STUDY OF THE RELATIONSHIP BETWEEN

BRANDAWARENESS, BRAND ASSOCIATION, PERCEIVED

QUALITY, AND BRAND LOYALTY

Shu -Hsien Liao

Dept. of Management Sciences and Decision Making, Tamkang University,
NO. 151, Yingjuan Rd, Dansui Jen, Taipei 251, Taiwan, R.O.C
michael@mail.tku.edu.tw
Retno Widowati PA
Department of Management Science Tamkang University, Taiwan.
NO. 151, Yingjuan Rd, Dansui Jen, Taipei 251, Taiwan, R.O.C
wati704@yahoo.com
Da-Chian Hu
Department of Management Science, Tamkang University Taiwan.
NO. 151, Yingjuan Rd, Dansui Jen, Taipei 251, Taiwan, R.O.C
nowhere2@mail2000.com.tw

ABSTRACT
This research investigated direct and indirect relationship between brand equity
constructs which includes brand awareness, brand association, perceived quality, and
brand loyalty. We implement Structural Equation Modelling with LISREL to examine the
hypothesis. The finding showed that there is a significant and positive direct effect
between brand awareness toward brand associations, and brand association toward
perceived quality and brand loyalty. We argue that brand association plays as a
suppressor in our model that leads to inverse relation between brand awareness and
perceived quality. With respects to the mediating effect of perceived quality to the
relationship between brand awareness towards brand loyalty and brand association
towards brand loyalty, our finding showed that perceived quality does not play as a
mediator role in this study. On the other hand, we find that brand association is a very
important variable which mediate the relationship between brand awareness toward brand
loyalty.

Keywords: Brand Equity, Brand awareness, Brand Association, Perceived Quality, Brand
Loyalty.

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 INTRODUCTION
The issue of brand equity emerge as one of the most crucial topics for marketing
management in 1990s and its concept and measurement has interested academicians and
practitioners for more than one decade. There have been three different perspectives for
considering brand equity; The customer- based perspectives, the financial perspectives
and combined perspectives. While this study focus on customer based brand equity.
In recent years, customer-based brand equity has garnered considerable
attention. Operationalization of customer based-brand equity usually fall into two groups:
consumer perception and consumer behaviour, e.g. Mahajan, Rao, and Srivastava (1991)
claimed that a customer-based brand equity could be measured by the level of consumer
perception. While Farquhar (1990) claimed that brand equity is reflected by the change
of consumer attitude while purchasing a product. Later researchers, beside using two
approach: consumer perception and consumer behaviour, some combined the two
approach and some were related brand equity to other variable as antecedents and
consequences of brand equity, e.g. Keller (1993, 2001) mentioned about brand
knowledge as combination between brand awareness and brand image, Lassar et al.
(1995) evaluate only perceptual dimensions, Blackston (1995) study about the concept of
brand meaning which include objective brand (personality characteristic, brand image)
and subjective brand (brand attitude), Dyson et al (1996) using brand loyalty and brand
attitude, Motameni and Shakroki (1998) proposed concept of global brand equity using
brand strength and Prasad and Dev (2000) using brand performance and brand awareness
to develop brand equity index. While Aaker’s (1991, 1996) incorporated the
measurement, suggested measure four dimensions of brand equity: brand awareness,
brand association perceived quality, and brand loyalty.
Considering its comprehensiveness, this study based on the concept of brand
equity by Aaker (1991, 1996) who established the four dimensions model of consumer
based brand equity which the dimensionality has been tested by some researchers: (Cobb
Walgren et al, 1995; Yoo & Donthu, 2001; Washburn and Plank, 2002; Pappu et al, 1998,
2005; Atilgan, 2005; and Kim and Kim, 2005).
Consistent with Aakers conceptualization, Cobb-Walgren et al. (1995) and Pappu
et al (2005) found four dimensions of brand equity, while contrasted with findings of Yoo
and Donthu (2001,2002) and Washburn and Plank (2002) that also based on Aaker’s
conceptualization, but observed only three brand equity dimensions.
While previous studies tested and found associative relationship among the
dimensions of brand equity, beside testing the dimensionality, this present research tested
the direct and indirect causal relationship among comprehensive dimensions of brand
equity which included brand awareness, brand association, perceived quality and brand
loyalty. By doing so, we also could find which dimensions has influenced brand loyalty.
In addition, although numerous local or global different product categories have been
employed to measure the brand equity, literature on brand equity within the hospitality
industry still relatively limited (e.g. Kim and Kim (2005) using luxury hotel and chain
restaurant; Atilgan (2005) using beverage industry; even Pappu et al. (2005) using car
brands and television brands
This research would provide manager and researcher a conceptual framework to describe
the relationships between the brand equity constructs and a more thorough understanding
of consumer behaviour that implies for marketing strategist for making better strategic

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decision about target market definition and product as well as better tactical decisions
about specific marketing-mix actions.

