MEASUREMENT OF BRAND EQUITY OF SERVICES SCALE CONSTRUCTION AND VALIDATION

Pushpender Nath Anupam Bawa

This paper describes the construction and validation of a 21 item scale for measuring brand equity in services. The procedure suggested by Churchill (1979) is followed. The scale is composed of four sub scalesbrand familiarity, perceived quality, brand loyalty, and brand association. The proposed scale is aimed at assisting brand managers in tracking the equity of the services offered by their organisations. Three types of validity are assessed - convergent validity, divergent validity and nomological validity. For constructing this scale data was collected from consumers for three services viz. banking, insurance and cellular services.

INTRODUCTION

rand equity is the capacity of a branded product or service to earn more benefits than the un-branded competitor in the same product or service category. The benefits include ability to charge price premium, competitive advantage, easy brand extension and reduction in brand management cost. The present research is aimed at construction and validation of a multi item scale to measure brand equity of services. The study derives its importance from the importance of brand equity and the lacunae in existing research on measurement of brand equity in services. Malhotra et al.(1999) wrote in their note on research directions for the twenty first century Brand management research should focus on further refinement and measurement of the brand equity construct. As researchers and practitioners strive to assess the strategic importance of brand equity, their progress might be impeded without a unified definition and thus externally valid construct. A generally accepted measure can further the overall understanding of the strategic role brand equity plays in not only extending the brand but also financially benefiting the brand. The need for this research has arisen because the limited research on brand equity of services, while laudable, contains some shortcomings with respect to measurement of brand equity. The earliest published
Journal of Services Research, Volume 11, Number 2 (October 2011 - March 2012) 2011 by Institute for International Management and Technology. All Rights Reserved.

136 Measurement of Brand Equity research on brand equity in services that was located is Berry (2000). Other work in this field has been Chernatony and Harris (2001), Kim and Kim (2004), Krishnan and Hartline (2001) and Mackay (2001a, 2001b). Some authors have ignored the major constituents of brand equity and preferred to use the minor, less significant constructs of brand equity in their scales. Many authors have not tested the validity of the scales prepared and used by them. Some authors have used single item measures. Multi item measures, like the one developed in this research effort, have an advantage over single item measures. They are able to measure the various aspects of a multi faceted construct. They also produce more reliable results. The literature on marketing of services, it is felt, will gain from research on measurement of brand equity. The scale construction framework suggested by Churchill (1979) was used viz. specifying the domain of construct, generating sample of items, purifying the measure, assessing construct validity, and developing norms. The whole process was spread over one exploratory study, two pilot studies and one final study. BRAND EQUITY DEFINED Wood (2000) contains a comprehensive account of the definitions of brand equity. Leuthesser (1998) is identified as the first one to give a significant definition of brand equity. According to Leuthesser (1998; as in Wood (2000) brand equity is, The set of associations and behaviour on the part of a brands customers, channel members, and parent corporation that permits the brand to earn greater volume or greater margins then it could without brand name. Aaker (1991) defines brand equity as A set of brand assets and liabilities linked to a brand, its name and symbol that adds to or detracts from the value provided by a product or service to a firm and / or to the firms customers. This definition implies that brand equity of a particular brand can be positive as well as negative. This is a very popular and often quoted definition of brand equity. Brand Equity in Services For long, research in marketing has focused more on goods than on services. This is true for brand equity also (Sharp, 1995).

Journal of Services Research, Volume 11, Number 2 (October 2011 - March 2012)

137 Nath, Bawa There are well established differences between goods and services (Zeithaml et al.,1985; Bitner,1990; Mackay 2001a, 2001b). These differences necessitate that measures for brand equity in services be different for those used for goods. Berry (2000) is of the view that in case of tangibles, the product represents the brand but in case of intangibles, the whole company is treated as the brand. The author proposes a brand equity model for services, in which there is a direct relationship between customer experience, brand meaning, and brand equity. But from time to time the opposite view is also heard. The minority view is that marketing of goods and services need not be different (Beaven and Scotti, 1990; Mohammad and Ahmed, 1995) and that brand equity is less important in services as compared to goods (Krishnan and Hartline, 2001). RESEARCH METHODOLOGY The three services included in the scope of the research are commercial banking, life insurance and cellular mobile services. At the outset an exploratory study was conducted to find the most important attributes that people consider while purchasing the three services. The attributes were required to calculate a multi-attribute score for the brands. This was to be used to assess divergent validity of the scale at a later stage. The exploratory study was conducted in and around Chandigarh during July-August 2004. Seventy eight usable questionnaires were obtained. Non-random sampling was used for this study. The questionnaires inquired from the respondants about aspects related to the sub scales of brand equity scale as well as the scales that were to be used for validity estimation. The geographical area for the study was Chandigarh, Delhi, and Ambala (three different cities in North India). The survey was conducted from January to March 2005. Completed questionnaires were collected from 97 different people and they could produce 226 different cases. Each brand for which a respondent gave information was treated as a separate case. As the first pilot study could not produce a good scale for brand equity it was decided to go back to the initial stage of scale construction as suggested by Churchill (1979). The second round of pilot study began with a review of additional literature especially for the scales on
Journal of Services Research, Volume 11, Number 2 (October 2011 - March 2012)

