Determinants of Customer-based Brand Equity: A Study of Public and Private Banks

Abstract

The financial services sector has come a long way from arguing that banks are beyond branding to a phase where banks and other financial institutions are using branding strategically—like any other business. Banks have adopted various customer-centric strategies in order to develop a positive perception in the minds of customers. To develop and implement customer-centric strategies, banks need to provide a consistent brand experience to prevent customers from switching to rival banks. In order to understand the customer perception towards bank brand, there is a need to understand the concept of customer-based brand equity and its main determinants. The customer-based brand equity is a set of brand-related associations held by the consumers in their memory (Keller, 1993). The current article aims to identify the various determinants of customer-based brand equity in the banking industry and to verify whether these determinants vary across bank types. For this purpose, a structured questionnaire was developed and a sample of 120 respondents was taken from selected public sector banks and private sector banks of Jalandhar. Factor analysis produced six factors, that is, brand investments, brand performance, brand salience, brand verdict, brand feelings and brand unfamiliarity, which accounted for 73 per cent variance. The findings revealed that out of the six factors extracted from the study, brand verdict emerged as the most significant factor that led to the determination of customer-based brand equity. The results of independent sample t-test showed no significant differences in the perceptions of customers of public and private banks with respect to customer-based brand equity. Correlation analysis was also conducted on the study variables and the results indicated that there are strong, positive and significant relationships between brand performance and brand feelings, and between brand performance and brand verdict. The multiple regression results showed that only brand performance, brand salience and brand feelings have a significant influence on brand verdict, whereas brand investment had a significant negative impact on brand verdict.

Keywords

Brand equity banking sector determinants brand verdict customer-based brand equity

Introduction

The notion of brand equity is one of the most important business concepts that developed in the past 20 years. Brand equity has emerged as one of the crucial issues to be discussed and understood in marketing (Aaker, 1996; Dyson, Farr & Hollis, 1996; Keller, 1993; Kim & Kim, 2005). The word ‘brand equity’ is composed of two words ‘brand’ and ‘equity’. The word ‘brand’ is derived from the German word brandr which means ‘to burn’. It refers to the practice of producers burning their mark (or brand) onto their products in order to differentiate their products from competitors. The American Marketing Association (1960) defines a brand as ‘a name, term, sign, symbol, design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors’. Equity is the term used in the field of finance, which describes the residual claimant or interest of the investors in assets, after all liabilities are paid off and if liability exceeds assets, negative equity exists. Brand equity is considered as the value of brand derived from the marketing efforts. It is the residual income of brand owners after the investment in a brand is paid off. Brand equity is considered as the valuable asset of the company. Aaker (1996) defined brand equity as ‘the set of assets and liabilities linked to a brand name and symbol that adds to or subtracts from the value provided by a product or service to a firm and/or that firm’s customers’. A product or service cannot be known until and unless the product is branded and has become known in the market. Brand equity is the incremental utility and value added to a product by its brand name (BN) (Kamakura & Russell, 1993; Park & Srinivasan, 1994; Rangaswamy, Burke & Oliva, 1993). It is the inherent value of the brand that can be built up and lost over time. Many organizations are spending huge amount on brand investments to build brand image (BI) and to enhance brand awareness (BA) and brand loyalty (BL). Brand building benefits a company’s image by emphasizing its own resources, skills and character. Brands are generally considered a large part of the intangible assets of companies. The valuation of intangible assets is becoming an increasingly important and recognized approach for guiding overall business strategy across most industries, including banking. Banking is the most sophisticated sector in the service industry. Banks mostly follow the brand architecture style of branded houses, where every product from the bank carries the name of the corporate brand. Many business people now recognize corporate brands as fundamental business assets. The corporate brand is the primary brand for service firms (Berry, 2000).

The banking institutions that have traditionally taken charge of branding have been US-based institutions and less their Asian counterparts. Citigroup is the pioneer in this regard, HSBC, Standard Chartered Bank and Barclays have also adapted to the changing demand for branding quite effectively. This analysis reflected that the foreign sector banks show a deeper interest in the field of branding and take various initiatives to enhance their brand equity and that lesser interest is shown by the Indian banks. In order to find out the reasons of unpopularity of the branding concept in Indian banking sector, there is a need to study the perceptions generated in the minds of customers regarding bank branding because it is the customers who can uplift a banking brand or vice versa.

