1.0 Introduction

Business environment is very challenging and there are not easy profits for any company. To enhance business performance of a company, scholars believed that it is necessary for a company to achieve competitive advantage. There are many strategies suggested on how a company may achieve competitive advantage in the very challenging business environment, and one of the strategies believed to be effective is to achieve competitive advantage through branding (Khosravi, Shafei & Salavati, 2012). This is actually a common sense as it is through a brand that consumer differentiate the many different products or services available in the marketplace (Panchal, Khan & Ramesh, 2012). Thereby, a brand is something that will always be considered by consumers in making purchase decision. It is through a brand that a company connects or communicates with the consumers, and more importantly, influence the consumer to make relevant purchase decision (Eser, Pinar, Girard & Isin, 2012; Taylor, Hunter & Lindberg, 2007).

Under the field of branding, one of the important academic concepts that is also highly practical is about the concept of brand equity. Theoretically, successful branding strategy will lead to enhancement of brand equity (Malik & Naeem, 2011). Brand equity in turn can be very helpful or powerful in enabling a company to deal with the competition, to enhance profitability or to maintain market share (Pughazhendi & Thirunavukkarasu, 2012; Liaogang, Chongyan & Zi’an, 2007). Aside from that, the concept of brand equity actually allow scholars as well as managers to measure or assess the branding related efforts, performance or constructs of a company (Taylor, Hunter & Lindberg, 2007). In other words, the concept of brand equity is suitable for research as well – as it allow researchers to measure and further examine about the branding efforts or outcomes of the subject company.

Aside from brand equity, another important academic concept within the context of marketing management is about customer loyalty. This is especially true as the business environment is becoming more competitive and challenging. To explain, one of the impacts of that is that it can be hard to retain customers. Under such a business environment, it is then not surprising that customer loyalty has been a subject widely studied within the academic circle for the past few decades (Helena & Sampaio, 2012; Haghtalab, Ahrari & Amirusefi, 2011). Theoretically, customer loyalty is a favourable outcome due to ability of a company service the customer well or in fulfilling the needs and wants of the customers. Customer satisfaction is critical as it is a useful construct that can be used to predict the future attitudes as well as behaviours of the customers (in case of purchase behaviours particularly), and that loyal customers would also more likely to spread goods news about a company to their friends or relatives (Alrubaiee & Al-Nazer, 2010; Hafeez & Muhammad, 2012). For a company to be successful, it is crucial to enhance the degree of customer loyalty, or to increase the amount of loyal customers (Jafarnejad, Shahroudi & Mousagholizadeh, 2012; McMullan & Gilmore, 2008). This is even more relevant as it is hard (and not forget to mention, more costly) to get a new customer, as compared to retaining a loyal customer. In other words, to retain customer, to having strategies to turn existing customers into more loyal customers is a smarter move, and yet it is also cost efficient (Benjamin, 2006; Cheng & Chi, 2009). Indeed, simple observation on the market situation would also note that those highly successful companies are also those that have high degree of customer loyalty, such as Tesco, Wal-Mart, Southwest Airlines, Starbucks, and last but not least, Apple Inc.

In this essay, a review of the relevant literature related to the two main issues discussed earlier will be provided. These two issues are: (i) brand equity, and (ii) customer loyalty. To manage the discussion process, the construct related to brand equity will be firstly discussed. This will include issues such as the definition, theoretical concept, as well as studies related to brand equity. Then, the discussions will in turn focus on the definition, theoretical concept, and studies related to customer loyalty. Upon the discussions on both brand equity and customer loyalty, a review of how the two constructs are related to each other will also be provided. In the final part of this essay, a theoretical framework depicting the relationship between brand equity and customer loyalty will also be provided.

2.0 Brand Equity

2.1 Definition

There are many different definitions provided by researchers or scholars on the term ‘brand equity’. To understand about the concept of brand equity better, a review of these definitions suggested by scholars will be provided, and reviewed.

For instance, in Kayaman & Arasli (2007), the definition of brand equity employed is from Aaker’s definition of brand equity, which state that brand equity is “a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers”. Such a definition is also quite common, being employed by other researchers as well. For example, within Panchal, Khan & Ramesh (2012) as well as Washburn, Till & Priluck (2004).

