A Study on Measurement of the Brand Equity of Mobile

A Study on Measurement of the Brand Equity of Mobile
Communication Industry: Taking GOTOne as an Example
CHEN Kai 1, WANG Xiaofan2, ZHANG Yongjun3
1. School of Economics and Management, Beijing Forestry University, Beijing, 100083
2. School of Management, Beijing University of Chinese Medicine, Beijing, 100029
3. School of Software and Micro-electronics, Peking University, Beijing, 100871
[email protected]
Abstract: In this paper, we generated a pool of items based on earlier literatures, and developed a brand
equity scale for mobile communication industry through exploratory factor analysis and confirmatory
factor analysis. The scale includes 4 dimensions and 18 items, and has enough reliability and validity.
Taking a brand of China Mobile GOTOne as the example, this paper measured its brand equity in
Hainan province, analyzed the data and put forward several suggestions to improve the brand
management on the basis of a telephone survey.
Keywords: Brand Equity, Mobile Communication Industry, Measurement
1 Introduction
Brand, representing the promise of consistency of product functions, benefits and services that are
delivered from sellers to buyers, becomes one of the key factors for modern enterprises to exist and
succeed. Brand equity means the increment of marketing utility or output for a brand product compared
with a no brand product, which reflects some relations between the brand and the customers or a kind of
promise. With the increasingly fierce competition in the mobile communication service market, all the
operators lay a lot of emphases on the brand establishment, devoting substantive resources to build,
publicize and improve their brands. As a result, a number of famous communication service brands have
been formed and many customers begin to show notable preference to these brands. In order to promote
the brand management, the paper developed a scale of brand equity in mobile communication industry,
and applied it to measure the brand equity of GOTOne in Hainan province.
2 Literature Review
2.1 Brand Equity Evaluation
Brand equity evaluation is a hot issue that arose in 1990’s. Keller and lehmann (2001) classify brand
equity into three kinds. The first is “customer mind brand” equity frame from consumers’ perspective
which uses the information of consumers’ attitudes to reflect brand strength or brand equity. The second
is “product market output” from enterprises’ perspective which means the output or benefit increment
brought by brand in the merchandise market exchange activities. The third is “money market output”
from enterprises’ perspective which measures the output or benefit increment brought by brand in the
money market. Each frame of the above evaluation method has its advantages and disadvantages.
Nevertheless, the first mode is fit for our research because it can help to find out the gain and loss in the
process of brand construction on the solid theoretic basis.
2.2 Constitution of Brand Equity
From 1990, many consulting companies began to measure brand equity on the basis of continuous
investigation. But the lack of theoretical frame lead to a situation that various measure methods based on
different view-point exist at the same time and no method was predominant. Measurement from
consumers’ perspective was only one of these diverse methods.
Keller (1993) constructed a frame of “brand equity based on customers”, defining brand equity as
different responses to brand marketing aroused by customers’ brand knowledge, which composed of
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brand image and brand awareness in consumers’ memory. Keller made little advance in brand equity
measurement for the absence of measurement scale. Yoo and Donthu 2001 established a model called
Multidimensional consumer-based brand equity and find that brand equity contains three dimensions
named brand loyalty, brand acquaintance and brand association, whereas some researchers argued that
the concept of brand association is amphibolous and hard to measure. In different culture background,
the pattern of consumers’ brand acquaintance is various which lead to the diversity of brand knowledge
structure. Wang Haizhong, Yu Chunling and Zhao Ping (2005) found out that brand equity consisted of
company competence association, brand awareness, brand value acquaintance and brand resonance.
（ ）
3 Methodology
3.1 Sample
Data for this study are collected using a questionnaire of brand equity that is sent to the 500 mobile
phone users that live in Beijing, Tianjin and Jinan. In order to enhance the response rate, we choose the
mode of face-to-face survey instead of mailing and telephone survey. Finally, we get back 465
questionnaires, of which 406 are considered valid. So, the response rate is 93% and the valid response
rate is 87.31%. For the gender structure, male consumers account for 59% and female consumers
account for 41%, approximately tallying with the whole distributing.
Besides gender structure, demographic characteristics of valid samples could be described as follows:
For the age structure, most respondents are 20-35 years old, accounting for 61.5%. The average income
per month of most respondents is below RMB 4000, accounting for 72.5% and the distributing among
different segments is balanced. For the education background, most respondents have a senior high
school or university (college) education background, accounting for 79.4%. For the occupation, the
distributing shows a great diversity, including government servant, technician, businessman, clerk,
worker and college students, etc.
