Principles of Marketing Research 3
T h e J o u r n a l o f D e v e l o p i n g A r e a s Special Issue on Kuala Lumpur Conference Held in August 2014
Volume 49 No. 5 2015
MALAYSIAN FAST FOOD BRAND EQUITY
Teck Ming Tan*
Taylor’s University, Malaysia
Hishamuddin Ismail
Rasiah Devinaga
Multimedia University, Malaysia
ABSTRACT
Most Malaysian research defines the brand equity dimensions. This paper addresses this gap by
developing an empirical research model with better understanding of sequential relationships
between the dimensions of brand equity within the Malaysian fast food context. The results indicate
perceived quality (PQ) and brand awareness (BA) are the initial stage of brand building. Brand
familiarity, brand image, and brand trust serve as important role in enlightening the relationships
between PQ, BA, and attitudinal brand loyalty (ABL). ABL plays as a key variable for explicating
the relationships between other dimensions and overall brand equity. Future research could explore
the possibility of a longitudinal study through repeated observations, and invariance test across
different samples to make certain the components of measurement model and structural model are
remained equivalent.
JEL Classifications: JEL M13, M31 Keywords: Brand equity, Fast food, Sequential order
Corresponding Author’s Email Address: [email protected]
INTRODUCTION
In 2009, global fast food had reached a market value of $201.1 billion, with growth rate
of 3.1%, the volume reached $208.1 billion of transactions, counted as 3.9% growth rate
(Datamonitor, 2010), and it was considered as an important industry due to its global
trend (Van Zyl et al., 2010). However, the fast food market share in Malaysia was
subjugated by foreign brands (Aseambankers, 2007), reason being lack of expertise in
branding and marketing among local brands (Marshall Cavendish, 2009). Up-to-date, the
existing literature on brand equity model within the fast food industry was still sparse
(Tan et al., 2011). Besides, the identification of relationship among brand equity
dimensions was not clearly extended by the implication of marketing theory (Gil et al.,
2007). Such limitations have caused ambiguity in managing and predicting the tangible
and intangible characteristics of fast food brand. For instance: “Are there any pre-
determinate constructs among the fast food brand equity dimensions?” “Are there any
direct contribution of a) each dimensions b) certain dimensions to fast food brand equity?
The main objective of this research is to develop a theoretical model which
identified the relationships among brand equity dimensions within Malaysian fast food
context. The present study had applied Gil et al.’s (2007) brand equity model into fast
food context and proposed a modified model that was meaningful, both conceptually and
statistically. This research extended the understanding of fast food brand equity
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phenomena and its measurement, by exploring the sequential relationships between the
brand equity dimensions.
LITERATURE REVIEW
Gil, Andrés and Salinas’s Theory of Brand Equity (2007)
Gil et al.’s (2007) theory was adopted to generate a meaningful research in examining the
attitudes of Malaysian fast food consumers. Gil et al. (2007) clearly identified the
relationships among the dimension of consumer-based brand equity based on the
explanation of cognitive-affective-conative, which served as a justification for the
establishment of structural parameter estimate that provided better explanation than some
of the recent studies (e.g. Hess et al., 2011; Patwardhan and Balasubramanian, 2011;
Sanyal and Datta, 2011). Secondly, they categorized the dimensions of brand equity with
theoretical justification. For instance, perceived quality and brand awareness/association
were considered as cognitive constructs, while brand loyalty was considered conative
construct. The main advantage of this approach was this could lead to the better
development of measurement items, which to ensure there were clear operational
definition of the constructs and no overlapping of measurement items (Gil et al., 2007).
Thirdly, the selection of products/brands was based on the level of involvement that
derived from the perception of consumer rather than the inherent characteristic of the
product itself (Malär et al., 2011). Instead, Gil et al.’s (2007) model suffered a few
shortcomings. Their results indicated that both brand awareness and band association
were considered as a joint construct; causing limitation in unraveling the effect of brand
awareness from brand association (Huang and Sarigollu, 2012). Besides, their findings
did not support Aaker’s (1991) brand equity model, proposing perceived quality, brand
awareness and band association do not necessarily contribute to brand equity (Buil et al.,
2013). Contradict with Das (2014) in a food retailing study, awareness, association, and
perceived quality were proven to have significant impact on brand loyalty and purchase
intension.