LITERATURE REVIEW

Brand Equity

The issue of brand equity has emerged as one of the most crucial topics for marketing
management since 1990s( Leuthesser,1988; Keller,1993; Cobb-Walgren, Ruble, &
Dontu, 1995: Lassar, Mittal & Sharma, 1995; Aaker, 1996; Dyson, Farr, and Hollis,
1996; Faircloth et al. 2001, Esch et al, 2006; Ramos & Franco et al. 2005.
Brand equity has been considered in many context: the value added to the product (Jones,
1986; Lethesser 1988; Farquhar, 1990; Aaker,1991,1996,1999; Keller, 1993,1998, 1999;
Kapferer, 1997); value of the firm (Aaker, 1991; Kim & Kim, 2005); value of the
customer(Aaker1991; Martensen & Gronholt, 2003); brand preference, purchase
intention (Lattin, 1987; Zeithaml 1988; Hardie et al 1993; Cobb-Wagren 1995); brand
loyalty, brand awareness perceived quality, brand associations (Aaker, 1991; Keller,1993;
Gralpois 1998, Pappu et al, 2005; Atilgan et al, 2005); differential effect of brand
knowledge of consumer response to the marketing of brand (Keller,1993); incremental
utility (Simon & Sullivan, 1993); consequence of marketing efforts (Ramos & Franco,
2005).
There have been three different perspectives for considering brand equity; The customer-
based perspectives, the financial perspectives and combined perspectives. While this
study focus on the customer based perspectives.

Customer- Based Brand Equity.

The advantage of conceptualizing brand equity from the Customer- based
perspective is that it enables managers to consider specifically how their marketing
programs improves the value of their brands in the minds of consumers.
Within the marketing literature, operationalization of customer based-brand
equity usually fall into two groups (Cobb-Walgren et al. (1995); Yoo & Donthu (2001)):
consumer perception (brand awareness, brand associations, perceived quality ) and
consumer behaviour (brand loyalty, willingness to pay a high price).
Mahajan, Rao, and Srivastava (1991) claimed that a customer-based brand
equity could be measured by the level of customer’s perception. Also operationalized by
Lassar et al. (1995) as an enhancement of the perceived utility and desirability that a
brand name confers on a product. According to them, costumer- based brand equity
indicates only perceptual dimensions, not including behavioral or attitudinal such as
loyalty or usage intention, which differs from Aaker’s (1991) who suggested to measure
brand equity including behavioural and attitudinal dimensions. Farquhar (1990)
maintained that brand equity is reflected by the change of consumer attitude while
purchasing a product. Aaker (1991) incorporated definitions, the four dimensions of
brand equity namely brand awareness, brand association perceived quality, and brand
loyalty.
Customer- Based Brand Equity is defined as “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’s consumers ( Aaker,1991)”.

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 On the other hand, some researcher related the customer based brand equity with
other construct, e.g. Farquhar and Ijiri (1991) proposed a model by judging the
corporation’s marketing efforts on its brand directly. While Lassar et al (1995) focused
on relationship between customer based and financial/ market based brand equity
measurement. Customer-based brand equity in this respect, is the driving force for
incremental financial gains to the firm.

Table 1. Main different concepts:

Main Concept
contributor
Mahajan Rao Measure customer based brand equity by the level of customer’s
(1991) perception
Farquhar -Brand equity is reflected by the change of consumer
(1990) attitude while purchasing a product.

Aaker ( 1991) Measuring the four dimensions of brand equity: brand awareness,
brand association perceived quality, and brand loyalty.
Keller (1993) Adopted two basic approaches ( direct and indirect ) to measure
customer- based brand equity emphasizing two constructs: brand
awareness and brand image. The indirect approach to identify
potential sources of costumer- based brand equities The direct
approach focuses on consumer response to different elements of
firm’s marketing program.
Farquhar & Judging the corporation’s marketing efforts on its brand directly.
Ijiri
(1991)
Lassar et al, Relationship between customer based and financial/ market based
1995 brand equity measurement. Customer-based brand equity in this
respect, is the driving force for incremental financial gains to the
firm.

Hypothesis

Relationships between Brand Awareness and Brand Associations.

Aaker (1991,1996) argued that brand equity is a multidimensional construct,
which consists of brand loyalty,
Customer based brand awareness, perceived quality, brand loyalty and brand
awareness and brand associations. brand equity occurs when the consumer has a high
level of awareness and familiarity with the brand and holds some strong, favourable, and
unique brand association memory.
Fiske and Taylor (1995) contended that brand associations could be recalled in
customer’s mind as emotional impressions. Brand awareness influences consumer
decisions making by affecting the strength of the brand associations in their mind.
(Keller,1993,1997). Pitta and Katsanis ( 1995) also pointed out that there are several
dimensions of brand awareness with brand associations . They further indicated that

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brand associations of the product can be stored in consumer’s minds after brand
awareness of the product are already in their memory.
Brand awareness and brand associations were found to be correlated (Atilgan et
al 2005; and Pappu et al 2005). Moreover, high levels of brand awareness positively
affect the formation of the product’s brand image ( association) (Ramos and
Franco,2005). Esch et al ( 2006) also found that brand awareness affects brand image
( association). These literature review leads to hypotheses H1

H1: Brand Awareness has a positive direct effect to Brand Associations.