138 Measurement of Brand Equity brand familiarity, brand loyalty, and perceived quality. Judgement sampling technique was used in the second pilot study. A conscious attempt was made to obtain a heterogeneous sample. The survey for the second pilot study was conducted during October 2005 to December 2005. Seventy questionnaires were obtained from employees of various organisations located in Chandigarh, Delhi, Ambala and Gurgaon (four different cities in North India). The final study was conducted to test the brand equity scale constructed in the pilot studies. Data was collected from those employees of organisations who were at least 18 years of age or above, and understand English. Multi stage cluster sampling was used to randomly select organisations and then departments within the organisation. Data was collected from all the available employees in the selected organisation /department. Random number table was used for selections at all the stages. Data were collected during August 2006 to December 2006 at Chandigarh, Delhi, Ambala and Gurgaon. A total of 319 usable questionnaires were obtained. Acceptable values were decided for different statistics based on review of literature (Malhotra, 2004) viz. minimum 0.6 for cronbach alpha; minimum 0.5 for correlation coefficients, KMO test value, communalities, and factor loadings; and minimum 60% for cumulative sum of squared loadings. The maximum acceptable p value for t test and Bartletts test was taken as 0.05. SCALE FOR BRAND EQUITY AND ITS COMPONENTS This section contains the scale construction process for the four sub scales constituting the brand equity scale and the total brand equity scale .The four sub scales are brand familiarity, perceived quality, brand loyalty and brand association. The description of the scale construction for brand leadership is also given at the end of the section. The brand leadership scale has been constructed to help in testing the nomological validity of the brand equity scale. Scale for Brand Familiarity At the start of the first pilot study the researchers explored literature on brand familiarity and identified three items for inclusion. The items were I am familiar with the brand (Aggarwal and Rao, 1996; Mackay, 2001a, 2001b), I can quickly recall the logo / symbol of the brand (Keller, 1993; Yoo et al., 2000; Yoo and Dhontu 2001, 2002). The negatively worded version of the first item was also added viz. I am not very familiar with the brand.
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139 Nath, Bawa However, the results obtained were unsatisfactory. Only the item I am familiar with the brand was found fit for inclusion in the subsequent version of the scale. In the second pilot study the four items used were I am familiar with the brand, I have heard of the brand(Leo and Lehman ,1973) and two items recommended by Eagle (1999) viz. I have heard of the brand and I can express my opinion about the brand. The results obtained were better than those obtained earlier but they had some deficiencies. As the deficiencies were not major, it was decided not to change the scale at this stage. The brand familiarity scale finalised in the second pilot study was tested again with the help of data collected in the final study. The scale items were analysed for three services individually and collectively. Table 1: Analysis of Brand Familiarity Scale - Final Study
Scale items Cron-bach alpha if item is deleted Independent sample t test p value Items to total correlati on Factor analysis results Eigenvalues > 1 Factor loadings Communal ities Other Results

Commercial Banking (N=136; Cronbach Alpha = 0. 8490) Familiarity Knowledge Heard of Can Opinion express 0.8037 0.7717 0.8347 0.8197 0.000 0.000 0.000 0.000 0.839 0.878 0.773 0.835 0.770 0.876 0.688 0.740 0.593 0.767 0.474 0.547 No. of factors = 1 KMO test value = 0.8 Bartletts test p value = 0 Cumulative sum of squared loadings = 59.543%

Life Insurance (N=93; Cronbach Alpha = 0. 8290) Familiarity Knowledge Heard of Can express Opinion 0.7774 0.7249 0.8111 0.8153 0.000 0.000 0.000 0.000 0.818 0.888 0.788 0.757 0.763 0.917 0.656 0.635 0.582 0.842 0.430 0.403 No. of factors = 1 KMO test value = 0.765 Bartletts test p value = 0 Cumulative sum of squared loadings = 56.422%

Cellular Mobile Services (N=99; Cronbach Alpha =0. 7172) Familiarity Knowledge Heard of Can express Opinion 0.5904 0.5595 0.7530 0.7056 0.000 0.000 0.000 0.000 0.795 0.826 0.655 0.698 0.803 0.869 0.411 0.504 0.645 0.755 0.169 0.254 No. of factors = 1 KMO test value = 0.660 Bartletts test p value = 0 Cumulative extraction sum of squared loadings = 45.58%

Total Data (N=328; Cronbach Alpha =0. 8197) Familiarity Knowledge Heard of Can express Opinion 0.7561 0.7207 0.8141 0.7964 0.000 0.000 0.000 0.000 0.826 0.870 0.744 0.787 0.774 0.884 0.611 0.665 0.599 0.782 0.373 0.443 No. of factors = 1 KMO test value = 0.784 Bartletts test p value = 0 Cumulative extraction sum of squared loadings = 54.918%

As shown in Table 1 the brand familiarity scale produced good results

Journal of Services Research, Volume 11, Number 2 (October 2011 - March 2012)