Different Dimensions of Brand Equity across Industries
Norjaya et al. (2007) classified the brand equity dimensions of household electrical
appliances as brand loyalty, brand distinctiveness and brand association/awareness. Wang
et al. (2008) suggested that global brand equity consisted of quality perception, brand
awareness, brand resonance, and corporation ability association. Xu and Andrew (2009)
defined the conceptual framework of hotel brand equity as brand loyalty, brand
association, brand awareness and quality of experience. Thus, researchers have to
monitor the dimensions of brand equity within the specific industry (Christodoulides and
de Chernatony, 2010). As for fast food industry, brand familiarity (Schlosser, 2002) and
brand trust (Delgado-Ballester and Munuera-Aleman, 2005) were proposed as additional
dimensions as they indicated as important dimensions in the context of fast food (Tan et
al., 2011).
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FIGURE 1. CONCEPTUAL FRAMEWORK OF BRAND EQUITY
Source: Gil et al. (2007)
Hypotheses Development
FIGURE 2. PROPOSED RESEARCH FRAMEWORK
Note: BA=Brand awareness, PQ=Perceived quality, BF=Band familiarity, BI=Brand image,
BT=Brand trust, ABL=Attitudinal brand loyalty, BE=Brand equity.
Gursoy and McCleary (2004) argued brand familiarity was formed by the acquired
information through external sources, for instance word-of-mouth, advertising, and the
use of product. Researchers stressed out that the higher the brand awareness, the greater
the brand familiarity and reputation (D’Souza and Rao, 1995). Brand awareness insisted
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that consumers had to have greater association with its brand image; it served as a vital
element in formatting and presenting a strong brand in consumers’ memory (Keller,
1993).
H1: The higher the awareness of a brand, the greater the brand familiarity
H2: The higher the awareness of a brand, the greater the brand image
When a consumer was confronted with a familiar brand, he or she had felt emotional
closeness and confidence and increased the level of consumer experience, thus drove to
greater formation process of brand image (Zajonc and Markus, 1982). Campbell and
Keller (2003) advocated that increasing brand familiarity through accumulated customer
experiences not only created a knowledge structure for the consumer, but also built up
consumer confidence about the brand, which led to brand trust (Fullerton, 2005).
H3: The higher the familiarity of a brand, the greater the brand image
H4: The higher the familiarity of a brand, the greater the brand trust
According to brand knowledge (Keller, 1993), good evaluation of perceived quality had
increased brand association. This was because when there is good perception of quality,
positive brand image had been created due to greater brand attributes, benefits, and
attitudes as perceived by consumers. Roberts et al. (2004) had applied the concept of
purchase decision stages to rationalize the relationships between perceived quality and
loyalty. They had identified perceived quality as information evaluation stage, which had
contributed significantly to loyalty.
H5: The higher the perceived quality of a brand, the greater the brand image
H6: The higher the perceived quality of a brand, the greater the attitudinal brand
loyalty
A positive corporate image such as high competence and reliability would lead to higher
level of consumer trust (Sichtmann, 2007). Esch et al. (2006) confirmed that there was a
direct impact of brand image on a brand trust, and both direct and indirect influences of
brand image on current and future purchases. Flavián et al. (2006) had stressed that brand
image was one of the fundamental in building a sincere relationship of trust between
customer satisfaction and loyalty. When customers had favorable images towards a
certain brand, this process would exercise a positive influence on the customer’s trust
(Flavián et al., 2006) and eventually reinforced their loyalty (Kandampully and Hu,
2007).
H7: The higher the image of a brand, the greater the brand trust
H8: The higher the image of a brand, the greater the attitudinal brand loyalty
Rauyruen and Miller (2007) argued that in order to gain loyalty of customers, one must
first gain their trust. Brand trust had been recognized as a prominent variable leading to
long-term relationship with customers, which in turn affected brand loyalty in a positive
way (Matzler et al., 2008). This could be further supported by Harris and Goode (2004),
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proved that there was positive consumers trust on customer loyalty.
H9: The higher the trust of a brand, the greater the attitudinal brand loyalty
Previous studies indicated attitudinal brand loyalty had significant effect on brand equity
(Gil et al., 2007; Norjaya et al., 2007; O’loughlin, 2006; Tong and Hawley, 2009). This
showed the essential role of attitudinal brand loyalty in brand equity creation. Thus, this
study proposed the importance of managing loyalty as part of the brand equity
management.