Yet, the definition, employed in Kim & Bumm (2004), however is as follow: “the differential effect of brand knowledge on customer response to the marketing of the brand”. This particular definition originated from Keller, and was also widely employed within the literature. Among the other scholars that had employed such definition, include the following: Eser, Pinar, Girard & Isin (2012), Taylor, Hunter & Lindberg (2007), Kayaman & Arasli (2007) and Washburn, Till & Priluck (2004).

As such, it can be seen that there are two major definitions being used in literature. The two definitions are actually not contradicting (with each other). In this dissertation, both the definition will be relied upon, and arrive as a definition of brand equity as follow: “the differential effect of brand knowledge on customer response to the marketing of the brand, that can add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers”.

In the context of brand equity, the most widely discussed concept is actually the concept of ‘customer based brand equity’, of which this is also the concept to be investigated within this dissertation. The concept of customer based brand equity is argued to be important in the context of marketing is because that since how the impacts a brand can exert on consumers is through how consumers learned, felt, seen, and heard about the brand over time, branding related issues should therefore be examined from the perspectives of customers or consumers (Kim & Bumm, 2004; Eser, Pinar, Girard & Isin, 2012). In this dissertation, the concept of customer based brand equity will be employed. For ease of reading, the term ‘brand equity’ and ‘customer based brand equity’ will be used interchangeably.

The concept of brand equity is especially useful in measuring and hence managing the branding efforts of a company (Taylor, Hunter & Lindberg, 2007). It is practical as well as it focus on the perceptions of the customers, whereby customers can provide the feedback to the branding efforts of a company (Kayaman & Arasli, 2007). In theory, a brand possesses positive brand equity when the customers on average would react positively to a brand (as well as towards product, price, promotion, and distribution of a branded product), and vice versa (Washburn, Till & Priluck, 2004; Eser, Pinar, Girard & Isin, 2012). In short, positive brand equity would be the desirable outcomes of each and evert companies, seeking competitive advantage in the very challenging business environment.

2.2 Theoretical Framework of Brand Equity

Within the literature, scholars had also developed varieties of theoretical framework of brand equity, to guide the research into the construct of brand equity. Indeed, scholars believe that brand equity shall be examined from multiple dimensions, as to approach the concept of brand equity from only a single or two dimension, would result in a lack of richness necessary to provide integrative theoretical insights and marketing solutions to marketers or managers (Eser, Pinar, Girard & Isin, 2012; Kim & Bumm, 2004). In other words, brand equity shall be approached or examined from multiple dimensions.

However, different scholars model the concept of brand equity differently. For example, in Liaogang, Chongyan & Zi’an (2007), brand equity is modelled to be consisted of the following dimensions: brand associations, brand awareness, brand loyalty, as well as perceived quality. Similar model is also employed by the following scholars: Pappu & Quester (2006), Priluck & Till (2010), and Bojei & Hoo (2012).

Yet, in Kim & Bumm (2004), brand equity is modelled to be at follow: brand awareness, brand image, brand loyalty, as well as perceived quality. Similar model is also employed by the following scholars: Chen & Tseng (2010), Rüçhan & Arasli (2007), Kayaman & Arasli (2007), and Al-Dmour, Al-Zu’bi & Kakeesh (2013). The description of each of these dimensions of brand equity is provided below.

Table 1: Dimensions of Brand Equity

Source: Kayaman & Arasli (2007) and Keller (1993)

Other than that, scholars such as Eser, Pinar, Girard & Isin (2012) model brand equity as consisted of these dimensions: brand association, brand image, brand loyalty, brand personality, organisational association, as well as perceived quality. The descriptions of each of these dimensions are outlined according below.

Table 2: Dimensions of Brand Equity (2)

Source: Eser, Pinar, Girard & Isin (2012) and Aaker (1991)

There are many other models of brand equity being developed by scholars to guide the research or discussion on brad equity. For instance, Ming, Bin Ismail & Rasiah (2011) model brand equity as consisted of: brand awareness, brand familiarity, perceived quality, brand image, brand trust and attitudinal brand loyalty. Yet, in Taylor, Hunter & Lindberg (2007), brand equity is modelled to be consisted of the following dimensions: brand performance, brand social image, brand value, brand trustworthiness, and brand attachment. Last but not least, Keller (2003) had modelled brand equity to be consisted of: brand salience, brand performance, brand imagery, brand judgments, brand feelings and brand resonance.