The Relationship between Brand Awareness, Brand Association and Brand Loyalty

Yoo, Donthu and Lee, (2000) researched about brand awareness with brand
associations and brand equity. These researchers indicated that brand awareness with
brand association has a significant positive effect on brand equity.
While brand loyalty can be defined as combination of elements including the
degree of customer satisfaction and the positive of brand associations. Thus it can be seen
that if customers had higher brand associations and brand awareness, brand loyalty would
increase. Similarly in Atilgan’s (2005) study, the more favourable associations consumers
have towards a brand, the more their loyalty and vice versa.
These literature review leads to hypotheses H2, H3
H2: Brand Awareness has a positive direct effect to Brand loyalty
H3 : Brand Association has a positive direct effect to Brand Loyalty

The Relationship between brand awareness, brand association and perceived quality.

As studied by Aaker (1991), Keller (1993) and Pappu et al (2005), consumer who
hold favourable associations towards a brand are also likely to develop favourable
perceptions of quality and vice versa. Brand awareness in their study has been defined as
consumer’s ability to recall that a brand is a member of product category. Consumers
brand awareness is likely to be high when they have strong associations for the brand and
when they perceived the quality of the brand to be high and vice a versa.
These literature review leads to hypotheses H4 and H5:
H4: Brand Awareness has a positive direct effect to Perceived Quality.
H5: Brand Associations has a positive direct effect to Perceived Quality.

The Relationship between Perceived Quality and Brand Loyalty.

For several studies found that brand loyalty is related perceived quality ( Mc
Connel,1968, Shapiro,1970 Szybiloo and Jacoby,1974) as reviewed by Lau and Lee
(1999).
Atilgan et al. (2005) studied the relationship between the dimensions of brand
equity and brand equity itself. They concluded that brand loyalty is the most influence
dimension of brand equity. Even their study did not give enough support to the existence
of a direct causal relationship between the three dimensions brand awareness, brand
association, and perceived quality and brand equity However, observed pair-wise

5
comparison suggested that there is a correlation between brand loyalty, brand
awareness, and perceived quality. As a result they suggested that concentrating brand
loyalty, should not undervalue the effect of brand awareness and perceived quality to
brand loyalty.
As Pappu et al’s study (2005) is envisaged that consumer’s perception of
quality will be associated with their brand loyalty. The more brand loyal a consumer is,
the more he or she is likely to perceived the brand as offering superior quality and vice a
versa.
These literature review leads to hypotheses H6
H6 : Perceived Quality has a positive direct effect to Brand Loyalty

The Mediating Effect of Perceived Quality

Brand awareness has been define as consumer’s ability to recall that a brand is a
member of product category (Aaker, 1991). Consumers brand awareness is likely to be
high when they have strong associations for the brand and when they perceived the
quality of the brand to be high and vice a versa. Similarly, consumers’ perception of
quality of a brand is likely to be high when they have strong association with the brand
and vice versa Pappu et al. (2005). According to Aaker (1991) while brand awareness
builds the familiarity liking sight and is a signal of substance/commitment, perceived
quality acts as a differentiation tools.
These literature review leads to hypotheses H7, H8
H7 : Perceive Quality is mediating the relationship between Brand Awareness and
Brand Equity.
H8: Perceived Quality is mediating the relationship between Brand Association and
Brand loyalty.

The Mediating Effect of Brand Association.

Brand awareness influences consumer decisions making by affecting the strength

of the brand associations in their mind.(Keller,1993,1997). Pitta and Katsanis (1995) also
indicated that brand associations of the product can be stored in consumer’s minds after
brand awareness of the product are already in their memory. Later Atilgan et al; and
Pappu et al (2005) found that brand awareness and brand associations were correlated.
These literature review leads to hypotheses H9
H9: Brand Association is mediating the relationship between Brand Awareness and
Brand Loyalty.

Research Map
To illustrate the relationship between brand equity dimensions and the relationships with
another construct based on literature review, we present a research map shown in Figure
2.

