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© 2012 Growing Science Ltd. All rights reserved.
doi: 10.5267/j.msl.2012.03.020
Management Science Letters 2 (2012) 1425–1434
Contents lists available at GrowingScience
Management Science Letters
homepage: www.GrowingScience.com/msl
The impact of social identity of brand on brand loyalty development
Zohreh Dehdashtia, Mehdi Jafarzadeh Kenaria* and Alireza Bakhshizadehb
aDepartment of Management and Accounting, Allame Tabtabaee University,Tehran, Iran
bDepartment of Management, Tarbiat Modares University, Tehran, Iran
A R T I C L E I N F O A B S T R A C T
Article history:
Received December 1, 2011
Received in Revised form
February, 14, 2011
Accepted 24 March 2012
Available online
March 25 2012
During the past few years, there have been increasing discussions on the impact of brand in
business units. Many researchers have concluded that the best way to increase sales is to
introduce the brand in society. In this study, we consider the impact of brand identity on
increasing product loyalty in one of Iranian dairy products. The proposed study is implemented
in city of Tehran by choosing 475 people. The proposed model is analyzed using structural
equation model and factor analysis. The results indicate that there is a direct positive
relationship between brand and loyalty and a powerful brand could help setup a long-term
relationship between customer and firm, which leads to brand loyalty. In other words, brand
identity influences perception value, customer satisfaction, brand trust while perception value
influences customer satisfaction and brand trust. In addition, customer satisfaction influences
brand trust, brand trust influences customer loyalty and finally brand identity indirectly
influences customer loyalty.
© 2012 Growin
g
Science Ltd. All ri
g
hts reserved.
Keywords:
Brand identity
Brand loyalty
Brand trust
Dairy products
1. Introduction
Brand is one of the most important intangible assets in any industry especially among business units.
According to Keller (2008), the most valuable asset of any firms is not their equipments or services
but it is the brand of a firm, which builds the actual value on customers' minds. According to
American marketing association (AMA), brand is the name, expression, symbol or combinations of
all these items, which builds company's identity. Brand is a commitment and it tells us that we know
this name and we trust to the name and building a mutual trust is the primary objective of creating a
brand. According brand is symbol for uniting different assets (Matzler, 2008).
One of the most important responsibilities of brands is to create loyalty among existing customers.
Existing customers are the primary sources of revenue and they could increase margin of safety for
firms. The other responsibility of brand is to provide an appropriate identity for brand and makes it as
a unique source for people.
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Kapferer (2008) believes having a unique identity makes a brand different from other brands and we
may be able to rely on for offering products and services. There have been tremendous efforts on
brand but brand identity has received little attention (Da Silveira et al., 2011). However, there is a
common fact among all people that brand identity influences people to distinguish a product from
another (Joachimsthaler & Aaker, 2000; Keller, 2008).
On the contrary to customer trust which is associated with external parameters influencing
organization, brand identity is an internal item impacting organizations (Burmann et al., 2009). Brand
identity has attracted little attention among researchers and there is literally little evidence to see any
relationship between brand loyalty and brand identity (He & Li, 2010; Marin et al., 2009).
In this paper, we look at the relationship between brand loyalty, its identity on creating brand identity.
Brand identities, perception received from brand and customer satisfaction are various issues
discussed in this paper.
2. Literature review
2.1 Brand identity
Brand identity is a set of exclusive features of a brand in terms of motto, promise and opportunities
provided for customers and could create a new identity or improving previous identities. We can say
identity is one of the most important factors for stabilizing brand and could lead it towards new
markets and products (Keller, 2003; Ghodeswar, 2008). A brand identity is considered effective when
it is accompanied with customers' needs (Joachimsthaler & Aaker, 2000).
In other words, brand identity is a long-term plan for attracting more customers (Aaker, 1996). A
brand could create an exclusive identity for its products or services when it builds sustainable and
related promises, which are believable (Ward et al., 1999). According to Silveira et al. (2011) brand
identity is not fixed issue over time but it is relatively dynamic concept and must change over time
based on environmental parameters as well as economical factors.
2.2. Brand loyalty
Brand loyalty has been extensively investigated over the past few decades (Dick & Basu, 1994;
Oliver, 1999; Harris & Goode, 2004; Evanschitzky et al., 2006) and there are different definitions for
brand loyalty but Oliver (1999) gives the best one. Based on Oliver, brand loyalty reflects a long-term
commitment of customer for repurchasing and becoming a permanent service or product receiver.
Brand loyalty can be defined as an aggressive attitude towards purchasing a particular product over
long-term horizon. This attitude could lead people to purchase from a particular brand and this is the
result of people's perception (Chaudhuri & Holbrook, 2001).