In order to effectively carry out exploratory factor analysis and confirm factor analysis, we divide 406
valid questionnaires into two group averagely to ensure the independence of samples.
3.2 Generating the Scale Items
A large pool of items was generated such that the items tap the domain of the construct, including 46
items, and 26 items were selected after careful considering. Then, we invited five academicians
including experts in mobile communication company to evaluate these items. Consequently, some items
were revised and others eliminated to improve item specificity, clarity of constructions, and domain
representative. A test group of consumers was asked to complete a questionnaire that included the items.
This phase resulted in the elimination of some items and modifications of some others.
The resulting scale of brand equity for mobile communication industry consisted of 21 items, which
attempt to measure five hypothesis dimensions of brand equity, namely brand awareness, brand loyalty,
brand affect, brand value acquaintance and company competence association. Responses were recorded
on a 7-point Likert scale.
4 Analysis and Results
4.1 Exploratory Factor Analysis
First, item purification was implemented to eliminate inappropriate items based on two criterion: the
coefficient of Item-total correlation and loading coefficient on variables. Second, principal components
analysis was executed to explore the dimensions of construct. Third, the dimensions were named
respectively according to the meaning of its items. At last, the reliability of the scale was test.
Briefly, after exploratory factor analysis, we deleted two items and acquired four dimensions of brand
equity, and respectively named four dimension as company competence association, brand awareness,
brand value acquaintance and brand loyalty. Table 1 shows the scale pass through the reliability test.
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Table 1. Reliability test of the scale
Cronbach α
All Fctors
0.9097
F1:Company competence association
0.8155
F2: Brand awareness
0.8290
F3: Brand value acquaintance
0.7812
F4: Brand loyalty.
0.8645
items
19
3
5
6
5
4.2 Confirmatory Factor Analysis
We used both exploratory factor analysis and confirmatory factor analysis. Once items and the
underlying structure had been tentatively selected for brand equity, all 19 items of brand equity were
subjected to confirmatory factor analysis.
Software AMOS5.0 was applied to examine the construct validity of the brand equity scale for mobile
communication services industry. One item-“I pay attention to the news about the brand” was deleted,
because its loading coefficient on the factor “Brand Awareness” was 0.363, less than 0.4, which is the
reserve criterion. Therefore, the adjusted scale includes 4 dimensions and 18 items. Table 2 shows the
result of confirmatory factor analysis of the adjusted scale.
Table 2. The examine results of confirmatory factor analysis
Loading Coefficient
Dimension
Item
Dimension
Item
(standardized)
Company
CA1
.831
Brand Awareness,
BA1
Competence
CA2
.812
BA 2
Association
CA3
.676
BA 3
Brand
BV1
.781
BA 4
Value
Brand Loyalty
BV 2
.520
BL1
Acquaintance
BV 3
.703
BL2
BV 4
.683
BL3
BV 5
.596
BL4
BV 6
.730
BL5
χ2=412.3 df=238 χ2/df=1.732 IFI=0.911 TLI=0.895 CFI=0.906 RMSEA=0.079
Loading Coefficient
(standardized)
.653
.552
.709
.701
.731
.642
.811
.697
.811
The goodness-of-fit measures for this model in table 2 show a good fit of the model to the data. It means
the brand equity scale for the mobile communication industry has enough reliability and validity.
Therefore, the scale could be used as a measure tool not only for the scholars, but also for the
practitioners. Table 3 shows the dimensions and specific items of brand equity developed in this
research.
Table 3
The Scale of Brand Equity for Mobile Communication Industry
Company Competence Association
V 1 The company which establish this brand is very competitive.
V 2 The company which establish this brand has high ability of innovation.
V 3 The company which establish this brand is aggressive.
Brand Awareness
V4 This brand is very famous.
V5 I receive advertisement of this brand frequently.
V6 The advertisement of this brand is quite impressive.
V7 I can identify the logo of this brand.
Brand Value Acquaintance
V8 The service of this brand is good value for its price.
V9 The service quality of this brand is stable and reliable.
V10 The service of this brand is convenient and comfortable.
V11 There are always new services under this brand.
V12 The service of this brand is distinctive.
V13 There are many services under this brand for me to choose.
