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DOI: 10.4172/2169-0286.1000173
Hotel & Business Management
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ISSN: 2169-0286

Case Study Open Access

Factors Influencing Brand Equity: A Case Study of Dairy Industry

Amir Emami*
Faculty of Management, Kharazmi University, Iran

Abstract
This paper aims to examine the effect of marketing-mix and corporate image on brand equity in a Dairy company
(Kalleh Co.). The independent variables of the research are the elements of marketing-mix and corporate image while
the dependent variable is brand equity. The present work is a survey study that applies cross-sectional data to test the
research hypotheses. The results show that distribution channel in Kalleh Co. generates loyalty and awareness to the
brand with marginal effects on perceived quality. Besides, the most effective factor on brand awareness is the company
distribution channel (place), and every improvement based on price, positively affects all three aspects of the brand
equity–loyalty, awareness of the brand and perceived quality.

Keywords: Purchase decision; Buyer behavior; Brand equity; marketing tools that the firm uses to pursue its marketing objectives
Marketing-mix; Corporate image in the target market [8]. Therefore, customer’ decision depends on
the type of the product and its features, pricing and payment policies,
Introduction delivery facilities and promotional and motivating techniques
[9]. The mixture of effective marketing should feature four traits:
Brand as the present and the future identity of an organization,
compatibility with customers’ needs, an optimum combination of
the most important and unique feature of an entrepreneurial company
elements, commensurability with the firm’s resources, and creation
may be found in the integrity of its value offering and brand [1,2].
of competitive advantage. Decisions about marketing-mix to be made
Customers’ perception and recognition of brand are based on brand
based on customers’ demand. An accepted taxonomy of marketing mix
presence in the market, personal experience of the brand and what
is product, price, promotion, and place [3].
they may perceive from contract points including goods, distribution
channels, price, advertisement and sale growth [3]. Product: In general terms, everything is in quality to be brought to
a market and to meet customers’ need is called product. High quality
It should be acknowledged that there has been a shortage of
with first-grade parts is expensive to project a positive image of the
research conducted on brand, its importance and aspects in Iranian
product. In other words, the term “product” refers to a combination
companies and, to the best of our knowledge, no study has addressed
of “goods and services” provided by a company to the target market.
the importance of brand and corporate image in the dairy industry.
This work mainly aims to apprise consumers’ viewpoint with regards to Elements of products include services attached to the goods, brand,
their motivation to purchase which is the result of awareness about the package, and labeling [3].
factors that form consumer behaviors. Also, this work tries to illustrate
a better and more comprehensive image embedded in brand and also Price: One of the most challenging decisions to make in the
to raise consumers’ awareness about the quality of products. marketing plan is pricing the product or services. There are many other
factors such as costs, discounts, transportation, and inflation to be taken
A model based on previous researchers Aaker [4] is applied to into account as well. To put it simply, “price” is the amount of money to
examine the effect of marketing-mix elements and corporate image be paid for goods or services. A more comprehensive definition (from
on brand equity at Kalleh Dairy Company [4-6]. Previous research has an economic viewpoint) is “the interest paid by a consumer for using
examined the impact of brand on consumer behavior. For example, benefits of owning goods or services.” With its high effect on the value
Mudambi found that the kind of brand strategy highly depends on the of the product, the element creates the mental image of the product in
type of the market segment [7]. Also, Kim and Hyun’s study reveals mind of the customer [1]. All other marketing elements are costly [3].
the influence of marketing-mix efforts and corporate image on brand
equity based on three dimensions of brand. Kim and Hyun the research Promotion: Usually, potential customers needed to be informed and
context is an ICT market (software) while the context of this study is a taught how to find out about and use products through advertisements
market of Dairy Industry [6]. Also, this research produces evidence for in publications, radio, and TV. The whole set of the marketing plan
the relationship between consumers’ demographic information (age, of a company is called the combination of progressing factors of a
education, number of family members, and income) and brand equity
that previous research has not addressed them.
The marketing-mix and corporate image as independent *Corresponding author: Amir Emami, Assistant Professor, Faculty of
Management, Kharazmi University, Iran, Tel: +98 21 8832 9220; E-mail:
variables and awareness of brand, perceived quality, and loyalty to [email protected]
brand as dependent variables (observed variables of brand equity)
Received January 05, 2018; Accepted February 07, 2018; Published February
were considered in our model. After literature review and research 27, 2018
methodology, the results are provided.
Citation: Emami A (2018) Factors Influencing Brand Equity: A Case Study of Dairy
Industry. J Hotel Bus Manage 7: 173. doi: 10.4172/2169-0286.1000173
Literature Review
Copyright: © 2018 Emami A. This is an open-access article distributed under the
Marketing-mix and corporate image terms of the Creative Commons Attribution License, which permits unrestricted
use, distribution, and reproduction in any medium, provided the original author and
Every purchaser is under the influence of a different set of source are credited.