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 Marketing
Efforts Yoo et al (2005 )
Yoo et al , (2000 ) Atilgan et al (2004 )
Yoo at al (2000 )
Price deals Brand Equity
Yoo et al (2000 )
Aaker ,1991
Store image Bauldauf et al (2003 )
Pappu et al (2005 )
Ramos &Franco (2005 )
Distribution Ramos &Franco (2005 ) Proposed Hypotheses Pappu et al (2005 )
intensity Gralpois 1998 Value of
the firm
Advertising Ramos & Franco (2005 )
Aaker 1991
Pappu et al ( 2005 ) Aaker ( 1991 )
Spending Brand Keller 1993
Faircloth et al 2001 Kim and Kim (2005 )
Atilgan Awareness Aaker (1991 )
Aaker (1991 )
Keller (1993 ) Yoo et al (2000 )
Keller (1993 )
Value of the
Pappu et al (2005 )
Yoo at a l (2000 ) Martensen & Gronholdt customer
2003
Pappu et al (2005 ) Keller (1993 ,1995 ) Aaker (1991 )
Pitta and Katsanis (1995 ) Proposed Hypotheses Pappu et al 2005 Chaudori 1999
Dyson et al (1996 )
Pappu et al (2005 ) Aaker (1991 )
Keller (1993 ) Perceived Proposed Hypothesis Aaker ,1991
Franz Rudol Each et al (2005 )
Mc Connel ,1968 ) Brand Loyalty Keller 1993 Brand
Ramos & Franco (2005 )
Ramos & Franco (2005 ) Quality Shapiro , (1970 )
Atilgan et al (2005 )
Yoo, et al 2000
Szyybiloo and Jacoby ,(1974 ) Yoo et al (2000 )
Faircloth et al 2001 attitude
Aaker (1991 )
Potential Proposed Hypothesis
Aaker (1991 ) Pappu ( 2005 ) Cobb -Walgren (1995 )
Drivers Keller (1993 )
Cobb -Wagren
et al (1995 )
Consumer Drivers Pappu (2005 ) Tsoukatsos & Rand
(2006 ) Zeithaml , (1988 ) Brand
Risk Aversion
Variety seeking Proposed Hypothesis
Bauldauf et al (2003 ) Martensen & Gronholts
Lattin 1987 Preference
Pappu et al (2005 ) Hardie et al 1993
2003
Aaker 1991 ;Keller 1993 , Farquhar ( 1990 )
Brand Drivers Faircloth et al (2001 ) Faircloth et al 2001 . Gounaris &Stathakopoulus
Brand (2004 )
Brand Reputation
Association Pappu et al (2005 ) Purchase
Availability of Intention
Substitute Brand Tsoukatos & Rand
Franz Rudolf et al (2006 ) (2006 )
Gounaris & Stathakopolous Atilgan et al (2005 )
(2004 ) ProposedHypothesis Word of
Social Drivers
Mouth
Gralpois 1998 Comunication
Social group -
influence
Peers
recommendation
Faircloth et al (2001 )
Affect
Brand
Inter -relation Satisfaction Maxham & Netmeyer (2002 )
Franz Rudolf et al (2006 )

Main construct
:

FIGURE 1. Research map

METHOD.

This research examined the relationship among the four most important
dimensional constructs of brand equity which is includes brand awareness, brand
associations, perceived quality and brand loyalty

Research Framework

Based on literature review and research hypotheses as illustrated in the last chapter, this
study develop the conceptual framework of this research as shown in Figure 3

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 Model
Brand H2
Awareness
H4
H7

H1 Perceived H6
Model BrandLoyalty
Quality

H5 H8

Brand H3
Association

H9

FIGURE 2: The Research Framework

The proposed research framework present the relationship between four construct of
customer based brand equity namely Brand awareness, brand association, perceived
quality and brand loyalty.

Measures
Measures of brand equity consist of the four construct of customer based brand
equity. This study employed a five point Likert scale anchored from 1 (strongly
disagreed) to 5 (strongly agreed) which were adopted from Atilgan (2005) and Kim and
Kim (2005).

Brand awareness.
Sample responded to four items designed to assess their ability to recognize and recall the
brand as a member of a certain project category. The items from Atilgan’s questionnaires
( Atilgan et al, 2005) which including “I am aware of this restaurant” (BAW1), “ I can
recognize this restaurant among other restaurants”(BAW2), “I know what this restaurant
looks like”( BAW3), “Some characteristic of Mc Donald come to my mind
quickly”(BAW4).

Brand Associations
Fourteen items by Kim and Kim ( 2005) were adopted to measure anything linked in
memory to the brand: “It is crowded” (BA1), “It is noisy” (BA2), “The price is
reasonable” (BA3), “Service is prompt” (BA4). ‘It is conveniently located” (BA5), “It
has a differentiated image from other restaurant brands”( BA6). “ It tastes good compare
with price” (BA7), ”Employees are very kind( BA8), “It has a very clean image”( BA9),
“It has cheerful and enchanting atmosphere” (BA10), “There are many event” (BA11) I
feel comfortable to visit alone” (BA12), “It has a long history”( BA13), “Its brand is
familiar to me”( BA14).

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Perceived Quality

Ten items by Kim and Kim ( 2005) were adopted to measure customer perception of
overall quality or superiority of a product or service with respect to its intended purpose
relative to alternatives including, “The physical facilities (e.g building, sign, room décor,
illumination) are visually appealing”(PQ1), “The restaurant staff gives customers
individual attention”(PQ2), “The appearance of staff members are clean, neat,
appropriately dressed” (PQ3), “The restaurant has operating hours convenient to all their
customers” ( PQ4), “The staff provides prompt service at promised times” (PQ5). “ The
staff handles customers’ complaints effectively”(PQ6). “The staff is always willing to
customers”(PQ7), “ The knowledge and confidence of the staff are good”(PQ8), “The
food quality of the restaurant is good”(PQ9), and “The restaurant insists on error-free
service”( PQ10).

Brand Loyalty

Five items by Kim and Kim (2005) were adopted to measure the attachment that
customer has to a brand including :“ I regularly visit this restaurant”( BL1), “I intend to
visit this restaurant again”( BL2), “I usually use this restaurant as my first choice
compared to other restaurants”(BL3), “I am satisfied with the visit to this
restaurant”(BL4), “I would recommend this restaurant to others” (BL5), and “I would not
switch to another restaurant for the next time”( BL6).

Pilot study and pre-test of questionnaires.