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Brand Loyalty
V14 I will persist in using the service of this brand.
V15 I will recommend this brand to my friends.
V16 I am accustomed to use this brand.
V17 This brand is my prime choice.
V18 I like the idea that this brand delivered.
5 Application of the scale: Taking GOTOne as the example
We contacted 967 mobile phone users live in Hainan province through a telephone survey, among which
there are 574 users had consumed GOTOne service. All of participants were asked to answer the items
of the scale which refer to the GOTOne brand. So, we can get some conclusions from the score of each
dimension and the score of brand equity as a whole, and put forward some pertinence advices.
5.1 Whole Evaluation of GOTOne Brand Equity
In order to calculate the level of brand equity based on the original data, we first added the score of all
items in the scale, and then divided it by the number of items. The last point is the score of brand equity.
In essence, this method distributes more weight to those dimensions that have more items. We use 7
point Likert scale mentioned above as survey instrument. The score of GOTOne brand equity could be
seen in table 4.
Mean
Std. Deviation
Minimum
Maximum
Brand
Equity
5.77
0.9396
2
7
Table 4 GOTOne Brand Equity Evaluation
Company
Competence
Brand
Brand
Value
Association
Awareness
Acquaintance
5.94
5.44
5.74
1.0579
1.1580
1.0261
1.67
1.8
2
7
7
7
Brand
Loyalty
5.86
1.0809
1.6
7
The score of GOTOne brand equity is 5.77, which means that the evaluation of GOTOne brand equity is
on relative high level. The brand is attractive to maintain old customers and absorb latent customers,
although there are still space for it to achieve a higher level.
The scores of brand value acquaintance and brand awareness are less than that of the whole brand equity,
inferring that these two dimensions are the main restraints which need to be improved.
5.2 Better Evaluation of Brand Equity in Target Market
GOTOne brand is positioned at the consumers with the self-awareness of “Deserve Trust and
Self-fulfillment” and characteristics of lower price sensitivity, higher level demand of service quality,
and great enthusiasm for innovation. However, some customers using GOTOne service are not the target
customers indeed, whose evaluations are distinctively different. According to data analysis, we found
that target customers marked with certain occupation and age had given higher scores to GOTOne brand
equity than non-target customers.
5.3 Correlation between Brand Equity Evaluation and Income Level
Data from the survey indicate that the higher income, the lower brand equity evaluation. This finding
proves the basic assumption that different income level leads to different brand equity evaluation. In
higher income areas, people are more willing to try new services and have higher expectation for
services both in the basic function and emotional benefit. Contrarily, in lower income areas, people
prefer traditional services to new ones and attach more importance to basic function of services.
Therefore, consumers with different income will make different evaluation to the same brand service.
5.4 Suggestions
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From the conclusions above , we put forward suggestions for Hainan Mobile company to increase
GOTOne brand equity as follows: First, the exposure of GOTOne brand should be emphasized in the
process of brand publicity in order to higher the identification level and increase the brand awareness.
Second, consumers’ demographic characteristics research should be used to find the weak areas in which
GOTOne brand performed not very well, and make strategies and tactics aimed at these areas such as
younger consumer market and ladies market. At last, the level of cost performance should be improved.
For the average customers, the price and service should be more flexible, supplying various package
services and corresponding prices. For high-level customers, extra services should be provided to
increase the additional value. For example, advanced club activities should be organized for high-level
customers to satisfy their sociality demand and show their unique status.
References
[1]. Keller, K. L. Conceptualizing Measuring and Managing Customer-based Brand Equity. Journal of
Marketing, 1993, 57(1):1-22.
[2]. Keller, K. L., Donald R. Lehmann. The Brand Value Chain: Linking Strategic and Financial
Performance. Working paper, 2001, Tuck School of Business, Dartmouth College.
[3]. Park, C. S., Srinivasan, V. A Survey-Based Method for Measuring and Understanding Brand Equity
and its Extendibility. Journal of Marketing Research, 1994(5):271-288.
[4]. Wang Haizhong, Yu Chunling, Zhao Ping. The Relationship of Brand Equity Patterns between the
Consumer and the Product-market Outcomes. Management World, 2006(1):106-119.
[5]. Yoo, B., Donthu, N. Developing and Validating a Multidimensional Consumer-based Brand Equity
Scale. Journal of Business Research, 2001, 52(1):1-14.
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