Obviously, there are many different academic brand equity frameworks that can be used. Indeed, it is understandable as in different business context; brand equity shall be modelled differently. Nevertheless, it can be understood from this review that brand equity tends to consist of these dimensions: brand associations, brand awareness, brand image, brand loyalty, as well as perceived quality.

2.3 Importance of Brand Equity

Aside from that, scholar also discussed about the importance of brand equity – and such issue will also be briefly reviewed here. Indeed as discussed in Liaogang, Chongyan & Zi’an (2007), it is argued that most companies are currently realising that brand equity is one of their most valuable intangible assets. This is easily understood, as strong brand equity can lead to (or indicate) these outcomes: high degree of brand awareness, favourable brand image, high degree of perceived product quality or service quality, high degree of loyalty towards a brand (Liaogang, Chongyan & Zi’an, 2007), increased consumers’ disposition toward organisations and their products, greater tendency to making purchase, increased profitability for a company through increased market share (Eser, Pinar, Girard & Isin, 2012; Kim & Bumm, 2004), lowering of business costs, as well as other marketing benefits (such as supportive of other brand extension exercise and licensing opportunities) (Kayaman & Arasli, 2007). In short, there are many financial as well as non-financial benefits to be reaped by a company that possess positive brand equity. Such notion reaffirms the necessity of managerial focus on building strong brand equity in the competitive business environment. In the next section, some past studies on brand equity will be outlined accordingly.

2.4 Studies Related to Brand Equity

First of all, there are many studies examining about the inter-relationship between the various dimensions of brand equity – or how the various dimensions of brand equity is related or affecting brand equity. Some of these studies will be presented in the subsequent paragraphs.

First of all, Chen & Tseng (2010) examined about inter-relationships among four dimensions of brand equity (i.e., brand awareness, brand image, perceived quality, and brand loyalty) and their influences on brand equity – with the focus of research on the airline industry in Taiwan. It id found that brand loyalty is the main antecedent of brand equity, and that all of the dimensions of brand equity indeed are inter-related.

Besides, Rüçhan & Arasli (2007) had also examined about the inter-relationship between the four dimensions of brand equity, namely: brand awareness, brand loyalty, perceived quality and brand image – with the focus on the hotel industries. It is found that aside from brand awareness, all the other three dimensions of brand equity (i.e., brand loyalty, perceived quality and brand image) indeed are related significant to the overall brand equity of a company.

Apart from that, Tong & Hawley (2009) had also examined into how the various dimensions of brand equity are inter-related and how these dimensions are affecting the overall brand equity of a company – with the focus on the Chinese sportswear market. It is found that brand association and brand loyalty are influential dimensions of brand equity, while the impacts from perceived quality and brand awareness are less obvious or material. From that, it is argued that greater emphasis shall be placed upon managing brand loyalty as well as brand image, for a manager to improve the brand equity of a firm.

In addition to that, in the research by Biedenbach (2012), the compositions of brand equity as well as the inter-relationships between the dimensions of brand equity is examined, with a focus on the Big Four auditing firms in Sweden are examined. It is found that there are hierarchical effects between the four dimensions of brand equity, namely: brand awareness, brand associations, perceived quality and brand loyalty.

Yet, in the study performed by Dollatabady & Amirusefi (2011), the aim is to examine about the brand equity and its dimensions – with the focus on LG versus SAMSUNG brand, based on household supplies consumers in Isfahan City, Iran. It is found that all of the four dimensions of brand equity being investigated (i.e., brand awareness, perceived quality, brand loyalty, brand association) affect brand equity.