H10: The higher the attitudinal loyalty of a brand, the greater the brand equity
RESEARCH METHODOLOGY
A preliminary study was conducted to select fast-food restaurant chains and to develop
the measurement items of brand image. According to Low and Lamb Jr. (2000), the
development of brand image scale was designed to be product-specific. Chowdhury,
Reardon and Srivastava (1998) also stated that a free response technique needed to be
applied in brand image studies. Therefore, two open-ended questions were addressed to
50 fast food consumers because it allowed for gathering consumers’ point of view,
feelings and any perspective that related to the brand image (Lindlof and Taylor, 2002).
The first question was “Please list three fast food restaurant chains in which you had
most frequently dined”; while the second question adopted Keller’s (2003) “You can
freely describe any characteristics that come to mind when you think about … (above
brand(s) name)… using any words/phrases your choice”. The result showed that the most
popular Malaysian fast food brands were McDonald’s, Kentucky Fried Chicken (KFC),
Pizza Hut, Marrybrown, and 1901 Hot Dogs.
The selected brands controlled approximately 80% fast food market share in
Malaysia (Euromonitor, 2013), represented relevant and reliable brands which finalized
in this study. 8 measurement items of brand image were developed from preliminary
study. The validity of the questionnaire was determined by academicians, who are experts
in the area of branding research studies. The reliability of the measurement items was
tested by 50 pilot surveys of fast food consumers. The range for Cronbach’s Alpha was
from 0.75 to 0.91, which satisfied the cut-off value as suggested, indicated internal
consistency for the constructs (Nunnally, 1978). The final version of measurement items
were presented in Table 1. A total number of 600 self-administrated questionnaires were
distributed because this study was in line with nonprobability sampling of previous
studies (Perez et al., 2011; Yoo et al., 2000). Klang Valley was considered as the most
populated region in Malaysia, which populated with economically and socially most
advances people from diverse ethnic compositions and demographic groups (Norzalita
and Norjaya, 2010). Structural Equation Modeling (SEM) with a confirmatory approach
was selected to analyze multivariate data. This was because SEM was frequently and
widely used technique in psychology and social sciences research (Hair et al., 2010).
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TABLE 1. MEASUREMENT ITEMS
Instrument Items Authors
Perceived quality
The staffs of X give customers individual attention. Kim and Kim
The staffs of X provide its prompt services at promised times. (2005, p.559)
The staffs of X handle complaints of customers effectively.
The staffs of X are always willing to help customers. The staffs of X are knowledgeable. Brand Awareness I am aware of X. Park (2009, p. 56)
X is highly recognized. I have heard a lot about X.
Brand Familiarity
I am familiar with X. Park (2009, p. 57)
I am knowledgeable of X. I can easily recognize X.
Brand Image Easy Preliminary study
Prompt service
Good dining environment
Pleasant
A place for social gathering
Variety of choices
Good value for money
Convenient
Brand Trust X is safe to me. Matzler et al.
I trust X. (2008, p.156)
X is reliable to me. Park (2009, p. 57)
Attitudinal Brand Loyalty I try to visit X because it is the best choice for me. Chiou and Droge
I consider myself to be a loyal customer of X. (2006, p.625)
X is special to me.
I would love to recommend X to my friends.
Brand Equity Even if there is another [fast food category] brand as delicious as
X, I still prefer X.
Gil et al. (2007, p.193)
X is definitely my choice in [fast food category].
Even if another [fast food category] brand has the same price as X,
I would still buy X.
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RESULTS
The study was collected from 1st April, 2011 to 1st May, 2011 across fast food restaurants
that located in Klang Valley, a sampling design was planned to reduce the potential bias
and increase the precision of estimates for non-probability sampling (Chang and Chieng,
2006). Subsequent to the data screening process, 15 surveys were excluded due to
incomplete responses. Thus, 585 or 97.50% of respondents were proceeding for further
analysis. Out of the pool of completed survey forms, 50.43% were male and 49.57% were
female. With respect to ethnic groups, 63.09% were Malays, followed by Chinese
26.15%, Indian 4.96%, and others 5.80%. One item of perceived quality “The staffs of X
are knowledgeable.” and three items of brand image “Easy”, “A place for social
gathering”, “Convenient” were deleted because the standardized residuals values for pair
of items were above 4.0, which deserved for deletion (Hair et al., 2010). After the
purification process, the final measurement models satisfied all the fix statistic values as
recommended by Hair et al. (2010); demonstrated perfect results for the degree of uni-
dimensionality (χ² = 859.593, χ²/df = 3.384, RMSEA =.064, SRMR = .037, CFI = .950,
PCLOSE = .06), and the p-value associated with chi-square was .0001. In term of
convergent validity, the values of construct reliability ranged from 0.86 to 0.94,
enormously above the cutoff value of 0.70 (Nunnally, 1978). Standardized factor
loadings and average variance extracted were above the cutoff value of 0.50 (Hair et al.,
2010). Table 2 presented the average variance estimated of each constructs was above the
squared correlation with other constructs. The results provided evidence that the seven
constructs were unique and had captured some phenomena that other measures had not. It
was evident that these results had contributed adequate evidence for discriminant validity
of the final measurement model (Hair et al., 2010). The goodness-of-fit statistics,
indicating the overall acceptability of the structural model analyzed, were satisfied (χ² =
917.953, χ²/df = 3.490, RMSEA =.065, SRMR = .050, CFI = .946). Out of ten hypotheses,
eight were supported and two were rejected (see Table 3). The squared multiple
correlation (R²) for brand equity was 0.74, attitudinal brand loyalty (0.62), brand trust
(0.67), brand image (0.55), and brand familiarity (0.54). However, R² was not applicable
for exogenous constructs. It was estimated that the predictors of brand equity explained
74 percent of its variance.