J Hotel Bus Manage, an open access journal Volume 7 • Issue 1 • 1000173

ISSN: 2169-0286
Citation: Emami A (2018) Factors Influencing Brand Equity: A Case Study of Dairy Industry. J Hotel Bus Manage 7: 173. doi: 10.4172/2169-
0286.1000173

Page 2 of 5

company or organization. The idea is to determine a combination of Research has addressed brand awareness, perceived quality, and brand
public advertisement, sale promotion ads, public relation, and door- loyalty as three dimensions of brand equity [6].
sale. Through sale promotion combination, companies try to create
Brand awareness: Awareness of brand is comprised of recognition
a suitable mental image of their brand for achieving advertising and
and memorization of the brand. By definition, “recognition” refers to
marketing goals. The four primary tools of promotion include free ads,
the ability of individuals to identify a brand, as they will be able to
public relation, and door-sale [3].
distinguish the brand from the others after introduction, observing and
Place (distribution channels): These factors provide facilities for hearing about the brand. Symbols, mottos, packaging and, in general
consumers; or provide access to the product when needed. There are terms, physical identity help further the recognition [4].
many issues for consideration in distribution: type of distribution
Brand loyalty: Loyalty to brand is the extent of consumer
network, number of mediators, and position of network members, to
preference for a brand in comparison to close substitutes. Brand loyalty
name just a few. A distribution channel is comprised of interdependent
is rooted in consumers’ belief that only a specific brand may meet their
institutions, which are in charge of delivering services or goods to
demands [4].
industries or end users. The better and faster this mixing element of
marketing is realized, the more positive mental image of the products Perceived quality: A reasonable definition is that perceived quality
or services. [3]. may be a conventional perception of general quality and merits of
goods or services in comparison with other rivals. The perceived
Corporate image: Likewise, any other elements in marketing, not
quality is valuable for some reasons. In some fields, it is the main reason
only is it achievable through a logical, strategic and systematic process,
to adopt a brand [4].
but it is essential to make it happen in this way. Practical thinking is
the way to this end. All constitutional elements of the mental image A survey on value equity of brand and its relation with customers’
should be studied, and results of such studies need to be taken into purchase behaviors showed the direct effects of value equity of brand
account to create an attractive and satisfactory image for consumers. and direct/indirect effects of the various aspects of value equity of
Five elements are most important for forming the image: the image brand, awareness of brand, perceived quality, and loyalty to brand on
of a brand, image of a product, resembled image, user image, mental customers’ decision [20,21]. Studies on effective factors on consumers’
image [10]. loyalty to a specific brand in food industries (a case study in noodle
business) confirmed all the hypotheses, meaning loyalty is rooted in
Personal and public factors were found as the most and the least
reputation, bearing the standard mark, type of package and taste
significant factors respectively in a survey on the role of Marketing-
and level of such loyalty depends on the availability of the brand in
Mix as compared to that of environmental factors in consumers’
the market. The studies ranked the factors using Freidman’s Test: 1:
decision for purchase [11,12]. An experimental analysis on the image
availability 2: type of package; 3: taste; 4: standard mark; 5: reputation
of origin country and marketing measures on perceived value equity