There are many other studies being conducted to examine about the inter-relationships between the various dimensions of brand equity, and how these dimensions of brand equity may affect the overall brand equity of a particular brand. Generally, these studies found that the various dimensions of brand equity indeed influence the overall brand equity, and that the various dimensions of brand equity are inter-related (although the influences from the various dimensions of brand equity towards the overall brand equity might differ). It is however not within the intent of this dissertation to discuss about all of the studies in details. Therefore, these studies will be listed here: Ming, Bin Ismail & Rasiah (2011), Malik & Naeem (2011), Buil, Martínez & de Chernatony (2013), Dollatabady & Amirusefi (2011), Hakala, Svensson & Vincze (2012), Chahal & Bala (2012), Véronique & Raluca (2012) and Atilgan, Aksoy & Akinci (2005). Readers whom are interested on this area can refer to these journals for more information.

Aside from investigating into the inter-relationships between various dimensions of brand equity, scholars have also been interested on examining about the antecedents of brand equity. Some of these studies will also be briefly provided here. First of all, study by Lee, Kumar & Youn-Kyung (2010) examined about the effects of gender, need for uniqueness, and Indian consumers’ attitudes toward American products on various dimensions of brand equity – with a focus on the apparel industry. Based on that study, it is found that there are direct and indirect effects of Indian consumers’ gender, need for uniqueness (NFU), and attitudes toward American products on three dimensions of brand equity: perceived quality, brand loyalty, and brand associations with brand awareness.

Aside from that, scholars such as Rios & Riquelme (2010) had also examine about the antecedents for online companies (i.e., how internet marketing activities affect brand equity of an online firm). It is found that factors such as functionality, fulfilment and online customer service significantly affect these dimensions of brand equity: brand awareness and recognition, brand association (trust) and brand loyalty.

Then, Yoo, Donthu & Lee (2000) had also examined about how these factors, specifically: price, store image, distribution intensity, advertising spending, as well as price deal affect the brand equity of retailers. Interestingly, it is found that too frequent price promotion (i.e., discount, by lowering the price charged to consumers) will lower the brand equity of a firm. Contrary to that, high advertising spending, high price, good store image, and high distribution intensity are related positively to brand equity.

Nevertheless, there are many other such studies that examine into antecedents of brand equity, and it is not possible to discuss them all in details. Anyway, some of the many antecedents found to be significant in affecting brand equity, include: customer experience (Biedenbach & Marell, 2010), uniqueness of products (Anselmsson, Johansson & Persson, 2007), country of origin of a brand (Pappu, Quester & Cooksey, 2006; Norjaya, Mohd & Mohamad, 2007; Moradi & Zarei, 2012), marketing communication, marketing mix or marketing initiatives of a firm (Villarejo & Manuel, 2005; Baldauf, Cravens, Diamantopoulos & Zeugner-Roth, 2009), advertising spending (Bravo Gil, Fraj Andrés & Martínez Salinas, 2007; Hong-Youl, Joby, Janda & Muthaly, 2011), word of mouth (WoM) effects (Xu & Chan, 2010), perceptions of consumers (Wei-Tsong & Hui-Min, 2012; Sheau-Fen, Sun-May & Yu-Ghee, 2012; Smutkupt, Krairit & Khang, 2012), as well as service quality (Jahanzeb, Fatima & Muhammad, 2013).

Anyway, there are also some studies available on how brand equity affects the various outcomes or performance dimensions of a company. Some of these studies will also be briefly provided, as to deepen understanding on how brand equity may affect a company, aside from affecting customer loyalty towards the company itself. For that, Bumm, Kim & An (2003) had examined about the effect of brand equity on firms’ financial performance – with the focus on luxury hotel firms. Under the study, it is found that all of the three dimensions of brand equity, namely: brand loyalty, perceived quality, and brand image are significant in influencing the financial performance of these hotels.

Other than that, scholars such as Jung & Young (2008) examine into cross culture and brand equity effects on purchase intention – with the focus on three consumer groups across cultures (i.e., Americans in the USA, South Koreans in the USA, and South Koreans in Korea) in the apparel industry. In the study, it is found that cross culture indeed moderated the relationships between brand equity to purchase intention. Then, one of the dimensions of brand equity, namely brand loyalty showed most positive and significant correlation with purchase intention.