140 Measurement of Brand Equity in the final study for commercial banking. The scale produced acceptable results for life insurance also with exception that communalities for two scale items were less than 0.5, and cumulative extraction sum of squared loadings was less than 60%, but the deficiency was not very large. The brand familiarity scale produced mixed results for cellular mobile services. The communality for two scale items was less than 0.5. Similarly, the factor loading for one item was less than 0.5, and the value of cumulative sum of squared loadings was less than 60%. The scale produced acceptable results in aggregate level analysis, but with minor aberrations. The communalities for two scale items were lower than 0.5, and the cumulative extraction sum of squared loadings was less than 60%. It was decided to ignore such individual aberrations because the other results of the scale remained good. Scale for Perceived Quality Three items were identified for inclusion in the perceived quality scale in the first pilot study viz. The brand provides high quality services, The brand provides reliable services, and I feel that the brand provides poor quality services. The selected items have been previously used by Yoo et al. (2000), Yoo and Dhontu (2001, and 2002). In the first pilot study the scale item poor quality proved errant . Therefore, it was decided to delete it and add some other items in the scale. In the second pilot study literature was explored to generate new items for the scale. Victor et al. (2001) was especially helpful. It was decided to follow the SERVQUAL model for additional items. But as SERVQUAL is a large scale, it was decided to use only one scale item for each factor of the model. A seven item scale was prepared. The seven items were about up to date equipments, achieve deadlines, prompt service, polite sales force, personal attention to the customer, high quality services, and reliable services. The perceived quality scale produced acceptable / nearly acceptable results in the second pilot study for the three services and aggregate version of the analysis. It was decided to use the scale for the final study. Table 2 presents a summary of analysis for perceived quality scale obtained in the final study.
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141 Nath, Bawa Table 2: Analysis of Perceived Quality Scale - Final Study
Scale items Cron-bach alpha if item is deleted Independent sample t test p value Items to total correlatio n Factor analysis results Eigenvalues > 1 Factor loadings Communa lities Other Results

Commercial Banking (N=136; Cronbach Alpha = 0.8849) Equipments Deadlines Prompt service Polite employees Personal attention High quality Reliable 0.8796 0.8773 0.8634 0.8543 0.8688 0.8637 0.8684 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.682 0.714 0.799 0.850 0.776 0.797 0.762 0.612 0.640 0.767 0.841 0.725 0.761 0.722 0.374 0.409 0.589 0.707 0.525 0.580 0.521 No. of factors = 1 KMO test value = 0.856 Bartletts test p value = 0 Cumulative sum of squared loadings = 52.92%

Life Insurance (N=93; Cronbach Alpha = 0.8456) Equipments Deadlines Prompt service Polite employees Personal attention High quality Reliable 0.8364 0.8263 0.8205 0.8275 0.8039 0.8260 0.8274 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.668 0.701 0.743 0.720 0.823 0.704 0.693 0.581 0.644 0.691 0.650 0.803 0.648 0.638 0.338 0.415 0.478 0.422 0.645 0.420 0.406 No. of factors = 1 KMO test value = 0.852 Bartletts test p value = 0 Cumulative sum of squared loadings = 44.616%

Cellular Mobile Services (N=99; Cronbach Alpha = 0.9042) Equipments Deadlines Prompt service Polite employees Personal attention High quality Reliable 0.9064 0.8880 0.8786 0.8868 0.8900 0.8858 0.8929 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.683 0.809 0.876 0.818 0.795 0.825 0.775 0.596 0.774 0.870 0.791 0.754 0.800 0.728 0.355 0.599 0.757 0.626 0.568 0.639 0.531 No. of factors = 1 KMO test value = 0.886 Bartletts test p value = 0 Cumulative sum of squared loadings = 58.211%

Total Data (N=328; Cronbach Alpha = 0.8836) Equipments Deadlines Prompt service Polite employees Personal attention High quality Reliable 0.8801 0.8710 0.8595 0.8599 0.8643 0.8632 0.8682 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.679 0.737 0.814 0.810 0.788 0.788 0.753 0.596 0.678 0.786 0.783 0.745 0.753 0.708 0.356 0.459 0.618 0.613 0.555 0.567 0.501 No. of factors = 1 KMO test value = 0.881 Bartletts test p value = 0 Cumulative extraction sum of squared loadings = 52.409%

As can be seen in Table 2 the perceived quality scale has produced good results for commercial banking , cellular mobile services and total
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142 Measurement of Brand Equity data. Only one or two communalities are less than 0.5 and the cumulative sum of squared loadings is somewhat less than 60 percent. It has given by and large acceptable results for life insurance also though the cumulative sum of squared loadings is less than 60 percent and most of the communalities are less than 0.5. But it was decided to retain all the seven items for the scale. It was decided to look at the results in totality and not focus on individual results not meeting the cut off. SCALE FOR BRAND LOYALTY A review of literature on brand loyalty was conducted in the first pilot study. The six items used in the scale were about frequent user, regular user, satisfied user, non-price loyalty, and ability to wait in case of stock out. The results obtained in the first pilot study were very discouraging. It was plagued with problems like low item to total correlation, low communalities, low factor loadings etc. Going to different and older sources of literature it was found that Jacob and Olson (1970) had done an extensive literature research and proposed a conceptual and operational definition of brand loyalty. Seven statements were framed based on their brand loyalty definition. The statements were used and tested in second pilot study. The results obtained in this round were much better than those obtained in the previous round. A few of the factor analysis results did not meet the cut offs set but it was decided to keep all the seven items for the scale. The brand loyalty scale produced in second pilot study was used and tested in final study. Table 3 presents a summarised analysis of brand loyalty scale in the three services individually and for the total data. Table 3: Analysis of Brand Loyalty Scale - Final Study
Scale items Cron-bach alpha if item is deleted Independent sample t test p value Items to total correlation Factor analysis results Eigenvalues > 1 Factor loadings Communal ities Other Results

