Factors Influencing Customer-based Brand Equity in Selected Insurance Companies in Ethiopian
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Date
2015-05
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Addis Ababa University
Abstract
Despite the fact that the Ethiopian insurance industry is still dominated by the state owned insurance company, the competition among private insurance companies together with the industry giant has become intense-which lead companies to differentiate their offering from those of their competitors in order for them to maintain their current positions as well as to sustain a significant amount of market share in the ever growing insurance industry. Mean while, the objective of this paper is to investigate brand equity dimensions and creation of brand equity, thereby providing a conceptual framework for deeply understanding consumer based brand equity related to Ethiopian insurance industry.In view of that, this study employed Structural Equation Modeling (SEM) to analyze factors influencing Customer-Based Brand Equity in the Ethiopian Insurance Industry using Aaker’swell-known conceptual framework, which comprises four exogenous variables: Brand Awareness, Brand Association, Perceived Quality, and Brand Loyalty and one endogenous variable: Brand Equity. A sample of 400 respondents(customers)are selected using quota sampling method from the five insurance companies, which constitutes around 70% of the market share (EIC, Awash, NIB, Africa, and Nile insurance) proportional to their market share and from the quota, respondents are selected on judgmental basis. The findingsprovide a strong support for hypothesis 3 and hypothesis 4, which indicated the positive and direct role of perceived quality (β=0.48, p<.001) and brand loyalty (β=0.34, p<.001) in affecting brand equity.Therefore, for competitive industry such as insurance, the key is to create a unique, distinctive and superior quality to provide customers with a reason to buy the brand, then work to keep their loyalty and gain their repeat business.On the other hand, both brand awareness (β=0.01, p<.05) and brand association (β=0.07, p<.05)are found to have very low parameter estimates. Therefore, it can be concluded that they did not have a direct significant influence on brand equity.However, as can be seen from the correlation analysis the intercorrelation between brand awareness to perceived quality and brand loyalty and between brand association to perceived quality and brand loyalty is positive and statistically significant. Accordingly, we can understand that brand awareness and brand association might be antecedents of brand equity by affecting perceived quality and brand loyalty.
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Keywords
Brand, Brand Equity, Customer-Based Brand Equity