Overall, the discussion shows that brand equity indeed can affect many outcomes pertaining to an organisation. There are some other studies, and the results of these studies indicated that brand equity can affect (or significantly related to): customer satisfaction (Pappu & Quester, 2006), employee brand commitment (Kimpakorn & Tocquer, 2010), advertising effectiveness (Ranjbarian, Abdollahi & Khorsandnejad, 2011), repurchase intention (Bojei & Hoo, 2012), as well as firms’ performance (Kim & Bumm, 2004).

Overall, evidences suggested that the notion that brand equity can affect financial and non-financial performance of a firm is supported. Given that, it is indeed rational to also expect that brand equity can affect customer loyalty, in the context of this dissertation. There are indeed some empirical evidences that brand equity can affect customer loyalty. Before discussing on these issues, a review on definition, conceptual framework as well as studies related to customer loyalty will be firstly presented in the next section.

3.0 Customer Loyalty

3.1 Definition

As defined by Zaman, Bibi, Arshad & Shahzad (2012), customer loyalty can be defined by customer’s preference of choosing one products over other one for an exacting need. Then, as discussed in McMullan (2005), customer loyalty is about a special kind of customer attitude and behaviour towards the product, service or any other aspect of an organisation.

Yet, in Cheng & Chi (2009), customer loyalty is defined as a situation that occur when customers repeatedly purchase a good or service over time and customers hold favourable attitudes towards a good or service, or towards the company supplying the good or service. In a similar way, Kursunluoglu (2011) defined customer loyalty as a commitment forming profoundly about being a steady customer (patronizing) or purchasing again in the future the preferred product or service.

Other than that, McMullan & Gilmore (2008) had argued however that the most frequently employed definition of customer loyalty is one that is proposed by Jacoby and Kyner (1973), as follow: the biased (i.e. non-random), behavioural response (i.e. purchase), expressed over time, by some decision making unit, with respect to one or more alternative brands out of a set of such brands, and is a function of psychological (i.e. decision making, evaluation) processes. Yet, as cited in Alrubaiee & Al-Nazer (2010), Oliver (1999) defined customer loyalty as a deeply held commitment to repurchase or re patronize a preferred product or service in the future despite there are situational influence and marketing efforts having the potential to cause switching behaviour.

Nonetheless, Helena & Sampaio (2012) however argued that a more commonly used definition of customer loyalty is proposed by Dick and Basu (1994), that state that customer loyalty is about a consistent repeat purchase or use resulting from the psychological attachment to the brand and situational factors, such as marketing efforts that can cause behavioural changes. Some other scholars that had adopted such definition include Donio’, Massari & Passiante (2006).

However, there are also scholars that argued that definition of customer loyalty must be differentiated, from two dimensions, such as: from attitudinal versus the behavioural perspectives. As discussed in Garland & Gendall (2004), from the attitudinal perspective, customer loyalty is about the attitudes or beliefs towards a brand, manifested in an emotional attachment to the brand, on in the issues if a customer is willing to recommend certain products to the friends. Then, from the behavioural perspective, customer loyalty is about the regular purchasing of a particular brand. Nevertheless, some other scholars even suggested the composite approach to customer loyalty – whereby both the attitudinal and behavioural perspective must be considered in defining customer loyalty (Cater & Cater, 2009; Dimitriades, 2006).

Anyway, it is crucial to distinguish also about the construct of customer loyalty versus brand loyalty. As discussed above, brand loyalty is one of the many dimensions of brand equity. However, customer loyalty is not. To explain, customer loyalty is a more holistic concept (i.e., not specific or limited to the loyalty towards the brand). In other words, customer loyalty is about loyalty to all of the following: brand, product as well as the services (Hafeez & Muhammad, 2012; McMullan, 2005). For the purpose of this study, customer loyalty will be defined as the loyalty towards the products and services offered by Apple versus Lenovo – in order to distinguish it from the loyalty towards the brand. Then, the customer loyalty involved in this study will also be more about the purchase behaviours of customers and willingness to recommend certain product or brand to the friends, as to differentiate it with the concept of brand loyalty (which is, largely about a positive emotional attachment to a brand).

