An Investigation regarding the relationships among brand parity, brand image, brand satisfaction and brand loyalty

Abstract

In today’s economy, it is getting harder for a business to attract new consumers and keep the existing customer base. Branding helps companies to be differentiated from others and create a sustainable competitive advantage resulting with a brand loyal customer franchise. However, the competition among brands in similar product categories has been increasing resulting in lower differences among brands. This is about brand parity where differences between competing brands in a particular product category start diminishing (Rahman, 2014). It is also defined as consumers perception of similarity amongst brands (Henderson et al., 1998). As brand parity increases, it becomes difficult for a company to create a brand loyal franchise. From a microeconomics perspective, the decision making of consumers are affected by different factors and if a consumer does not recognize a considerable difference between two brands, the switching behavior will likely rise as the price elasticity of the consumer increases. Following the above points, it is important to consider other aspects regarding branding. One of the important aspects is brand image. If a company builds a positive brand image, the customers will become more loyal. The previous research also found support regarding the positive effect of brand image on brand loyalty (e.g. Thai et al., 2020; Alic et al., 2020). Another important concept is brand satisfaction. There are also previous literature that investigated the relationship between brand satisfaction and brand loyalty (e.g. Hwang et al., 2021, Mokha, 2021). Regarding the relationship between brand parity and brand loyalty, there are few and contradictory studies in the literature (e.g. Li, 2010; Iyer and Muncy, 2005). In that sense, there is gap in the literature and it is important to conduct a study that investigate these relationships. Accordingly, the main aim of this study is to investigate the relationships among brand parity, brand image, brand satisfaction, and brand loyalty. The results of the paper will both provide value to literature with possible microeconomics insights based on consumer behavior and to managers regarding their branding strategy. Data were collected from retail industry in Antalya. The results of the study showed considerable and important effects among the variables which will be discussed in the paper. As a main conclusion of the study, it is important for companies to build a strong brand that contributes to microeconomics view of the consumer by creating a loyal customer franchise with a more predictable consumer decision making.