We prepared questionnaires adopt from Kim and Kim ( 2005) and Atilgan et al (2005)
which also based on Aaker’s model and translated from English into Chinese, then
reviewed and revised by a Professor and 4 PhD candidates. We complete a questionnaires
contained 34 items/ statement.
The data in this pre-test study were collected through self-administered questionnaires in
Taipei, Taiwan, distributed to 82 respondents of teenagers customers in the spot location
of Mc Donald’s restaurant.
From the result of pre-test for the statistic evidence reasons we excluded 6 statements/
items, 5 items from brand associations questionnaires and 1 statement/ item from brand
loyalty because their factor loading is too low (<0.4) and item to total correlation of 5
brand association items is too low (<.05) and item to total correlation of brand loyalty
item is too high (>1). Finally we get 28 statements/ items contain four dimensions
measurement.

Sample and Procedures

After pre-test and modification of questionnaires, questionnaires were

distributed in the spot location of Mc Donald’s restaurant. We chose Mc Donald’s fast
food restaurant ( quick service restaurant/ QSR) as our object of research because it is
one of the good example of company brand, well-known and the largest global brand of

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chain restaurant but implement local adaptation. Compare to the closest competitors,
got sales 2.6 $ billion or occupied 45% of market share in 2006. We chose Taiwan
sample, because Taiwan as other place in Asia become more important market that
there are many growth opportunities internationally. The chain had posted an average
of 20 percent growth in single-store sales over the past three years, making Taiwan one
of the top 20 markets internationally for McDonald's expansion.

Even Mc Donald’s targeting a diverse market ranging from children to elderly

people, but we chose segment of teenagers as our research target, because Mc Donald’s
is a global phenomenon so are the teenagers. The teenager identity became inextricably
linked to leisure and hedonic consumption. In this study we selected teenager’s
consumers in the age between 13 -19 years old. We targeted the frequent consumer of
Mc Donald’s restaurant who is at least come to the Mc Donald’s restaurant 4 times a
month or once a week (Kara et al, 1997) other than less frequent consumers

To proceed the formal data collection, we first explain the purpose of this study
and show respondents how to fill in the questionnaires. If respondents have problems in
filling in the questionnaires, they can directly ask us . It takes ten to fifteen minutes to
complete the formal questionnaires.

Survey questionnaires were hand distributed to 427 respondents, and retrieved

with the aid of undergraduate and graduate university students.
A total of 418 usable questionnaires or 98.82 percent response rate. From the retrieved
questionnaires we separate into the frequent and less frequent consumers data. We
conducted our analysis on 213 valid data of frequent consumers.

Before the process of quantitative data analysis began, we employed human efforts in
dealing with retrieved questionnaires, using SPSS 13.00 for Windows to analyse the
data of questionnaires. Incomplete questionnaires were regarded as invalid. We enlisted
the code for the retrieved questionnaires and entered them into the table

From the demographic questions we got the data as follows:

The sample of 213 consumers consisted of 50.2 % male, and 28.2 % were junior
high school and 50.7% were high school students. Their age range from 13 to 19 years
old: 13 years old : 7.5%, 14 years old : 8.5%, 15 years old; 12.2%, 16 years old: 18.3 %,
17 years old: 20.7%, 18 years old: 15%, 19 years old: 17.4%. Their frequency to visit the
restaurant; 4-5 times a month: 66.7%, 6-7 times a month: 13.1%, more than 8 times a
month: 19.3 %.Of the samples, 50.7% have income (pocket money) less than NT 3000
dollars monthly, and 30% have NT 3000 - NT 5000 dollars monthly. The purpose to visit
the restaurant of the sample 32.4% are just to eat ,21.6% to study , 31.0%, to chat. The
sample’s reason to visit Mc Donald’s restaurant because of: Clean: 28.2%, The climate:
20.7%,Quality of food: 19.2%, Quality of service: 7.5%, Fashion: 8%, Others: 16.4%.
Their preference of taste are : no prefer : 40.4%, salty: 27.7%, sweet: 14.1 % sour: 13%,
spicy: 11.7%. They stated that advertising not influenced them: 64.8%, influenced them:
35.2%. They are not influenced by new product 76.5%, influenced by new product
23.5%. The respondent also visit other fast food restaurant: KFC: 70.9%, Pizza Hut :

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12.2%, Burger King : 6.1%, Other : 10.8%. While they visit location of Mc Donald’s
around: shopping center: 43.2%, school: 25.8%, tourist places: 17.4%, office: 13.6%

ANALYSIS AND RESULT

Testing of Measurement model

We performed confirmatory factor analysis on the four variables: Brand
awareness, Brand association, Perceived Quality, and Brand Loyalty. We tried to asses
overall fit of the model.
First we find that the overall fit is not very good. Then we exclude 11 items ( BL3, BL5,
PQ1, PQ2, PQ4, PQ9, BA1, BA2 BA8, BA9, BAW4) which has the modification index
is too high (>0.5) and standard solution is too low (< 0.4), then we find a better overall
fit. The measurement model provided an acceptable fit to the data when considering fit
statistics. GFI 0.91; SRMR 0.063; RMSEA 0.053; NNFI 0.97; CFI 0.98; χ 2 179.90 DF;
113; χ 2/ DF 1.592