Commercial Banking (N=136; Cronbach Alpha = 0.8495) Regular use Intend to use again First preference Satisfaction Recommendation Non switcher Non price loyalty 0.8453 0.8148 0.8122 0.8168 0.8142 0.8414 0.8444 0.037 0.000 0.000 0.000 0.000 0.000 0.002 0.592 0.795 0.806 0.785 0.797 0.667 0.672 0.582 0.928 0.614 0.483 0.483 0.516 0.589 0.605 0.674 0.671 0.353 0.926 0.643 0.581 0.599 0.475 0.474 No. of factors = 2 (a,b) KMO test value = 0.818 Bartletts test p value = 0 Cumulative sum of squared loadings = 57.860%

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143 Nath, Bawa

Scale items Cron-bach alpha if item is deleted Independent sample t test p value Items to total correlation Factor analysis results Eigenvalues > 1 Factor loadings Communal ities Other Results

Life Insurance (N=93; Cronbach Alpha = 0.8060) Regular use Intend to use again First preference Satisfaction Recommendation Non switcher Non price loyalty 0.7956 0.7717 0.7561 0.7518 0.7595 0.7850 0.8376 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.575 0.721 0.781 0.797 0.768 0.690 0.515 0.580 0.714 0.799 0.789 0.706 0.424 0.407 0.857 0.337 0.532 0.661 0.665 0.547 0.345 0.737 No. of factors = 2 (a,b) KMO test value = 0.841 Bartletts test p value = 0 Cumulative sum of squared loadings = 54.623%

Cellular Mobile Services (N=99; Cronbach Alpha = 0.7826) Regular use Intend to use again First preference Satisfaction Recommendation Non switcher Non price loyalty 0.7869 0.7533 0.7303 0.7358 0.7158 0.7301 0.8209 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.488 0.654 0.755 0.731 0.801 0.755 0.496 0.563 0.628 0.763 0.744 0.391 0.570 0.885 0.433 0.329 0.822 0.504 0.536 0.703 0.581 0.157 No. of factors = 2 (a,b) KMO test value = 0.778 Bartletts test p value = 0 Cumulative sum of squared loadings = 51.873%

Total Data (N=328; Cronbach Alpha = 0.8263) Regular use Intend to use again First preference Satisfaction Recommendation Non switcher Non price loyalty 0.8273 0.7933 0.7833 0.7865 0.7827 0.8054 0.8386 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.558 0.743 0.788 0.774 0.790 0.700 0.600 0.587 0.838 0.620 0.546 0.518 0.478 0.527 0.573 0.672 0.595 0.350 0.749 0.613 0.575 0.597 0.500 0.359 No. of factors = 2 (a,b) KMO test value = 0.843 Bartletts test p value = 0 Cumulative extraction sum of squared loadings = 53.432%

As can be seen in Table 3 the results are moderately good. For the three services and the total data, the cumulative sum of squared loadings was less than 60 percent but was above 50 percent, and the number of communalities and factor loading that were less than 0.5 range from one to three items only. However, very good results have been obtained for cronbach alpha, t test, item to total correlation. The two factors that have emerged are satisfied user (factor a), and biased purchase behaviour (factor b). Five scale items are loaded on the factor a viz. regular use, intent to use again, first preference, satisfaction, and recommendation. Two scale items are loaded on the factor b viz. non switcher, non-price loyalty.
Journal of Services Research, Volume 11, Number 2 (October 2011 - March 2012)

144 Measurement of Brand Equity It was decided to forgo the minor aberrations in the scale item non price loyalty and the seven item scale was recommended to be used for brand loyalty measurement. SCALE FOR BRAND ASSOCIATIONS Aaker (1996) suggested that brand association can be measured by measuring organisational associations and perceived differentiation. Therefore in the first pilot study, two scale-items were selected for organisational associations viz. trust the brand and admire the brand. Similarly two items were selected, for perceived differentiation, viz. brand is different from others and brand is no different from others. Results of the first pilot study showed that the negatively worded item brand is no different from others was not suitable. Once that item was removed acceptable results were achieved. It was decided to retain these three items for the second pilot study. Even in the second pilot study, the scale for brand associations performed well. The brand association developed and tested in pilot studies, was used and tested in the final study. Table 4 presents the analysis of the brand association scale in the final study for the three services and for the total data. Table 4: Analysis of Brand Association Scale - Final Study
Scale items Cron-bach alpha if item is deleted Independent sample t test p value Items to total correlati on Factor analysis results Eigenvalues > 1 Factor loadings Communal ities Other Results

Commercial Banking (N=136; Cronbach Alpha = 0.8369) Trust Unique Admire 0.7906 0.7968 0.7321 0.000 0.000 0.000 0.848 0.872 0.890 0.773 0.761 0.861 0.598 0.579 0.741 No. of factors = 1 KMO test value = 0.720 Bartletts test p value = 0 Cumulative sum of squared loadings = 63.932%

Life Insurance (N=93; Cronbach Alpha = 0.7909) Trust Unique Admire 0.7595 0.6074 0.7617 0.000 0.000 0.000 0.799 0.893 0.827 0.671 0.928 0.659 0.450 0.861 0.434 No. of factors = 1 KMO test value = 0.662 Bartletts test p value = 0 Cumulative sum of squared loadings = 58.19%

Cellular Mobile Services (N=99; Cronbach Alpha =0.7295) Trust Unique 0.7489 Admire 0.5807 0.000 0.000 0.773 0.834 0.540 0.783 0.291 0.613 0.5945 0.000 0.815 0.767 0.588 No. of factors = 1 KMO test value = 0.656 Bartletts test p value = 0 Cumulative sum of squared loadings = 49.759 %