(Figure 1) [22].
by retailers showed consumer preference of global brand relative to
local ones, even if the latter is clearly of more quality and value [9]. Methodology
A novel phenomenon of specific commercial value was introduced
by another study on the effect of value equity of transaction and value According to the statistics of Kalleh Co., about 17000 retailers are
equity of brand on the relation between retailers and national brands active in Tehran city. Our statistical sample is comprised of retailers
producers. The results showed that value of producers’ brand amplifies in 22 districts of Tehran who have used at least two different products
its commercial value on retailers’ dependency and undermines its of the company in two consecutive months. Given the fact that the
effect on retailers’ loyalty [13]. Similarly, an article in the domain of consumers are picked from a limited society, and they are known,
managerial perception explains awareness of brand as a sign of some Morgan’s table is used for determining the sample size which suggests
managers’ viewpoint on the effectiveness of brand awareness. Results in 384 cases. Then 384 retailers were randomly picked from the company’s
this article explain that high awareness of the brand may be considered record list.
as a highly valuable asset of an enterprise [14,15].
Socio-demographic characteristics of sample
Brand equity Age: the main portion of the sample group is between 18-24 (166
A product becomes a brand when the target consumer learns about individuals/43.2%). Participants over 36 accounted for the smallest
it, and the user also saves the knowledge structure of the brand in their proportion in the group (3.2%). Education: holders of the high-school
memory to refer to it at the time of next purchasing decision [6,16]. diploma are the leading group of participants (41.1%), and most minor
When this knowledge structure is stabilized in the customer memory, groups are holders of a postgraduate degree (1.6). Gender: results
it helps the brand to enhance the product value which is known as showed that 198 of respondents were men (51.6%) and 186 were
brand equity [6]. The brand equity has profound effects on consumers’ women (48.4). Marital state: results showed that 233 of respondents
positive behavior with regards to the product. For example, they are were married (60.7%) and 151 were single (39.3%). Job experience:
more willing to spend more money on the product and more willing to the most considerable portion of the sample group was comprised
believe the product [17]. of people with 1-5 years of job experience (27.9%). Participants with
more than 25 years of experience involved the smallest portion (4.7%).
Not only lies in the value of symbols, but a value equity of a
Family members: the most significant portion of sample group was
brand conceptually is the value of exclusive technologies, licenses,
comprised of people from families with four members (129 individual
commercial marks, and other intangible factors such as knowledge and
33.6%) and the smallest portion was comprised of those who were
manufacturing process [18].
living alone (6.3%). Income state: Between 400-600 thousand Iranian
Generally speaking, value equity of a brand is defined regarding Tomon (36.5%) was the highest portion of Income in the sample. And
unique and reliable marketing measures related to a brand [19]. just 9.4% belong to the Income level below one million Iranian Tomon.

J Hotel Bus Manage, an open access journal Volume 7 • Issue 1 • 1000173

ISSN: 2169-0286
Citation: Emami A (2018) Factors Influencing Brand Equity: A Case Study of Dairy Industry. J Hotel Bus Manage 7: 173. doi: 10.4172/2169-
0286.1000173

Page 3 of 5

Marketing-Mix
Product
Price
Place
Promotion
Brand Equity
Awareness
Quality
Loyalty

Corporate Image

Figure 1: Conceptual model of research.