3.2 Theoretical Concept of Customer Loyalty

In a similar case as to brand equity, customer loyalty is also often examined from multiple dimensions. This is reasonable and indeed necessary, as the customer can express his or her loyalty in many different ways (Söderlund, 2006), and hence, a multi dimensionality approach to investigate about customer loyalty is indeed justified and necessary.

Nevertheless, many of the scholars believe that customer loyalty shall be modelled as a two-dimensional construct, as follow: attitudinal loyalty versus behavioural loyalty (Garland & Gendall, 2004). For example, as cited in Siddiqi (2011), scholars such as Dick and Basu (1994) separated customer loyalty into these two dimensions: relative attitude and repeat patronage behaviour. These two dimensions, actually is similar to the paradigm that loyalty can be assessed from attitudinal and, or the behavioural perspectives.

However, there are also many scholars that believe customer loyalty shall be examined from more dimensions. For instance, Kursunluoglu (2011) discussed that customer loyalty can be approached from three dimensions: behavioural loyalty (i.e., repetitious purchases), attitudinal loyalty (i.e., positive emotion towards a product or service), and composite loyalty (i.e., a synthesis of the attitudinal and the behavioural approach, an concerns about customer’s product preferences, propensity of brand switching, frequency of purchase, or total amount of purchase). In a similar manner, Donio’, Massari & Passiante (2006) also separated customer loyalty from three dimensions, as follow: attitudinal loyalty (i.e., that will affect relationships of a person to a brand), behavioural loyalty (i.e., the pattern of purchase made in the past), and actual buying behaviours. Other than that, scholars such as Helena & Sampaio (2012) also employ a model of customer loyalty that consisted of: attitudinal, behavioural, and composite dimensions.

Yet, some scholars also do not examine the issues related to customer loyalty from the attitudinal versus/ or behavioural paradigm. For example, Cheng, Lai & Yeung (2008) examine about customer loyalty from these three dimensions: switching behaviours or tendency, continuing intention to purchase or consume certain product, and the willingness to recommend a product or service to others. In a similar manner, Aydin, Özer & Arasil (2005) also employed a model of customer loyalty that consisted of these dimensions: purchase intention, switching tendency or behaviours, as well as the willingness to recommend products to others.

Anyway, another important issue is about the issues on antecedents of customer loyalty. For that, scholars had also developed many different frameworks in trying to explain about antecedents of customer loyalty. A few of such frameworks developed by scholars will be presented as well. For that, Kumar & Srivastava (2013) developed a framework that argues that the antecedents of customer loyalty include these: service quality, customer satisfaction, trust, commitment, corporate image, switching costs, as well as communication. Such a framework is shown below.

Figure 1: Framework by Kumar & Srivastava (2013)

In a similar manner, Zaman, Bibi, Arshad & Shahzad (2012) developed a framework that argues that antecedents of customer satisfaction include these: customer satisfaction, trust, and corporate reputation. Such a theoretical framework is shown below.

Figure 2: Framework by Zaman, Bibi, Arshad & Shahzad (2012)

Last but not least, the theoretical framework developed by Cater & Cater (2009), as shown below, postulates that among the antecedents of customer loyalty include: direct product costs, product quality, delivery performance, supplier know how, time to market, service support, personal interaction, as well as customer satisfaction.

Figure 3: Framework by Cater & Cater (2009)

Overall, these frameworks show that antecedents of customer loyalty are indeed issues widely studies and researched by scholars. However, it can also be seen that the impacts of brand equity on customer loyalty are indeed something neglected by scholars (as many of the models developed to portray antecedents of customer loyalty ignore about the importance of brand equity as antecedents of customer loyalty). That again reaffirms the necessity to conduct this particular study within this dissertation, to cover the gap in the literature.