Total Data (N=328; Cronbach Alpha =0.7959) Trust Unique Admire 0.7328 0.7391 0.6936 0.000 0.000 0.000 0.825 0.848 0.858 0.740 0.727 0.796 0.547 0.528 0.633 No. of factors = 1 KMO test value = 0.708 Bartletts test p value = 0 Cumulative sum of squared loadings = 56.967%

Journal of Services Research, Volume 11, Number 2 (October 2011 - March 2012)

145 Nath, Bawa As can be seen in Table 4 the scale performance in final study, for banking, is very good. All the results are well within acceptable limits. The scale results are acceptable for life insurance and cellular mobile services too. There is a minor problem with factor analysis in the two services. One scale item has communality less than 0.5, and the cumulative sum of squared loadings is slightly less then 60%.The scale shows acceptable results for total data. However, the cumulative sum of squared loadings is less then 60%. Overall, the scale works very well for the three services individually and collectively. Brand Equity Scale The brand equity scale was analysed in the second pilot study and the final study. Rating scores on brand familiarity scale, perceived quality scale, brand loyalty scale, and brand associations scale were added to get the brand equity score. Table 5 presents a summarised analysis of brand equity scale for total data in the second pilot study. Table 5: Analysis of Brand Equity Scale for Total Data - Second Pilot Study
Scale items (Cronbach alpha of scale = 0.9160) Cronbach alpha if item is deleted 0.915 0.915 0.915 0.916 0.914 0.910 0.911 0.913 0.913 0.910 0.908 0.911 0.912 0.909 0.908 0.907 0.913 0.916 0.911 0.918 0.908 Inde- Item to pendent total sample t correlati test p on value 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.002 0.000 0.468 0.430 0.444 0.377 0.535 0.698 0.652 0.589 0.593 0.723 0.784 0.675 0.605 0.735 0.775 0.807 0.590 0.537 0.668 0.410 0.795 0.303 0.458 0.713 0.843 0.700 0.716 0.575 0.499 0.300 0.535 0.695 0.502 0.542 0.551 0.633 0.647 0.271 0.446 0.684 0.348 Factor analysis results Eigenvalues > 1 Factor loadings* a b C 0.774 0.856 0.723 0.555 0.691 d Communaliti es 0.646 0.751 0.577 0.345 0.576 0.458 0.575 0.737 0.579 0.723 0.652 0.485 0.438 0.642 0.610 0.659 0.428 0.421 0.562 0.270 0.810 Other results

Familiarity Knowledge Heard of Opinion Equipments Deadlines Prompt service Polite employees Personal attention High quality Reliable Regular use Continuous use First preference Satisfaction Recommendation Non switcher Non-price loyalty Trust the brand Unique brand Admire the brand

No. of factors = 4 (a,b,c,d) KMO test value= 0.843 Bartletts test p value = 0 Cumulative extraction sum of squared loadings = 56.875%

Note: Total 85 cases were used for analysis. *For three variables, loadings on more than one factor have been reported. Their highest loading has been on a factor other than the factor on which other items of their sub-scale loaded. Journal of Services Research, Volume 11, Number 2 (October 2011 - March 2012)

146 Measurement of Brand Equity As shown in Table 5, the brand equity scale produced acceptable results. The value of cronbach alpha, and p values of t test were well within acceptable limits. Five scale items got less than 0.5 correlation coefficients with the scale total but all the coefficients were significant at 0.000 level of significance. Most of the factor loadings were above the minimum acceptable level. Most of the scale-items were loaded on the factors as expected. The factor a was named perceived quality, factor b was named brand loyalty, factor c was named brand familiarity, and factor d was named brand associations. However, three scale-items did have their highest loading on factors different from their expected factor. These items are equipment, regular use and trust. There were minor deficiencies in communalities and cumulative extraction of squared loadings as well. The small aberrations in factor analysis were ignored and the 21 item scale was recommended for measuring brand equity of services. It was used in the final study. Table 6 presents a summarised analysis of brand equity scale for total data in the final study. Table 6: Analysis of Brand Equity Scale for Total Data - Final Study
Scale items (Cronbach alpha = 0.9336) Cronbach alpha if item is deleted Inde- Item to pendent total sample t correlat test p ion value a Familiarity Knowledge Heard of Opinion Equipments Deadlines Prompt service Polite employees Personal attention High quality Reliable Regular use Continuous use First preference Satisfaction Recommendation Non switcher Non-price loyalty Trust the brand Unique brand Admire the brand 0.9315 0.9320 0.9326 0.9317 0.9305 0.9301 0.9298 0.9297 0.9298 0.9285 0.9293 0.9324 0.9289 0.9292 0.9282 0.9288 0.9322 0.9357 0.9292 0.9306 0.9284 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.591 0.561 0.528 0.585 0.653 0.671 0.692 0.695 0.692 0.752 0.717 0.549 0.738 0.720 0.770 0.736 0.588 0.479 0.729 0.648 0.761 0.551 0.472 0.533 0.355 0.511 0.746 0.793 0.647 0.572 0.495 0.449 0.681 0.630 0.539 0.568 0.524 0.658 0.395 Factor analysis results Eigenvalues > 1 Factor loadings* b C 0.737 0.843 0.554 0.598 d Communaliti es 0.633 0.754 0.424 0.483 0.398 0.449 0.653 0.709 0.557 0.596 0.516 0.436 0.666 0.585 0.621 0.598 0.443 0.483 0.564 0.419 0.592 Other results

No. of factors = 4 (a,b,c,d) KMO test value = 0.938 Bartletts test p value = 0 Cumulative extraction sum of squared loadings = 55.144%

Note: Total 328 cases were used for analysis. *For one variable, loading on more than one factor have been reported. Their highest loading has been on a factor other than the factor on which other items of its sub-scale loaded.