Research tool of the company are 0.61 effective on loyalty to brand, 0.91 on perceived
quality and 0.43 on awareness of brand. So, status of products is in
The content of the questionnaire was in two sections. The first part, power to create loyalty, brand awareness and perception of quality.
including eight questions that focus on the demographic characteristics In other words, any improvement in products is positively and
of respondents. Respondents were asked about gender, marital status, significantly effective on the three aspects of brand equity.
education, job experiment, number of family members, average
monthly income, and domicile. The second section was comprised of H5: Mental image of consumers has a positive impact on the
Brand equity’ dimensions
38 questions all in 5-score Likert scale. They include the effectiveness
of marketing-mix factors, corporate image, brand loyalty, quality The results show that mental image of the consumers of the
and awareness of brand. Applying structural equation modeling, the company is 0.93 effective on loyalty to brand, 0.55 on perceived quality,
statistical hypotheses of the study were tested. and 0.35 of brand awareness. However, the mental image positively
related to loyalty and quality but negatively associated with the brand
Results awareness. That is a surprising finding (Figure 2).
H1: Distribution channel (place) has positive effects on Brand Conclusion
equity’ dimensions
First, from the result we infer that the type of distribution channel
Results of statistical modeling using path analysis method show for Kalle Co. products can help emergence of the loyalty to and
that the distribution channel has a positive impact on brand loyalty awareness of the brand and any improvement in the price-based value of
and brand awareness but no significant impact on the perceived quality the product is significantly and positively effective on the three aspects
(p>1.96). of the brand equity. In addition, regarding price coefficients based on
Therefore, type of the distribution channel results in loyalty and value, the most effective factor was loyalty to brand. Sale promotion
awareness of the brand and do not affect perceived quality. Regarding status results in awareness of brand as one of the variables of value
the coefficients, distribution channel variable has the highest impact on equity. Products promotion status does not result in brand awareness
the brand awareness. as one variable of value equity. Loyalty and perceived quality, therefore,
have positive and significant effects. Among them, perceived quality
H2: Price has a positive effect on Brand equity’ dimensions is mostly affected by products sale considering path coefficients and
The results show that price has a positive impact on all the any improvement in quality of products positively and significantly
dimensions of the brand equity (loyalty 0.43, perceived quality 0.48, affects the three aspects of value equity. Based on coefficients, products
and awareness 0.43: P < 1.96). Hence, any changes in the prices of have the most effect on perceived quality among different aspects of
Kalleh Co. products may impact loyalty, awareness, and perceived perceived quality. Mental image of customers regarding the company
quality of the brand. acts as predictors of development on the three aspects of value equity.
Moreover, the results show that awareness of brand positively affects
H3: Promotion positively affects Brand equity’ dimensions value equity of brand for the consumers, as path coefficient is significant
and positive. Perceived quality of the products helps the formation of
Results show that promotion of sale, as a factor of marketing-mix,
value equity among the users. Loyalty to the brand of the company
is 0.4 effective on loyalty on brand, 0.66 on perceived quality, and only
among the three variables is the main variable in the formation of value
0.11 on brand awareness. Therefore, sale promotion does not affect
equity of the brand, as it has the highest coefficient.
brand awareness, though it is significantly and positively affects loyalty
to the brand and perceived quality. Second, we found that the perceived quality is the most effective
factor on purchase decision. In addition, among others, loyalty to
H4: Products of the company has positive effects on the Brand
brand has the highest effect on value equity of brand. Among the
equity’ dimensions
independent factors in the model, corporate image has a negative
Results of statistical modeling on path analysis show that products impact on the brand awareness. This is a critical issue regarding the

J Hotel Bus Manage, an open access journal Volume 7 • Issue 1 • 1000173

ISSN: 2169-0286
Citation: Emami A (2018) Factors Influencing Brand Equity: A Case Study of Dairy Industry. J Hotel Bus Manage 7: 173. doi: 10.4172/2169-
0286.1000173

Page 4 of 5

Figure 2: SEM model with t-values.

customer awareness of the company’s brand. That means that, not (e.g. paying attention to family as a source of value equity), proper and
only the mental image of the Kalleh Co. does not enhance its brand timely product distribution help increase customers satisfaction.
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J Hotel Bus Manage, an open access journal Volume 7 • Issue 1 • 1000173

ISSN: 2169-0286
Citation: Emami A (2018) Factors Influencing Brand Equity: A Case Study of Dairy Industry. J Hotel Bus Manage 7: 173. doi: 10.4172/2169-
0286.1000173

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J Hotel Bus Manage, an open access journal Volume 7 • Issue 1 • 1000173

ISSN: 2169-0286