TABLE 2. RESULT OF THE DISCRIMINANT VALIDITY ANALYSIS
Construct 1 2 3 4 5 6 7
(AVE) 0.67 0.67 0.69 0.58 0.83 0.77 0.84
1. BA 1
2. BF 0.55(0.74**) 1
3. PQ 0.09(0.29**) 0.08(0.27**) 1
4. BI 0.14(0.38**) 0.23(0.48**) 0.44(0.67**) 1
5. BT 0.22(0.47**) 0.47(0.69**) 0.26(0.51**) 0.53(0.73**) 1
6. ABL 0.23(0.48**) 0.40(0.63**) 0.29(0.54**) 0.52(0.72**) 0.55(0.74**) 1
7. BL 0.17(0.42**) 0.32(0.57**) 0.21(0.46**) 0.35(0.59**) 0.36(0.60**) 0.75(0.87**) 1
a. **. Correlation is significant at the .01 level (2-tailed).
b. Average Variance Extracted (AVE) are greater than the squared correlation estimates, showing discriminant validity.
Note: BA=Brand awareness, PQ=Perceived quality, BF=Band familiarity, BI=Brand image,
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BT=Brand trust, ABL=Attitudinal brand loyalty, BE=Brand equity.
TABLE 3. RESULT OF THE DISCRIMINANT VALIDITY ANALYSIS
b ( 95% CI ) β se t value α Conclusion
Structural parameter estimates
H1 BA → BF 0.83 (0.71-0.95) 0.73 0.06 14.08 ** Supported
H2 BA → BI -0.07 (-0.17-0.03) -0.09 0.05 -1.38 0.17 Not Supported
H3 BF → BI 0.31 (0.21-0.41) 0.40 0.05 6.37 ** Supported
H4 BF → BT 0.48 (0.40-0.55) 0.43 0.04 10.96 ** Supported
H5 PQ → BI 0.48 (0.41-0.56) 0.59 0.04 12.65 ** Supported
H6 PQ → ABL 0.09 (-0.01-0.19) 0.08 0.05 1.84 0.07 Not Supported
H7 BI → BT 0.67 (0.51-0.83) 0.46 0.08 8.49 ** Supported
H8 BI → ABL 0.44 (0.26-0.62) 0.31 0.09 5.00 ** Supported
H9 BT → ABL 0.46 (0.36-0.56) 0.48 0.05 9.43 ** Supported
H10 ABL → BE 0.98 (0.90-1.06) 0.86 0.04 24.95 ** Supported
Squared multiple correlation R²
BA -
PQ -
BF 0.54 BI 0.55 BT 0.67 ABL 0.62 BE 0.74
Notes: b=Unstandardized parameter estimates, CI=Confidence interval, β=Standardized parameter
estimates, se=Standard error, α=Statistical significance level , ** Path analysis is significant at the
.001 level
DISCUSSIONS AND CONCLUSIONS
This model states that both perceived quality and brand awareness are the initial stage of
brand building in consumer-based context. The awareness of fast food brand served as an
important role in enlightening the relationships with brand familiarity (H1: β = 0.73, se =
0.06, t value = 14.08, α < 0.001), however, brand awareness alone was not sufficient in
providing the brand image hold in the consumer’s memory (H2: β = -0.09, se = 0.05, t
value = -1.38, α = 0.17), consistent with Tan et al.’s (2012) study. This was because fast
food brand image involved greater association of consumers’ memory than just recalling
or recognizing (Keller, 2003). Consumers had felt comfortable on trusted brand because
the brand had long-term relationships with them (Sichtmann, 2007; Matzler et al., 2008).