Journal of Services Research, Volume 11, Number 2 (October 2011 - March 2012)

147 Nath, Bawa As presented in Table 6, most of the item purification tests produced acceptable results for brand equity scale in the final study. The value of cronbach alpha, and p values of t test were well within the acceptable norms. The values of item to total correlation coefficient for all the items except non-price loyalty were above 0.5 and significant at 0.000 level of significance. The value for non price loyalty is only a little below the cut off. All the scale items of sub-scale perceived quality were loaded on the factor a, with minor deviation in the scale item equipments. The scale-items for brand associations loaded on the factor b along with five items of the scale on brand loyalty. All the scale items for brand familiarity were independently loaded on the factor c. Two scale items from brand loyalty factor were loaded on the factor d. Thus factor a is named as perceived quality, factor b is named as brand loyalty (a) and brand associations, factor c is named as brand familiarity, and the factor d is named as brand loyalty (b). Thus, the brand equity score for a respondent is calculated with the total of all 21 items. The analysis done so far has given acceptable results. SCALE FOR BRAND LEADERSHIP The need for this scale arose because brand leadership is one of the constructs included in the nomological net of brand equity. This scale will be used to test the validity of the brand equity scale. The scale items for brand leadership were generated from the Brand Equity Ten framework given by Aaker (1996).The four items used to measure brand leadership are viz. leading brand, innovative brand, brand is growing in popularity and a negatively worded statement on leading brand. Results of the first pilot study demonstrated that the negatively worded statement needed to be dropped. The other three items were acceptable and were used in the second pilot study. Table 7 presents a summarised analysis of the scale for the three services and the total data as obtained in the second pilot study.

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148 Measurement of Brand Equity Table 7: Analysis of Brand Leadership Scale -Second Pilot Study
Scale items Cron-bach alpha if item is deleted Independent sample t test p value Items to total correlati on Factor analysis results Eigenvalues > 1 Factor loadings Communal ities Other Results

Commercial Banking (N=33; Cronbach Alpha = 0.852) Leading brand Innovative Popularity 0.814 0.832 0.738 0.000 0.000 0.000 0.864 0.877 0.903 0.777 0.759 0.917 0.604 0.576 0.841 No. of factors = 1 KMO test value = 0.711 Bartletts test p value = 0 Cumulative sum of squared loadings = 67.376%

Life Insurance (N=20; Cronbach Alpha = 0.7472) Leading brand Innovative Popularity 0.9448 0.4612 0.3227 0.042 0.001 0.000 0.567 0.897 0.940 0.273 0.918 0.956 0.075 0.842 0.914 No. of factors = 1 KMO test value = 0.499 Bartletts test p value = 0 Cumulative sum of squared loadings = 61.010%

Cellular Mobile Services (N=32; Cronbach Alpha =0.7190) Leading brand Innovative Popularity 0.724 0.708 0.444 0.002 0.000 0.007 0.757 0.785 0.869 0.542 0.566 0.996 0.294 0.320 0.991 No. of factors = 1 KMO test value = 0.581 Bartletts test p value = 0 Cumulative sum of squared loadings = 53.509%

Total Data (N=85; Cronbach Alpha =0.8010) Leading brand Innovative Popularity 0.832 0.717 0.616 0.000 0.000 0.000 0.780 0.864 0.894 0.592 0.759 0.943 0.350 0.576 0.888 No. of factors = 1 KMO test value = 0.652 Bartletts test p value = 0 Cumulative sum of squared loadings = 60.498%

As can be seen in Table 7 the scale has performed very well for banking. The scale-item leading brand has got very low communality and low factor loading for life insurance. The performance of brand leadership scale is by and large acceptable for cellular mobile services though the value of cumulative sum of squared loadings is less then 60% and the communality of two scale-items was less then 0.5. Similarly, the scale has shown acceptable results for total data though the communality for scale-item leading brand is less than 0.5. Overall the results of the brand leadership scale are acceptable, and the scale is used for validity estimation of the brand equity scale, later in the research. VALIDITY ESTIMATION OF THE BRAND EQUITY SCALE The convergent validity, divergent validity and nomological validity of the 21 item brand equity scale was assessed.
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149 Nath, Bawa Criterion Related Validity Two types of criterion related validity was assessed for the brand equity scale viz. Convergent validity, and Divergent validity. A measure is said to possess convergent validity if independent measures of the same construct are highly correlated. Divergent validity requires that a measure does not correlate too highly with measures from which it is supposed to differ. Correlation coefficient was used to assess the different types of validity. Value of correlation coefficient was interpreted in two ways viz. absolute value of correlation, and percentage of shared variance between the variables. Franzblau (1958) has given a rule of thumb to interpret the absolute value of correlation. The author classified correlation between 0.6 to 0.8 as marked degree of correlation, and 0.8 and above as high correlation. Coefficient of determination was also used for assessing the validity calculations. The coefficient of determination indicates the proportion of shared variance between variables. Assessing Convergent Validity: Convergent validity is based on the correlation between responses obtained by maximally different methods of measuring the same construct (Peter, 1981). Correlations of brand equity score with all four components of brand equity were calculated to assess convergent validity. Similar approach has been used by other authors like Agarwal, and Rao (1996), and Mackay (2001a). Table 8 presents the correlation of sub scale totals with the total of brand equity scale, and the coefficient of determination. Table 8: Convergent Validity of Brand Equity Scale
Brand equity component Second pilot study Correlation with brand equity 0.526 0.869 0.916 0.761 Coefficient of determination 27.66% 75.51% 83.90% 57.91% Correlation with brand equity 0.703 0.906 0.918 0.842 Final study Coefficient of determination 49.42% 82.08% 84.27% 70.89%