Reliability Analysis
Cronbach’s α coefficient and item to total correlations are both used to measure
the internal consistency of each identified construct. The reliability of the construct is
acceptable if Cronbach’s α exceeds 0.70 and item-to-total correlations have greater than
0.50 ( Hair, Anderson, Tatham & Black, 1998)
Chronbach’s α coefficient, item-to-total correlations, mean and standard
deviation are listed in Table 2 which shows that this research has achieved the high
reliability (Cronbach’s α coefficient all above 0. 74 and item-to total correlations most
around 0.50 ).
In term of the quality measurement model for the full sample, the constructs
display satisfactory levels of reliability, as indicated by composite reliability ranging
from 0.66 to 0.83.
The value of skewness shows that less than 2 and kurtosis less than 7 it means
that the data is normal, meeting the normality assumption ( Curran et al, 1996)

11
TABLE 2. Reliability
Variab/ Cron Std. Items to Composite
items bach’ Deviati Kurto totalcorrel reliability
alpha Mean on Skewness sis ation
BL .745 3.770 .56655 .011 -.246 0.6649
BL1 3.73 .847 .404 -.668 .440
BL2 4.03 .729 1.058 -.640 .573
BL3 3.66 .901 -.497 -.245 .462
BL4 3.68 .741 198 -1.84 .572
BL5 3.75 .794 -.086 -2.07 .525

PQ .861 3.578 .56775 .093 1.7 0.8260

PQ1 3.67 .893 -.226 -.297- .502
PQ2 3.29 .900 -.127 -.157 .568
PQ3 3.85 .796 -.694 1.237 .570
PQ4 4.00 .906 -.884 -.694 .453
PQ5 3.72 .855 -.747 1.075 .662
PQ6 3.34 .906 -.003 .171 .625
PQ7 3.62 .802 -.076 .112 .654
PQ8 3.39 .809 -.224 .024 .633
PQ9 3.65 .790 -.255 -.016 .583
PQ10 3.25 .842 .065 -.224 .482

.801 3.7522 .51258 .087 .31 0.7351

BA
BA1 3.74 .888 -.762 .648 .519
BA2 3.85 .837 -.792 1.045 .432
BA3 3.49 .833 .092 -.301 .535
BA4 3.71 .765 -.346 .585 .620
BA5 3.82 .758 -.533 .960 .487
BA6 3.85 .726 -.127 -.352 .514
BA7 3.68 .953 -.663 .454 .496
BA8 3.77 .813 -.287 -.089 .398
BA9 3.87 .834 -.250 -.627 .447

BAW .801 4.0516 .61691 -.288 -.404 0.7694

BAW1 4.37 .751 -1.190 1.709 .572
BAW2 4.37 .745 -.861 .182 .638
BAW3 3.69 .858 .066 .591 .507
BAW4 3.78 .874 -.163 -.366 .533
Note : BL: Brand Loyalty, PQ : Perceived Quality, BA: Brand Association, BAW: Brand
Awareness.

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Validity Analysis

(1). Content Validity

Content Validity means whether the content of questionnaire reflects the subjects of
the study or not. It also checks whether the measurement selected by the researchers can
measure the topic correctly. Because of being constructed based upon previous research,
the questionnaire in the formal study shows content validity.

(2). Convergent Validity.

As shown at table 3, all of the estimated parameters were statistically significant (p < .05)
the T- value of all questions are between 6.13- 12.00 indicate excellent validity. It means
that all the measurement model in our study has convergent validity.

TABLE 3. Convergent Validity

Factor Standard Standardized
Variable Parameter T-value
loading error solution
λ1 0.45 0.06 7.02*** 0.53
Brand
λ2 0.51 0.05 9.62*** .0.70
loyalty
λ3 0.49 0.05 9.01*** 0.66

λ4 0.45 0.05 8.36*** 0.56

λ5 0.60 0.05 11.01*** 0.70
Perceived λ6 0.66 0.06 11.57*** 0.73
quality λ7 0.62 0.05 12.51*** 0.77
λ8 0.56 0.05 10.91*** 0.69
λ9 0.44 0.06 7.64*** 0.52

λ 10 0.46 0.06 8.14*** 0.55

λ 11 0.56 0.05 11.53*** 0.73
Brand
λ 12 0.44 0.05 8.69*** 0.58
Associations
λ 13 0.43 0.05 8.78*** 0.59
λ 14 0.51 0.07 7.79*** 0.53

λ 15 0.59 0.05 12.00*** 0.79

Brand λ 16 0.68 0.05 14.00*** 0.91
Awareness λ 17 0.37 0.06 6.13*** 0.43

∣T ∣≧1.96，at p0.05 level*；∣ T≧2.58，at p 0.01 level**；and ∣ T∣≧3.29，at

p 0.001 level ***。

(3). Discriminant validity

To assess discriminate validity, we tested a series of Chi- square (χ 2) difference
tests on the factor correlations among all the constructs (Anderson and Gerbing, 1998).
This was done for one pair of variables at a time by constraining the estimated correlation

13
parameter between them to 1.0 and then performing a Chi- square χ 2 difference test on
the values obtained for the constrained and unconstrained models (Anderson and
Gerbing, 1998). The resulting significant difference in χ 2 indicates that the two
constructs are not perfectly correlated and that discriminate validity is achieved (Bagozzi
and Phillips, 1982). Based on Table. 4 all of the χ 2 difference in this study is greater than
3.84, which this is a good evidence for the dimensions’ discriminate validity.