Any loyalty to a business brand is the result of repeat purchase activity, which is resulted from a
psychological decision. The activities associated with the repeated purchase of a product are not
based on people's direct intention but it is more unintentional and it is a result of different issues
including emotions, feeling, etc. In marketing issues, the concept of loyalty to brand comes along
with other words such as repurchase, preference, commitment and allegiance (Sahin et al., 2011;
Fournier & Mick, 1999; Chiou & Shen, 2006).
3. Proposed model
The proposed model of this paper builds a conceptual model for the relationship between brand
identity and loyalty. Fig. 1 shows details of the proposed model of this paper.
Z. Dehdashti et al. / Management Science Letters 2 (2012)
1427
Fig. 1. The framework of the proposed model
3.1 Brand identity and perception value
There are different definitions associated with perception value such as the difference between
revenue and cost (Khalifa, 2004), relationship between quality of different products sold under the
same brand and the value of brand (Gabay, 2009). However, in marketing, perception value has two
aspects of economical and non-economical (Ulaga, 2003; Woodside et al., 2008). Creating value is
one of the most important subjects of research and many believe perception value is significantly
influenced by brand identity (He et al., 2011). There are also some strong evidences, which indicate
that a brand with strong identity has a better opportunity to increase perception value. (Parasuraman,
et al., 1988). There are also other evidences, which show that there is positive relationship between
brand and the value of brand (Hansen et al., 2008). There are eight hypotheses associated with the
proposed study of this paper.
3.2 Brand identity positively influences perception value
Customer satisfaction is created from people's inside about how they are satisfied on received
products or services (Bitner & Hubbert, 1994). In other studies, customer satisfaction is a general
customer's feeling on goods and services customers receive (Anderson et al., 2004). In many cases, a
more prestigious and distinctive product could result on having stronger perception value
(Bhattacharya & Sen, 2008). People tend to be different from others and the more a brand is
exclusive, the stronger it is and customer provide better support for it (He et al., 2011). A prestige
brand is a particular brand, which is not only maintain a good quality but also it can be used for
pretention.
3.3 Brand identity and customer satisfaction
There is a relationship between brand identity and customer satisfaction (He et al., 2011; Chun &
Davies, 2006). Therefore, we state the second hypothesis as follows,
H2: Brand identity has positive impact on customer satisfaction.
3.4. Perception value and customer satisfaction
The more a brand could attract more customers, the more customer satisfaction we have. There are
different studies associated with these two concepts, which indicated a positive relationship between
these two items (He et al., 2011; Harris & Goode, 2004).
Brand
identity
Perception
value
Trust Loyalty
Satisfaction
H1
H2
H4H3
H5
H6
H7
H8
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H3: Perception value has a positive impact on customer satisfaction.
3.5. Brand identity and trust
Trust is the ability to rely or to accept an attribute associated with an object or a person. Trust to a
brand is a psychological aspects, which reflects all assumptions hold on the reliability of a particular
product or services (Doney & Cannon, 1997). Trust on a brand is associated with credibility, integrity
and benevolence (Gurviez & Korchia, 2002; Simoes, 2005; Elliott &Yannopoulou, 2007; Walsh et
al., 2009). The following hypothesis is established for the proposed study of this paper.
H4: brand identity increases customers' trust.
3.6. Perception value and trust
As we have already explained, customer perception from brand value is a function of their perception
and a particular brand has various values from different people's perspectives. There are different
studies associated with perception value and trust (Parasuraman & Grewal, 2000; Sirohi et al., 1998;
Sweeney, et al., 1999). However, there are only a limited number of studies on relationship between
perception value and supportive trust (Singh & Sirdeshmukh, 2000, Harris & Goode, 2004).
Anderson and Srinivasan (2003) explained that perception and trust both could positively impact
customer satisfaction and loyalty. Sirdeshmukh et al. (2002) performed an empirical study on the
relationship between perception value and trust.
H5: Perception value from a brand influences on brand trust, positively.
3.7 Customer satisfaction and trust
There are literally many studies, which describes customer satisfaction is an emotional response to a
purchase opportunity (Bagozzi et al., 1994; Anderson & Narus, 1990; Bennet et al., 2005; Sahin et
al., 2011). When a purchase yields a positive reaction, trust on brand is an immediate outcome. Trust,
on the other hand, is the result of historical transaction. Trust on brand can be a result of
advertisement, world of mouth advertisement and satisfaction from the purchase (Krishnan, 1996). It
is relatively difficult to find a cause-and-effect relationship between customer satisfaction and trust.
In other word, we cannot precisely say that customer satisfaction is the result of trust and trust is a
function of customer satisfaction. He et al. (2011) confirmed the effect of customer satisfaction on
trust and others considered the effects of trust on customer satisfaction (Harris & Goode, 2004; Lam
et al., 2004; Sichtmann, 2007; Sahin et al., 2011, Orth & Green, 2009; Tsai, 2011).