Brand Familiarity Perceived Quality Brand Loyalty Brand Associations

The correlations were calculated in the second pilot study and in the final study. As shown in Table 8, in the second pilot study, the range of correlation was from 0.526 to 0.916 and the range of coefficient of determination was from 27.66% to 83.90%. In the final study, the
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150 Measurement of Brand Equity range of correlations is from 0.703 to 0.918 and the range of coefficient of determination is from 49.42% to 84.27%. All the correlations may be termed as either marked degree or as high degree. This was taken as sufficient evidence of convergent validity of the scale. Assessing Divergent Validity: Divergent validity is measured by demonstrating that a measure does not correlate very highly with another measure from which it should differ (Campbell, 1960). Divergent validity of the brand equity scale was assessed with the multi-attribute score calculated in the second pilot study. The broad approach followed is similar to that followed by Mackay (2001a)though in this research effort, only top three attributes have been used for calculating the multi-attribute score, whereas Mackay (2001a) had used more attributes. The attributes selected in the exploratory study were used in calculation of Multi-attributes score. The reader will recall that the respondents were asked to rate the importance of the attributes on a five points scale. Then in subsequent questions, respondents were asked to rate the existence of each attribute in each of the brands familiar to / used by the respondent. The two ratings for each attribute were multiplied. Three such multiplications were added to produce a multi attribute score for per brand per respondent. The calculation process of multi attributes score is shown below. Multi-attribute score of brand XYZ = (importance of attribute 1 existence of attribute 1 in brand XYZ) + (importance of attribute 2 existence of attribute 2 in brand XYZ) + (importance of attribute 3 existence of attribute 3 in brand XYZ) The correlation between brand equity and multi attribute score was 0.634, which indicated only 40.19% shared variance between the variables (coefficient of determination). Thus multi attributes score do not correlate too highly with brand equity. This is sufficient evidence of divergent validity of the scale. Nomological Validity It is based on investigations of constructs and measures in terms of formal hypotheses derived from theory. It refers to an observed relationship between measures purported to assess different but conceptually related constructs. The nomological validity of brand
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151 Nath, Bawa equity was assessed with market share, overall preference, and brand leadership. It was assessed in the second pilot study. The results are summarised in Table 9. Table 9: Nomological Validity of Brand Equity Scale
Variable and direction of relation with brand equity Perceived Market Share (+) Overall Brand Preference (+) Brand Leadership (+) Reference/s Chernatony and Harris (2001); Yoo et al. (2001) Aaker (1996); Pappu et al. (2005); Yoo et al. (2000) Aaker (1996) Statistic tested in current research Rank Correlation coeff = 0.923 Rank Correlation coeff = 0.965 Karl Pearson Correlation coeff = 0.760