TABLE 4.Discriminant Validity

Variable Model χ2 DF Δχ2 Δdf
Unconstrained model 179.90 113
BL- PQ 239.21 114 59.31 1
BL-BA 203.23 114 23.33 1
BL-BAW 244.01 114 64.11 1
PQ- BA 195.52 114 15.62 1
PQ-BAW 333.75 114 153.85 1
BA-BAW 320.93 114 141.03 1
.

Correlation analysis
Means, standard deviations, and inter-correlations for the study variables are
reported in Table 5. Correlations reflecting the relationship between research variables
predicted by the hypotheses were positive significant.

TABLE 5. Descriptive statistics and correlations matrix of construct

Variable Mean SD BL PQ BA BAW

BL 3.7700 .56655 1
PQ 3.5789 .56775 .474(**) 1
BA 3.7522 .51258 .546(**) .725(**) 1
BAW 4.0516 .61691 .388(**) .344(**) .533(**) 1

** Correlation is significant at the 0.01 level (2-tailed).

Correlation can only reveal the degree of relationship between construct. To analyse the
direct and indirect effect, as well as mediating effect among the construct, we applied
structural equation modelling.

The Structural Model

After testing the measurement model, we proceeded to examined the proposed
structured model and the hypotheses.
The main purpose of this study is to analyze the causal relationships, including the
mediating effect between brand awareness, brand associations, perceived quality and
brand loyalty. From the structural model we got the result as follows:

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TABLE 6. Direct Effect.
Path Parameter Standard T- Standard Hypotheses Result
estimate error value solution
BAW->BL γ 11 0.14 0.14 0.97 0.14 Positive Not supported

BAW-> PQ γ 21 -0.19 0.08 -2.25 -0.19 Positive Not supported

BAW->BA γ 31 0.51 0.10 5.25 0.51 Positive Supported
BA->BL β12 1.02 0.47 2.17 1.02 Positive Supported
PQ-> BL β13 -0.45 0.39 -1.15 -0.45 Positive Not supported
BA -> PQ β23 0.98 0.17 5.73 0.98 Positive Supported

The Direct Relationship

Table 6 shows the path coefficient from brand awareness ( BAW) to brand loyalty (BL) is
positive but not significant: ( γ 11 = 0.14, T-value 0.97 p> 0.05) this not support the
hypotheses ( H2) that brand awareness has a positive direct effect to brand loyalty. The
path coefficient from Brand awareness ( BAW) to Perceived Quality (PQ) is significant
even inverse: ( γ 21= -0.19, T-value -2.25 p< 0.05) this not support the hypotheses (H4)
that brand awareness has a positive direct effect to perceived quality. We argue that
brand association plays as a suppressor in our model that leads to inverse relation
between brand awareness and perceived quality.
The path coefficient from Brand awareness (BAW) and Brand Association (BA) is
significant( γ 31= 0.51 T- value 5.25 p < 0.05), thus the hypotheses that brand awareness
has a positive direct effect to brand association (H1) is supported. The path coefficient
from Brand Associations ( BA) to Brand Loyalty ( BL) is significant( β12= 1.02, T-
value 2.17 p< 0.05) thus the hypothesis that Brand association has a positive direct effect
to brand loyalty (H3) is supported. The path coefficient from Perceived Quality (PQ) to
Brand loyalty (BL) is not significant even inverse ( β13= -0.45, T-value -1.15 p>0.05)
this not supported the hypothesis (H6) that Perceived quality has a positive direct effect
to Brand loyalty. The path coefficient from Brand Association (BA) to Perceived Quality
( PQ) is significant ( β23=0.98, T- value 5.73 p< 0.05) thus the hypothesis that Brand
Associations has a positive direct effect to Perceived Quality (H5) is supported.

TABLE 7. The Total and Indirect Effect

Endogenous

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 Brand Associations Perceived Quality Brand Loyalty
Effect T value Effect T value Effect T value
B. Awareness
Direct .51*** 5.25*** -.19 -2.25* .14 0.97
Exogenous
Indirect -- -- .50*** 4.63*** .38*** 2.76**
Total .51*** 5.25*** .31*** 3.65*** .52*** 4.84***
B. Associations
Direct .98*** 5.73*** .58 *** 4.15***
Endogenous
Indirect -- -- -- --
Total .98*** 5.73*** .58 *** 4.15***
P. Quality
Direct -.45 -1.15
Endogenous
Indirect -- --
Total -.45 -1.15
∣T ∣≧1.96 ，*p 0.05 level ； ∣ T≧2.58 ，at **p 0.01 level；and ∣ T∣≧3.29 ，at ***p
0.001 level。

Indirect relationships ( Mediating Effect)

Table 7 shows the existence of mediating effect on the structural model.

Fully mediation ( only indirect effect) is found in the relationship between Brand
awareness and Brand Loyalty via mediator, Brand Association. Fully mediation is also
found in the relationship between Brand awareness and Perceived Quality because there
is an inverse direct relationship between Brand awareness and Perceived quality but there
is an indirect effect between Brand Awareness and Perceived Quality via Brand
Association.
We find that perceived quality is not mediate the relationship between Brand
Awareness( BAW) toward brand loyalty (BL) and between Brand Associations (BA)
toward Brand Loyalty (BL) this not support the hypothesis H7 and H8.

