Sources and antecedents of brand equity for online companies

The area of Brand Equity has received considerable attention during the past twenty years. The importance of a brand emanates from the fact that brand recognition and positive associations with it create value for companies and consumers. This value is called Brand Equity and translates into monetary value. Until now, there is scant research on brand equity for online retailers to test whether theoretical frameworks developed for offline companies apply to online businesses. The study is an attempt to bridge this gap by developing and testing a comprehensive brand equity model with selected drivers (customer support and a mix of functionality and fulfilment marketing efforts) and sources (awareness, association of value and trust, and loyalty) of brand equity. Grounded in a traditional offline consumer-based brand equity framework, a research model (at the aggregate level) for assessing brand equity of online companies is developed and tested using structural equation modelling (SEM). Several key findings are reported: First, a measurement model based on dimensions of awareness, associations of value and trust, and attitudinal loyalty seem to fit the data well. Measures have adequate reliability, convergent and discriminant validity. Secondly, from the SEM application, only value association and loyalty are potent determinants of brand equity. Third, awareness, trust and value associations contribute indirectly to create brand equity. Fourth, the hierarchical hypothesized relationships between the sources of brand equity are confirmed. The final best-fitting (calibrating) model derived from the subjects that had bought from the online businesses under study was validated across a sample of subjects. Simultaneous model comparison using structural equation (by means of Chi square difference) confirms the tenability of the calibrating model. To test for the probability than an incorrect model will be rejected, power analysis was calculated. The results indicate that the likelihood of rejecting the hypothesis of exact and close fit equals 1.0. The second phase of the study involved brand analysis at the individual level. According to the calculations Amazon obtains slightly higher brand equity than eBay and puts it in first place, eBay is in second place, followed by Dell in third. CDNow is the worst performer and obtains consumer-based brand equity below average. The study offers contributions to both academia and business in several ways