Determinants of Brand Equity Determinants of Brand Equity with Mediating Effect of with Mediating Effect of

Promotion in the Noodles Promotion in the Noodles MarketsMarkets

Dr. Dhruba Kumar Gautam Assoc. Professor, Tribhuvan

University Dr. Sajeeb Kumar Shrestha Lecturer, Tribhuvan University

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NAM 4th and IFEAMA 14th International Conference

March 27-29, 2017

Background of the Background of the StudyStudy

Brand makes difference from competitors through name and symbols and others (Aaker, 1991).

Importance raised after 1980s.Value created for the company

(Solomon and Stuart, 2002)

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……Keller (1993) depicts it is the

differences in brand knowledge about consumer towards the brands and how they respond to the marketing activities of the brand.

To gain sustainable competitive advantage in the marketplace, we should know the value of branding.

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Noodles in NepalNoodles in NepalNoodles industry is growing as brewery

and distillery (Humagain, 2000). Fastest growing business in the FMCG. Healthiest segment on Manufacturing.After Nepal-India Trade treaty of 1996,

Indian market was explored. Rs. 1250 m (Humagain, 2000)

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……Bangladesh and Maldives (Humagain,

2000). Wai-Wai brand covers 35 per cent of

domestic market share.15 brandsMajor brands: Wai-Wai, RaRa, Mayos

and RumPum.

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Research Questions and Research Questions and ObjectivesObjectivesQuestions:Which dimensions of brand equity

appears to have more effect on brand equity of noodles markets in Nepal?

Does advertising and sales promotion mediates brand equity dimensions to brand equity?

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Brand Awareness Brand

Equity

Perceived Quality

Brand Association

Brand Loyalty

Advertising

Sales Promotion

H2=2

H1=1

H3=3

H4=4

Research Framework

Figure 1: Research Framework

HypothesesH1(1): Perceived quality has a significant effect on brand

equity.H2(2): Brand awareness has a significant effect on brand

equity.H3(3): Brand association has a significant effect on brand

equity.H4(4): Brand loyalty has a significant effect on brand equity.

For testing the mediating relationship, following hypotheses were proposed.

H5: Promotion variables (Advertising and sales promotion) mediates perceived quality with brand equity.

H6: Promotion variables (Advertising and sales promotion) mediates brand awareness with brand equity.

H7: Promotion variables (Advertising and sales promotion) mediates brand association with brand equity.

H8: Promotion variables (Advertising and sales promotion) mediates brand loyalty with brand equity.

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MethodologyMethodologyResearch design: Descriptive and Causal. Population: Customers who have

purchased noodles. Sample: 307 customers. Sample Methods: Convenience Sampling. Sample Frame: Retail outlets in different

location in Kathmandu City. Data: Primary data.Instrument: Structured questionnaire. Tools of Analysis: SEM – EFA, CFA and

SEM.

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AnalysisAnalysisNoodles purchased66 percent of respondents purchased Wai Wai

noodles, 20 percent of respondents purchased RaRa and 10 percent of respondents purchased Mayos

noodles.

Wai Wai is the leading brand that customers prefer and purchase.

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……Exploratory Factor Analysis

(EFA)Bartlett's test of Sphericity (Chi-square

3622.767; sig. 0.000)Kaiser-Meyer-Olkin (KMO) = 0.849 Sample number were adequate. Six factors were extracted cumulatively

accounted 60 percent of the total variance.

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Table1: Rotated Component Matrix

Scale Items Component1 2 3 4 5 6

AD3 0.800SP1 0.793SP3 0.783AD2 0.781AD4 0.774SP2 0.773SP4 0.680AD1 0.677PQ2 0.747PQ1 0.687PQ3 0.652

OBE3 0.639PQ4 0.506

BAW1 0.724BAW2 0.711BAW3 0.651BAW5 0.615BL3 0.813BL2 0.760CS2 0.619CS4 0.573

BAS3 0.763BAS7 0.722BAS2 0.676BAS8 0.406OBE1 0.739BL6 0.666

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.a Rotation converged in 6 iterations.

Confirmatory Factor Analysis (CFA)

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Model Fit IndicesCMIN/DF = 2.15, GFI = 0.90CFI = 0.91RMSEA = 0.05RMR = 0.023

So, the model was fairly fitted (Byrne, 2001; Hair and others, 1998; Joreskog and Sorbom, 1993).

Validity and Reliability of the Model

Discriminant Validity AVE should be greater than 0.50 (Fornell & Larcker,

1981). AVE should be greater than MSV AVE should be greater than ASV.

Convergent Validity:Construct Reliability (CR) should be greater than 0.7 CR should be greater than AVE.

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Table 2: Validity and Reliability of Table 2: Validity and Reliability of ConstructsConstructs

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CR AVE MSV ASVBASS

ADSP

PQQ BAWW BLL OBEE

BASS0.76

8 0.5180.44

1 0.2810.61

5          

ADSP0.90

4 0.5420.10

6 0.078 0.32 0.736        

PQQ0.86

7 0.5160.44

1 0.3440.66

4 0.3260.62

5      

BAWW0.79

5 0.5160.46

1 0.2890.58

1 0.2250.63

4 0.602    

BLL0.79

2 0.5050.46

1 0.3010.49

2 0.2770.61

3 0.6790.66

5  

OBEE0.77

8 0.5060.39

6 0.2550.53

1 0.2270.62

9 0.440.59

3 0.639

Figure 2: Final Overall Measurement Model 16

Figure 3: Structural Equation Modeling (SEM) 17

Structural Equation Modeling (SEM)

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Variance Explained by Structural Model

• Advertising and sales promotion was 0.135 or 13.5

• Brand equity was 0.495 or 49.5 percent.

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Hypotheses TestingTable 3

Hypothesis From To

Standardized

Coefficients

S.E. t-value Label

H1 PQQ OBEE 0.369 0.142 2.591 Significant

H2 BAWW OBEE -0.183 0.146 -1.255Not

significant

H3 BASS OBEE 0.248 0.164 1.508Not

significant

H4 BLL OBEE 0.407 0.139 2.921 Significant

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Mediation TestTable 4

Hypothesis Parameter Estimate Lower Upper P

H5Perceived Quality × Advertising and Sales

Promotion-0.005 -0.075 0.014 0.48

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H6Brand Awareness ×

Advertising and Sales Promotion

.007 .021 .043 .005

H7Brand Association ×

Advertising and Sales Promotion

-.007 -.086 .022 .551

H8Brand Loyalty × Advertising

and Sales Promotion -.004 -.060 .011 .530

FindingsFindingsWai-Wai is leading brand in Nepal. Perceived Quality and Brand Loyalty

were the influential factors for building brand equity for noodles brands.

Advertising and sales promotion mediated brand awareness to brand equity

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ConclusionConclusionPerceived quality and brand loyalty was the

important predictor for overall brand equity. This was similar to the findings of Koirala

and Shrestha (2015), Kazemi et al. (2013), Tong and Hawley (2009) and Atilgan et al. (2005).

Advertising and sales promotions had efficiency to create brand awareness to the customers that would contribute to brand equity.

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• Thank You.