3.3 Importance of Customer Loyalty

Customer loyalty has always been perceived as important aspect of business management or marketing management. There are many reasons provided by scholars on that. For example, as discussed in Gould (1995), some of the advantages or benefits of having loyal customers are: lowering of the cost pertaining to customer acquisition, the customers are more likely to be less price-sensitive when they are loyal, and that the loyal customers are likely to be more responsive to marketing promotional events organised by a company. Yet, as discussed by McMullan & Gilmore (2008), when a firm has many loyal customers, revenue or profitability can be enhanced as loyal customers would tend to rebuy or re-patronize a preferred product or service consistently in the future. Other than that, Reynolds & Arnold (2000) also argued that when customers are loyal, they are more likely to provide new referrals through positive word of mouth, aside from exhibit low tendency of switching behaviours – of which both can contribute significantly to the final financial outcomes of a company. Indeed, other scholars such as Siddiqi (2011) as well as Helena & Sampaio (2012) also believe that customer loyalty can lead to more purchase behaviours from the customers, of which can directly affect the future profitability of a company.

3.4 Studies Related to Customer Loyalty

The various sections above had discussed about the theories pertaining to customer loyalty. In this section, a review of the previous studies concerning customer loyalty will be provided. First of all, many scholars had tried to investigate about factors that are related or are affecting customer loyalty. These studies will be presented accordingly below. For example, in the study conducted by Cheng, Lai & Yeung (2008), the driving forces of customer loyalty, with a focus on internet broadband service providers in Hong Kong are examined. From the study, it is found that customer satisfaction, switching cost, and price perception are antecedents that lead directly to customer loyalty, with customer satisfaction as the most material antecedents of customer loyalty. Nevertheless, it is also found that corporate image is not related to customer loyalty. Other than that, Tariq & Moussaoui (2009) had also examined about the main antecedent of customer loyalty in Moroccan banking sector. From the research, it is found that customer satisfaction, trust, corporate image and service quality were important factors affecting customer loyalty, with customer satisfaction emerging as the most important of these. Such findings are indeed quite consistent with the findings by Cheng, Lai & Yeung (2008), as it is found that customer satisfaction is the most significant antecedent of customer loyalty. In addition to that, Lee (2010) had also examined about factors influencing customer loyalty, with the focus on mobile phone service industry in Korea. From that study, it is found that service quality, perceived value, as well as customer satisfaction all are significant in affecting customer loyalty.

There are indeed many other studies that had found empirical evidences on how certain antecedents or factors are related to customer loyalty, and it is not within the scope of this to discuss them all in details. Anyway, some of the statistical significant antecedents of customer loyalty include: service quality, customer satisfaction (Chang-His, Hsiu-Chen & Gow-Liang, 2006; Polyorat & Sophonsiri, 2010), customer service (Kursunluoglu, 2011), customer relationship management practices (Haghtalab, Ahrari & Amirusefi, 2011), salespeople’s customer orientation (Homburg, Müller & Klarmann, 2011), product or service innovation (Hussain, Munir & Siddiqui, 2012), impacts from loyalty programmes (Hafeez & Muhammad, 2012), corporate image (Kaur & Soch, 2013), as well as competencies of salesperson (Delcourt, Gremler, Allard & Marcel, 2013).

From another perspective, scholars have also been interested on investigating into how customer loyalty may affect other constructs. For example, Qi, Zhou, Chen & Qu (2012) had examined about how customer loyalty is a driver of customer lifetime value, with the focus on mobile data service industry in United States. It is found that customer loyalty is indeed a significant driver of customer lifetime value. Aside from that, Helena & Sampaio (2012) had also examined about how customer loyalty affect repurchase intention as well as repurchase behaviours. From that study, it is found that customer loyalty is indeed a significant variable that influences repurchase intention as well as repurchase behaviours. From these studies, it can be seen that empirical evidences indeed support the notion that customer loyalty is important, as it will affect the various outcomes related to the performance of an organisation.

4.0 Relationships between Customer Loyalty and Brand Equity

In the previous sections, discussions have been focusing on the two variables being examined in this dissertation, namely: customer loyalty and brand equity. However, very little attentions actually focus on how these two variables are related to each other. Such issue will therefore be discussed, in this section – as to better inform about how previous studies or theories had discussed about the relationships between brand equity and customer loyalty.