As shown in Table 9, the relationship between brand equity and perceived market share was hypothesised to be positive (Chernatony and Harris, 2001; Yoo et al., 2000).The relationship between brand equity and overall preference of the brand was also hypothesised to be positive (Aaker, 1996; Pappu et al. 2005; Yoo et al. 2000).; and the relationship of brand equity and brand leadership was also hypothesised to be positive (Aaker, 1996) The respondents were asked to express what percentage of their total budget they intended to spend on the brand(s) responded to by them . Rank correlation was calculated between intention to purchase and brand equity. The correlation coefficient is 0.923, which indicates 85.19% shared variance between the variables (coefficient of determination). Respondent were asked to rank the brands in the order of their overall preference. The rank correlation coefficient between overall preference and brand equity is 0.965, which indicates 93.12% shared variance between the variables (coefficient of determination). Brand leadership was measured with a three-item, five points rating scale developed by the authors. The correlation between brand equity and brand leadership is 0.760 and it is significant at 0.000 level of significance. It indicates 57.76% shared variance between the variables (coefficient of determination). IMPLICATIONS OF THE RESEARCH Marketing practitioners and research scholars working in India face problems due to the paucity of marketing scales whose psychometrics have been tested in India. This research effort is a small step in filling the lacuna in indigenous marketing literature. With the help of this scale, brand managers will be able to track the equity of the services
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152 Measurement of Brand Equity offered by their organisations. As the contribution of services to the countrys GDP increases, the number of brand managers wanting to use a scale such as this, should also increase. The productivity of researchers will also increase. Marketing of services is attracting a large number of researchers. They will have a validated scale at their disposal. They need not start working from scratch on a brand equity scale or scales for its constituents. The scale is easy to administer. It can be used even in surveys using mail or Internet or face to face interviewing. Due to the large number of items and multiple points for each item, the scale gives finely graded results and is able to distinguish between various levels of brand equity. The services covered in this article, viz. banking, life insurance and cellular services are prominent services, expected to see even greater expansion. There is thus great scope for using the scale. LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH Like other researches, this research too has certain limitations. The nomological net used, did not contain variables that are expected to have a negative relationship with brand equity e.g. dislike for the brand.. Results related to developing norms; the last step of Churchill (1979) framework, has not been reported in this paper. The authors suggest replicating this research using different services and different analytical techniques like structural equation modelling and confirmatory factor analysis. The relative importance of different components of brand equity can also be ascertained. Research is also recommended to find out the effects of different marketing strategies on brand equity. REFERENCES
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Campbell, Donald T. (1960) Recommendations for APA test standards regarding construct, traint, or discriminant validity, American Psychologist, XV:8, pp. 546-553. Chernatony, Leslie De and Harris, Fiona J (2001) Measuring the Consumer-Based Equity of Financial Services Brands, October. Available at http://www.Brandchannel .com/images/ papers/Measuringequity.pdf. Cited on 20 December, 2004. Churchill, Gilbert Jr A. (1979) A Paradigm for developing better measures of marketing constructs, Journal of Marketing Research, XVI:1, pp. 64-73. Eagle, Lyne (1999) Building brands or blostering egos? A comparative review of the impact and measurement of advertising on brand equity, Working Paper Series 99.17, Department of Commerce, Messey Univeristy Acukland, New Zealand. Franzblau, Abraham N. (1958) A primer of statistics for non-statisticians, Harcourt, Brace & World, New York. Jacob, Jacoby and Olson, J.C. (1970) An attitudinal model of brand loyalty: Conceptual underpinnings and instrumentation research, Purdue Papers in Consumer Psychology, 159, pp. 14-20. Keller, Kevin Lane (1993) Conceptualizing measuring and managing customer based brand equity, Journal of Marketing, LVII:1, January,1-22. Kim, Woo Gon and Kim, Hong-Bumm (2004) Measuring customer-based restaurant brand equity, Cornell Hotel and Restaurant Administration Quarterly, 2: May, pp. 115-131. Krishnan, Balaji C. and Hartline, Michael D. (2001) Brand equity: Is it more important in services?, Journal of Service Marketing, XV:5, pp. 328-342. Leo, Bogart and Lehman, Charles (1973) What makes a brand name familiar, Journal of Marketing Research, X:1, 17-22. Mackay, Marisa Maio (2001a) Application of brand equity measures in service markets, Journal of Service Marketing, XV:5, pp. 210-221. Mackay, Marisa Maio (2001b) Evaluation of brand equity measures: Further empirical results, Journal of Product & Brand Management, X:1, pp. 38-51. Malhotra, Naresh K., Perterson, Mark and Kleiser, Susan Bardi (1999) Marketing research: A state-of-the-art review and directions for the twenty-first century, Journal of the Academy of Marketing Science, XXVII:2, pp. 160-183. Malhotra, Naresh K (2004) Marketing research An applied orientation, 4th edition, Pearson Education India. Mines O Richard Jr, Laura W Lackey & Glen H Behrend (2007) The impact of rainfall on flows and loadings at Georgias wastewater treatment plant, Water Air Soil Pollut, 179, pp. 135-157. Mohammed, Rafiq, and Ahmed, Pervaiz K (1995) Using the 7Ps as a generic marketing mix: An exploratory survey of UK and european marketing academics, Marketing Intelligence & Planning, XIII:9, pp. 4-15. Pappu, Ravi, Pascale G. Quester, and Ray W. Cooksey (2005) Consumer-based brand equity: Improving the measurement-empirical evidence, Journal of Product and Brand Management, XIV:3, pp. 143-154. Peter, Paul J. (1981) Construct validity: A review of basic issues and marketing practices, Journal of Marketing Research, XVII:May, pp. 133-145. Sharp, B. (1995) Brand equity and market-based assets of professional service firms, Journal of Professional Services Marketing, XIII:1, pp. 3-13.

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Victor Sower, JoAnn Duffy, William Kilobourne, Garald Kohers, Phyllis Jones (2001). The Dimensions of Service Quality for Hospitals: Development and use of the KQCAH Scale, Health Care Management Review, 26:2, 47-59. Washburn, Judith H and Plank, R E (2002) Measuring brand equity: An evaluation of a consumer-based brand equity scale, Journal of Marketing Theory and Practice, X:1, pp. 46-62. Wood, Lisa (2000) Brands and brand equity: Definition and management, Management Decision, IIXL:9, 662-669. Yoo, Boonghee, and Dhountu, Naveen (1997) Developing and validating a consumer-based overall brand equity scale for Americans and Koreans: An extension of Aakers and Kellers conceptualisations, presented at American Marketing Associations Summer Educators Conference, Chicago, IL. Yoo, Boonghee and Donthu, Naveen (2001) Developing and validation a multidimensional consumer-based brand equity scale, Journal of Business Research, LII:1,1-14. Yoo, Boonghee and Dhountu, Naveen (2002) Testing cross-cultural invariance of the brand equity creation process, Journal of Product & Brand Management, XI:6, pp. 380-398. Yoo, Boonghee, Donthu, Naveen and Lee, Sungho (2000) An examination of selected marketing mix elements and brand equity, Journal of Academy of Marketing Science, XXVIII:2, 195-211. Zeithaml, Valarie A., Parasuraman, A., and Loenard, Berry L. (1985) Problems and strategies in services marketing, Journal of Marketing, IL:2, pp. 33-46.

Dr. Pushpender Nath is working as Sr. Executive in Choice Modelling Group with The Nielsen Company, New Delhi, India. Dr. Anupam Bawa is Professor at University Business School, Panjab University, Chandigarh, India.

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