In this case we find that Brand Association( BA) mediate the relationship between Brand
Awareness(BAW) and Perceived Quality (PQ) and between Brand awareness (BAW)
toward Brand Loyalty, thus the hypothesis H9 is supported .

16
 X1 ε 4 = .68 ε 5 = .51 ε 6 = .47 ε 7 = .41 ε 8 = .52 ε 9 = .73
Y4 Y5 Y6 Y7 Y8 Y9
δ 1 = .37 BAW 1
λX 11 = .79 PQ 3 PQ5 PQ6 PQ7 PQ8 PQ 10
X2 Brand
λY 62 = .73 λY 82 = .69
δ 2 = .17 BAW2 λY 42 = .56
λX 21 = .91Awareness λY 72 = .77
ξ1 λY 52 = .70 λY 92 = .52
γ 11= .14
γ1

δ 3 = .82 X2 λX 31 = .43
Y1
BAW 3 ε = .72
BL1 1
γ 21 = −.19 * Brand λY 11 = .53
ε 10 = .70 Y10 Perceived Loyalty
BA1 γ 31 = .51
η1 λY 21 = .70
Y2 ε 2 = .51
Quality β 12 = -.45
ε 11 = .47 Y11 λY 10.3 = .55 η2 BL2
BA2 λY 31 = .66 Y3
ε 3 = .57
Y12 λY11.3 = .73 β 23= 0.98* BL4
β 13 = 1.02 *
ε 12 = .66 BA5
λY 12 .3 = .58 Brand
ε 13 = .65 Y13
As sociation
BA6 λY13.3 = .53 η3
ε 14 = .72 Y14 λY 14.3 = .59
BA7

Note: BAW : Brand awareness, BL: Brand Loyalty, PQ : Perceived Quality, BA : Brand
Association
Figure 3. Result of proposed model in Lisrel

Common method variance

According to the technique of Harman’s one factor test, if a single factor emerge from the
factor analysis or one factor accounts for more than 50 % of the variance in the variable,
common method variance is present (Matilla and Enz, 2002). Our analysis revealed 3
factor structure with no general factor present ( the 1 st factor account for 34 % variance).
It does provide support for the absence of such general bias in the finding ( Matilla and
Enz, 2002).

CONCLUSION

From this research we could present some contribution and managerial implication, as
well as its limitation and suggestion for future research.

Contribution and Implications

One of the contribution of this research is that the result established that four
dimensions model of consumer based brand equity is the distinct dimension/construct
consistent with the conceptualization of Aaker’s (1991, 1996) that was similar to Cobb-
Walgren et al. (1995) and Pappu et al (2005), while contrasted with findings of Yoo and
Donthu (2001,2002) and Washburn and Plank (2002) that also based on Aaker’s
conceptualization, but observed only three brand equity dimensions. Another contribution

17
is that this present research enriched the consumer based brand equity measurement by
tested and found that there are direct and indirect causal relationship among dimensions
of brand equity, while previous studies tested and found associative relationship among
dimensions of brand equity.
In this study, we found that brand association is the most important variable
which affect brand loyalty. We also found that brand awareness affect brand loyalty via
brand associations. This has been indicated by Pitta and Katsanis (1995) that brand
associations of the product can be stored in consumer’s minds after brand awareness of
the product are already in their memory. Thus brand association is mediate the
relationship between brand awareness toward brand loyalty support our hypothesis. We
also found that brand association plays as a suppressor in our model that leads to inverse
relation between brand awareness and perceived quality, and perceived quality toward
brand loyalty that against our hypothesis.

Finding shows that brand association become a very important dimension to

affect brand loyalty. It has implication that manager have to maintain or strengthen their
effort upon the Brand association as: to keep their clean-lines, cheerful atmosphere, good
taste and price, and friendly staffs. Even Mc Donald’s targeting a diverse market ranging
from children to elderly people, manager have to be aware about customer’s
characteristic relevant with their age and individual habit toward the restaurant. The
descriptive statistic of demographic characteristic and information about individual habit
of the consumer in this research may could be considered, or become an example for the
manager to get information from their customer.
While earlier studies were conducted using American (e.g. Yoo and Donthu,
2001,2002, Yoo et al 2000; Washburn and Plank, 2002), Korean samples ( Yoo and
Donthu,2001), Australia sample ( Pappu, 2005), and Turkey sample (Atilgan, 2005) this
present studies used Taiwan sample. Thus, this is one of the few studies testing Aaker’s
(1991) framework of brand equity and measuring brand equity in Australia and Asia.
Finally, the present study measured brand equity in a given product category for a given
brand that not used in previous studies.

Limitation and future research direction

This research describe the causal relationship between brand equity constructs
without relate them to their antecedents like marketing efforts and with their
consequences like value of the firm, that might be more useful for the marketing
strategies.
Even this research using universal questionnaires, but using different setting
might be affect the result. So, for future research direction it also would interesting to do
the research in different setting as cross-national, regional and cultural research, which
are necessity that imply to international marketing strategies.
The method we chose to test the common method variance might be not the best
method. For future study could employ other method.

.
Acknowledgment
This research was funded by the National Science Council, Taiwan, under contract No.
NSC 96-96-2416-H-032-003-MY2

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