Therefore, the familiarity of fast food brand was essential (H4: β = 0.43, se = 0.04, t
value = 10.96, α < 0.001), as it enhanced consumers’ formation process of brand image
(H3: β = 0.40, se = 0.05, t value = 6.37, α < 0.001) and feelings of greater trust between
the restaurant brand and the consumers. These were because brand familiarity had driven
to a sense of reduced anxiety, faith in the provider, reduced perceptions of risk, and
consumers knew what to expect directly (Lee et al, 2005).
Perceived quality had positive influence on brand image (H5: β = 0.59, se =
0.04, t value = 12.65, α < 0.001), because it involved consumers in developing,
maintaining, and giving meaning to the influence of personal experience of the stimulated
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brands (Dabholkar, 1995). The finding indicated that perceived quality did not
statistically contribute to attitudinal brand loyalty in the context of fast food industry (H6:
β = 0.08, se = 0.05, t value = 1.84, α = 0.07). Nevertheless, this result was in line with
previous studies (Gil et al., 2007; Tong and Hawley, 2009). This could be further
explained that attitudinal brand loyalty had been considered as a conative construct, while
perceived quality was considered as a cognitive construct, based on arguments of
cognitive-affective-conative hierarchical model (Chiou and Droge, 2006). Perceived
quality could drive an effect on attitudinal brand loyalty through affective construct.
Affective construct would serve as the mediating variable, such as “emotional” or
“feeling” responses. Brand image exercised strong influence on brand trust (H7: β = 0.46,
se = 0.08, t value = 8.49, α < 0.001) and attitudinal brand loyalty (H8: β = 0.31, se = 0.09,
t value = 5.00, α < 0.001). Therefore, the image of fast food brand was considered
important because it served as a driver for consumers’ readiness to believe on a particular
brand, referred to its capability of promised functionality and attributes, and drove to
greater loyalty of the brand.
Brand trust contributed significantly on attitudinal brand loyalty (H9: β = 0.48,
se = 0.05, t value = 9.43, α < 0.001). It presented an emotion-driven aspect (affective
character) of long-term relational exchanged between fast food brands and consumers,
rather than the utilitarian value (cognitive character) of the brands. Attitudinal brand
loyalty played as a key variable for explicating the relationships between other
dimensions and brand equity (H10: β = 0.86, se = 0.04, t value = 24.95, α < 0.001). In
other words, fast food brand equity would not exist when there was no attitudinal brand
loyalty. Nevertheless, when there was absence of brands’ affective reactions,
attractiveness, aesthetics, or signals of benevolence (affective sense of brand trust),
consumers would less likely in repeat purchase intention, recommendation to others, or
willingness to pay a price premium. Thus, the trustworthiness of fast food brand served as
a vital antecedent for the development of attitudinal brand loyalty, which ultimately
drove to overall brand loyalty.
In term of limitation, cross-sectional data might have had limited the detection
of causal inferences (Hair et al, 2010). Therefore, a longitudinal study should be
designed, which was often used in psychology, involved a series of observations made
over long period of time. Future research could explore the possibility of a longitudinal
study through repeated observations, and invariance test across different samples should
be conducted to make certain the components of measurement model and structural
model are remained equivalent. In addition, future study should investigate the impact of
distribution intensity, price, store image, price deals, and advertising spending on fast
food brand equity as the success of a branding strategy depends on the marketing mix
(Yoo et al., 2000).
IMPLICATIONS
Malaysian fast food managers have to establish the most relevant brand input in
consumers’ mind. The focus on the identification of the brand position and sequential
order served as a necessity and crucial marketing plan in creating fast food brand equity.
Most of the Malaysian government assistance programs focused on providing advisory
services, market access, infrastructure facilities, financial assistance, and business and
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networking opportunities (Pemadu, 2012). This study provides an alternative approach
for the growth of Malaysian fast food brand, which is based on the development of
fundamental knowledge among local entrepreneurs to achieve sustainable competitive
advantage. The characteristic for each of the brand equity dimensions has to be
communicated clearly. Consequently, local fast food entrepreneurs would have the ability
to identify the antecedents and consequences of brand equity dimensions, thus will have
better blueprint for their branding strategy. Besides, the study also contributes to the
Entry Point Projects 5 of National Key Economic Areas, which increases the standard of
professional management among the local food entrepreneurs by polishing their brand
management skills (Pamandu, 2012).
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