalty supports the findings of K.H.

Kim et al., (2008). In addition, brand image variable is positively influencing the brand

loyalty with salt ( = 0.121, t=2.27) and spices ( = 0.123, t=2.74) but with atta, the positive

impact is statistically insignificant ( = 0.01, t=0.28). Thus among the hypotheses, only 1dis

accepted and other hypotheses 1a, 1c, 1e, and 1fare not accepted. Hypothesis 1b is partially

accepted with salt and spices but not with atta product.

Table 3: Determinants of Brand loyalty and Brand Equity

Atta Salt Spices

Brand

Loyalty

Brand

Equity

Brand

Loyalty

Brand

Equity

Brand

Loyalty

Brand

Equity

Constant 0.01(0.06) 2.317(5.01) .039(0.62) .492(2.97) -.040(-1.26) .167(1.64)

Brand Knowledge 0.10

(1.83)

-.265

(-1.15)

.029

(0.63)

-.078

(-0.65)

.037

(1.69)

.087

(1.22)

Brand Image 0.01

(0.28)

.172

(0.88)

.121

(2.27**)

.158

(1.13)

.123

(2.74*)

.026

(0.18)

Perceived Quality 0.00

(0.16)

.066

(0.87)

.025

(0.742)

0.265

(3.07)*

.090

(2.07*)

-.055

(-0.39)

Price Deals -0.01

(-0.40)

-.001

(-0.01)

.040

(1.00)

-.303

(-2.94)*

-.042

(-1.45)

-.070

(-0.76)

Brand Personality 0.01

(0.30)

-.130

(1.53)

.029

(0.81)

.075

(0.83)

-.028

(-1.09)

.286

(3.52*)Satisfaction 0.87

(18.62*)

-.412

(-1.18)

.754

(16.20*)

-.159

(-0.83)

.726

(18.41*)

-.152

(-0.70)

Loyalty .541

(1.65)

.624

(3.16*)

.094

(0.38)

Adj. R2

0.88 .004 .911 0.30 0.94 0.06

F-Value 221.39* 1.09 303.27* 11.93* 440.47* 2.70*

The results on brand equity dimensions and its effect on overall brand equity indicates no

dimensions have had significant effect on the overall brand equity of atta which also

supported by the adj.R2

(0.004) of the regression equation related to atta. Thus, all the

hypotheses: 2a, 2b, 2c, 2d, 2e, 2f and 2g are not accepted. With salt product, among seven

variables loyalty ( = 0.624, t=3.16) and perceived quality ( =0.265, t=3.07) are significant

variables and have had positive impact on the overall brand equity. Thus, among the

hypotheses: 2c and 2d are supported , and 2g is not supported. The hypotheses 2g related

price deals (=-0.303, t=2.94) has negative effect on overall brand equity of salt, indicates the

customers are price sensitive to the salt product due to the availability of other brands andprivate label in the study area. The seven dimensions of brand equity collectively explains 30

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per cent of variations in overall brand equity of salt. With spices product, except hypothesis

2g viz., brand personality ( =0.286, t=3.52), no other variables predicts the overall brand

equity of spices. The adj.R2 (0.06) which is very low illuminates only 6 per cent of

variations in overall brand equity of spices explained by the brand equity dimensions.

Umbrella brands brand loyalty did not have direct effect on brand equity of atta and spices,

supports the empirical findings of K.H. Kim et al., (2008), but not with salt. Also, the brand

equity empirical estimates are similar to the beverage industry study of Eda Atigan et al

(2005) with respect to atta and spices. The parameter estimates of perceived quality did not

support the findings of Eda Atligan et al., (2008), but supports brand loyalty on brand equity.

Table 4: Brand Loyalty and Brand Equity Index across the Staple Products

Products Brand Loyalty

Index

Brand Equity Index

Atta 8.034 42.98

Salt 7.059 39.69

Spices 6.748 7.69

The estimated partial coefficients of the brand loyalty determinants and brand equity

dimensions (Table 3) with their relative weightage with average scores on five point scale

was used to construct the brand loyalty index scores and brand equity index scores for the

products: atta, salt and spices. The brand loyalty index score exhibits (Table 4) among three

products under the same brand name, atta enjoys high score (8.034) compared to that of salt

(7.059) and spices (6.748). The brand equity index scores for the umbrella brands reveals

atta with highest brand equity score of 42.98 weights, followed by salt with 39.69 weights

and spices with 7.69 weights.

Conclusion and Managerial Implications

The present research had little diversion from the plethora of brand equity research studies

with applying customer brand equity measurements with umbrella brands of staple products:

atta, salt and spices on the one hand, and comparing four types of stores with the selected

products. The comparison of atta brand with four types of stores elucidates no significant

difference and the similar findings observed with salt brand. Though other six dimensions did

not exhibit any difference, brand knowledge significantly differ between stores with spices.

The examination of effect of brand equity dimensions on brand loyalty with umbrella brands

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signifies the satisfaction is the strong predictor on brand loyalty with all products,

additionally the brand loyalty of salt also influenced by the brand image and brand loyalty of

spices influenced by brand image and perceived quality. The effects of brand equity

dimensions on umbrella brands brand equity did not show evidence of the commonality

across three products.

Brand equity dimensions are not the main determinants of the umbrella brands brand equity,

the marketing activities of the company from the product attributes, image of the channel

members including store, heavy promotion strategies etc do have strong effect on the brand

equity of the umbrella brands.

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Further Readings

Boonghee Yoo and Naveen Donthu (2001), Developing and validating a multidimensional

consumer-based brand equity scale, Journal of Business Research, Vol.52, pp.1 14.

Isabel Buil, Leslie de Chernatony and Eva Martinez (), A cross-national validation of the

consumer-based brand equity scale, Journal of Product and Brand Management, Vol.17 (6),

pp.384392.

Judith H Washburn and Richard E Plank (2002), Measuring brand equity: An evaluation of

a consumer-based brand equity scale, Journal of Marketing Theory and Practice, Vol.10 (1),

Winter, pp.4562.