H6: Customer satisfaction influences positively on brand trust.
3.8. Trust and loyalty to brand
Trust and loyalty have close relationship with each other. The more a customer trust to a particular
brand, the more he/she will purchase that kind of product. Human being is naturally interested in
reducing risk and this motivates many to become loyal to products and services. Trust can be defined
as the degree of peace of mind where customer can rely on vendor (Agustin & Singh, 2005). The
more customer trusts a particular brand, the more customer become loyal to that brand
(O’Shaughnessy, 1992). Therefore, a purchase happens without performing any cost/benefit analysis
(Lau & Lee, 1999). Therefore, building a brand yields a long-term relationship between customer and
firm (Agustin & Singh, 2005; Amine, 1998). Trust plays an important role in creating customer-brand
relationship and has a positive impact on loyalty to brand (Sahin et al., 2011). Customer trust to a
brand is a result of positive believes on organizational behavior expectations and performance of
Z. Dehdashti et al. / Management Science Letters 2 (2012)
1429
products (Ashley & Leonard, 2009). Trust will increase customer loyalty and in long term loyal
customer will be more loyal (Chiou & Shen, 2006; Sweeney & Swait, 2008; Ambler, 1997; Mazodier
& Merunka, 2011).
H7: Trust to a brand will positively influence on customer loyalty.
3.9. Brand identity and loyalty
As we have explained earlier, brand has relationship with three items of perception value, customer
satisfaction and trust. We can explain that there is an indirect relationship between brand identity and
on trust through three variables of perception value, customer satisfaction and trust.
H8: Brand identity indirectly has positive impact on customer loyalty through three variables of
value, satisfaction and trust.
4. Results
The proposed study of this paper has designed a questionnaire and distributed among a randomly
selected people who live in city of Tehran, the capital city of Iran. The proposed study was
concentrated on a firm, which was one of major diary providers in Iran called Kalleh Diary
Corporation.
Table 1
Statistical observations for the proposed study
Standardized factor loading Cronbach alpha AVE
Brand identity 0.853 0.56
This brand is superior to other brands. 0.75
This is a high quality brand with high prestige level. 0.68
This brand is very famous. 0.75
This brand has an exclusive identity. 0.84
Perception value of brand. 0.798 0.58
I am happy about what I paid and the value I gained. 0.77
The products of this brand have been priced, properly. 0.82
Based on what I received I pay relatively fair price. 0.73
Customer satisfaction 0.853 0.65
I am completely satisfied from this brand. 0.77
I am confident that I am always happy about the brand. 0.84
I am happy about the products of this brand. 0.81
I believe this brand could completely satisfy my expectations. 0.77
Trust to brand 0.891 0.59
I trust to all brands' products. 0.75
I have never had a bad experience on this brand. 0.77
This brand has a nice image among people. 0.79
If this brand claims a good feature, that would be true. 0.73
This is an honest brand. 0.79
Brand loyalty 0.865 0.54
This brand has exactly the same features as I wish. 0.79
I prefer this brand to other ones. 0.70
I have a negative attitude towards this brand. 0.73
I like the features of this brand. 0.78
This brand has a better performance compared with other brands. 0.75
I always prefer this brand to other brands. 0.55
I always wish to examine this brands' products. 0.76
We have randomly selected some grocery shopping centers, which were selling this brand's dairy
products and have distributed some questionnaires among their customers, and collected 475 filled
1430
ones. All questions were designed based on Likert based scale from completely disagree to
completely agree. All questions were selected based on a survey accomplished on relevant literature
(He et al., 2011; Tong & Hawley, 2009; Washburn et al., 2004; Allen & Meyer, 1990; He et al., 2011;
Tam, 2004). The reliability of all test components has been examined using both convergent and
discriminate validity. Standardized factor loading as well as Average variance extracted were
measured and they were well above 0.5, which is the minimum desirable level (Fornell & Larker,
1981). Cronbach Alpha was calculated for all questions and they were well above 0.7, which is the
minimum acceptable level (Nunnally, 1978). Table 2 shows correlation ratios among different
components of our proposed study.
Table 2
Correlation ratios
Value Satisfaction Trust Loyalty Brand identity Mean
Value 1.00 3.14
Satisfaction 0.45 1.00 3.00
Trust 0.50 0.80 1.00 2.92
Loyalty 0.37 0.59 0.74 1.00 3.09
Brand identity 0.62 0.74 0.73 0.54 1.00 3.10
We have performed goodness of fit for different tests and the results of our investigations are
summarized in Table 3.