4.1 Theories

In theory, brand equity should be related positively to customer loyalty – both in terms of the attitudinal and behavioural perspective of consumer loyalty (Tatiana, 2007). This is because a brand is how a firm communicate to the consumers, and that it is through a brand that a customer identify with certain products or services – based on their experiences to these products or services (Cohen, Manzanero, Posada & Lane, 2009; Torres-Moraga, Vásquez-Parraga & Zamora-González, 2008). Indeed, there are some studies being performed by scholars to further verify such theory – on the idea that brand equity should be positively related to customer loyalty. Some of these studies available will be presented accordingly below.

4.2 Empirical Evidences

First of all, Jafarnejad, Shahroudi & Mousagholizadeh (2012) had examined about how brand personality (i.e., one of the dimension of brand equity) is related to customer loyalty, with the focus on Mellat bank brand in the Tehran province. From the study, it is found that there is indeed a significant relationship between brand personality and customer loyalty. In a similar manner, Ike & Tan (2009) had also examined about the impacts of brand image (i.e., often also modelled as one of the dimension under brand equity) towards customer loyalty, with the focus on mobile phone industry in China. From the study, it is found that evidences indeed suggest that there is a significant impact from brand image on customer loyalty.

Other than that, Kiyani, Niazi, Rizvi & Khan (2012) had also examined about the impacts of brand trust upon customer loyalty, with the focus on automobile sector in Pakistan. The results indicated that the relationship between brand trust and customer loyalty is positive and significant. Besides, scholars such as Alexandris, Douka, Papadopoulos & Kaltsatou (2008) had also examined about the relationships between brand associations and loyalty. It is found that eight sub-dimensions of brand associations (namely: escape, nostalgia, pride, logo, and affect) are significantly related to loyalty.

Apart from that, Hung (2008) had also examined into the effect of brand image on customer loyalty – with the focus on insurance industry in Taiwan. The results from the study indicate that brand image positively affects customer loyalty. Yet, Aurier & Gilles Séré (2012) had however examined about relationships between perceived quality and attitudinal loyalty – with the focus on packaged goods sector. From that study, it is found that perceived brand relationship orientation has direct positive impacts on brand trust and affective commitment and, in turn, has an indirect impact on attitudinal loyalty.

So far, the studies highlighted above all concerns on how certain dimension of brand equity is related to customer loyalty. Nevertheless, there are also some studies (albeit limited) on how brand equity affects customer loyalty. These studies are directly related to the research to be conducted in this dissertation. As such, these studies will be discussed in the subsequent paragraphs as follow (so that comparison on the results eventually to be obtained in this research with the results from the other studies conducted by other schoalrs can be made).

For that, Hu (2011a) had examined about how brand equity affect customer loyalty – with the focus on retail chain stores in Taiwan. With a total of 200 individual surveys for analysis, it is found that brand equity indeed has significant and positive relationship to customer loyalty. Yet, Hu (2011b) had also examined into how brand equity is related to customer loyalty – with the study focus on consumer electronic industry. From that study, it is again found that brand equity is again a significant factor that affects customer loyalty. Later, Hu (2012) again investigate into the relationship between brand equity and customer loyalty – with the focus on shopping experience for digital cameras in Taiwan. With a total of 190 individual surveys, it is found that brand equity and customer loyalty are related, and that both of them indeed mediate the relationships between these variables: perceived risk, customer loyalty and customer involvement.

Not only is that, scholars such as Loureiro & Miranda (2011) had also examined on how the various components or dimension of brand equity may be related to customer loyalty – with the focus on internet banking sector. Based on that study, it is found that these dimensions of brand equity, namely: brand awareness, brand associations and perceived quality are related to customer loyalty.

5.0 Conceptual Framework

Overall, from a review of the literature, it can be seen that both brand equity and customer loyalty are argued to be related. Specifically, brand equity contributes to better customer loyalty. The empirical evidences available (albeit limited) also support the notion that brand equity is related positively and significantly to customer loyalty. As such, the conceptual framework to be examined within this dissertation can be illustrated as follow. The research methodology employed to investigate into this particular research aim will be further be explained in the next chapter.

Figure 4: Framework in this Dissertation

BRAND EQUITY		CUSTOMER LOYALTY
- Brand awareness - Brand image - Brand association - Perceived quality - Brand personality - Brand loyalty		- Repurchase intention - Willingness to recommend - Positive attitudes towards a brand

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