Table 3
Statistical test results for goodness of fit
Acceptable regionValueAttribute
898.34
2
χ
412df
Less than 3 2.18
2 ⁄dfχ
Less than 0.1 0.041 RMSEA
Greater than 0.9 0.98NFI
Greater than 0.90.99NNFI
Greater than 0.90.98CFI
Greater than 0.90.99IFI
Greater than 0.90.93GFI
Greater than 0.80.92AGFI
In addition, Table 4 demonstrates the results of our test results on different hypotheses.
Table 4
The results of t-student tests
Results
)r2
(
Path coefficient (
β
)
t-value Hypothesis
Confirmed 0.44 0.6212.51**
The effect of identity on value
Confirmed0.63 0.65 15.91**
The effect of identity on satisfaction
Confirmed0.69 0.19 1.64*
The effect of value on satisfaction
Confirmed0.69 0.223.37**
The effect of identity on trust
Confirmed0.69 0.0971.95*
The effect of value on trust
Confirmed0.69 0.609.61**
The effect of satisfaction on value
Confirmed0.62 0.7414.66**
The effect of trust on loyalty
Confirmed0.33 0.5413.01**
The effect of identity on loyalty
*p<0.05 **p<0.01
4.1. First hypothesis
As we can observe from the results of Table 4, t-student maintains a meaningful ratio for the test
leading us to conclude that brand identity influences perception value. The path ratio shows that an
increase of one unit in brand identity will increase perception value for 0.62 with the probability of
0.99. The ratio of r2 shows that brand identity can describe 44 percent of perception value.
Z. Dehdashti et al. / Management Science Letters 2 (2012)
1431
4.2. Second hypothesis
As we can observe from the results of Table 4, t-student maintains a meaningful ratio for the test
leading us to conclude that brand identity influences customer satisfaction. The path ratio also
demonstrates that an increase of one unit in brand identity will increase customer satisfaction for 0.65
with the probability of 0.99. The ratio of r2 demonstrates that brand identity can describe 63 percent
of customer satisfaction.
4.3. Third hypothesis
As we can observe from the results of Table 4, t-student maintains a meaningful ratio for the test
leading us to conclude that perception value influences customer satisfaction. The path ratio also
demonstrates that an increase of one unit in perception value will increase customer satisfaction for
0.19 with the probability of 0.99. The ratio of r2 explains that perception value can describe 69
percent of customer satisfaction.
4.4. Fourth hypothesis
As we can observe from the results of Table 4, t-student maintains a meaningful ratio for the test
leading us to conclude that brand identity influences brand trust. The path ratio also demonstrates that
an increase of one unit in brand identity will increase brand trust for 0.62 with the probability of 0.99.
The ratio of r2 we can understand that brand identity can describe 69 percent of brand trust.
4.5. Fifth hypothesis
As we can observe from the results of Table 4, t-student maintains a meaningful ratio for the test
leading us to conclude that perception value influences brand trust. The path ratio also demonstrates
that an increase of one unit in brand trust will increase perception value for 0.097 with the probability
of 0.99. From the ratio of r2, we can understand that perception value can describe 69 percent of
brand trust.
4.6. Sixth hypothesis
As we can observe from the results of Table 4, t-student maintains a meaningful ratio for the test
leading us to conclude that customer satisfaction influences brand trust. The path ratio also
demonstrates that an increase of one unit in brand trust will increase customer satisfaction for 0.60
with the probability of 0.99. The ratio of r2 implies that perception value can describe 69 percent of
brand trust.
4.7. Seventh hypothesis
As we can observe from the results of Table 4, t-student maintains a meaningful ratio for the test
leading us to conclude that brand trust influences customer loyalty. The path ratio also demonstrates
that an increase of one unit in brand trust will increase customer loyalty for 0.74 with the probability
of 0.99. The ratio of r2 implies that trust value can describe 62 percent of brand loyalty.
4.8. Eighth hypothesis
As we can observe from the results of Table 4, t-student maintains a meaningful ratio for the test
leading us to conclude that brand identity indirectly influences customer loyalty. The path ratio also
demonstrates that an increase of one unit in brand identity will increase customer loyalty for 0.54
with the probability of 0.99. The ratio of r2 implies that brand identity can describe 33 percent of
brand loyalty.
1432
5. Conclusion
In this study, we have considered the impact of brand identity on increasing product loyalty in one of
Iranian dairy products. The proposed study has implemented in city of Tehran by choosing 475
people and it was analyzed using structural equation model and factor analysis. The results indicated
that there was a direct positive relationship between brand and loyalty and a powerful brand could
help setup a long-term relationship between customer and firm, which leads to brand loyalty. In other
words, brand identity influences perception value, customer satisfaction, brand trust while perception
value influences customer satisfaction and brand trust. In addition, customer satisfaction influences
brand trust, brand trust influences customer loyalty and finally brand identity indirectly influences
customer loyalty.
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