The concept of brand equity has emerged in the past 20 years as a core concept of marketing (Rust, 2004). Brand equity may be defined as a set of elements, such as brand associations (BASs), market fundamentals and marketing assets, that help distinguish one brand from another (Tiwari, 2010). Brand equity has been considered in many contexts (Kim, 2003); in a general sense, brand equity is defined in terms of the marketing effects uniquely attributable to the brand (Keller, 1993). One of the most common definitions of brand equity is that it is a set of brand assets and liabilities, linked to the brand’s name and symbol, which can subtract from as well as add to the value provided by a product or service, and which provides value to customers as well as to a firm (Aaker, 1991). So brand equity can be viewed from different perspectives. As derived from the literature, there are three main dimensions of brand equity, namely, financial-based brand equity (FBBE), employee-based brand equity (EBBE) and customer-based brand equity (CBBE).

The current research has focused on consumer perspective because all three approaches view the value of a brand’s equity as ultimately being a function of the value that the brand delivers to consumers (Aaker, 2004). In turn, this is a function of consumers’ awareness of the brand and the image associations of the brand in their memory (Berthon, Hulbert & Pitt, 1999; Lane & Jacobson, 1995). Brands with high CBBE are those that have high levels of consumer awareness and strong, positive and unique associations in consumers’ memory (Keller, 1993). The current research has mainly focused on the determinants of CBBE.

Literature Review

Atilgan et, al. (2005) aimed to investigate the causal relationships between the dimensions of brand equity and brand equity itself. The study was conducted in the beverage industry of Turkey. Data were collected from a sample of 255 university students in Turkey. The statistical techniques used for the analysis were exploratory factor analysis and structural equation modelling (SEM). The results of factor analysis revealed that four factors were extracted from 13 variables; 74 per cent variance was explained by the model. These four factors were named as BL, BA, perceived quality and BAS. The results of SEM reflected that out of the four factors extracted, BL underlined the positive and direct role in affecting brand equity and the other three constructs had very low or negative influence on brand equity.

Che and Hashim (2007) analyzed the customer perceptions on brand equity dimensions among consumers of bank services in Malaysia. The study was conducted on 265 MBA students at the Graduate School of Business, University of Malaya City Campus, Kuala Lumpur. Multiple regression analysis was applied. The results showed that bank service operation, bank employees, brand-aroused feelings, bank environment and bank word of mouth are important factors in explaining customer satisfaction and customer loyalty.

Norzalita et al. (2010) examined the various factors that determine the brand equity and analyzed the customer perceptions regarding the brand equity of services. The sample included 480 bank customers of private banks of Malaysia. Exploratory factor analysis, correlation as well as regression analysis were used for the analysis. Factor analysis extracted five factors, that is, brand salience, brand performance, brand judgement, brand resonance and brand feelings. Correlation analysis depicted the strong correlation between brand resonance and brand judgement. Regression analysis concluded that only three factors have a significant impact on brand resonance, that is, brand feelings, brand judgement and positive brand performance.

Afsar, Rehman, Qureshi and Shahjehan (2010) attempted to analyze the various determinants of customer loyalty in the banking industry. The main determinants of customer loyalty were perceived quality, trust, satisfaction, switching cost and commitment. The main objective of the study was to analyze the impact of these determinants on customer loyalty. Data were collected with the help of a structured questionnaire of 49 questions. The sampling frame was a complete list of all banking customers in Pakistan. A sample of 325 respondents was selected. Multiple regression analysis was applied. The results indicated that the effect of satisfaction and trust on commitment is positive and significant. The effect of perceived quality on satisfaction is positive and significant but low. The effect of satisfaction, switching cost and commitment on customer loyalty is positive and significant.

Solayappan and Jayakrishnan (2010) attempted to examine the relationships of brands with their customers by focusing on the predictors of patient satisfaction, BL, positive word of mouth and repeat visit. Data were collected with the help of a structured questionnaire from the sample of 365 patients staying in the hospital for a minimum of 4 days. The study was undertaken in Tamil Nadu. The schedule was prepared to measure the selected brand variables, that is, brand consideration, brand preference (BPR), BI, brand trust, BL, patient satisfaction, positive word of mouth, revisit intension and relationship of the brand. The data were analyzed with appropriate statistical tools such as descriptive statistics, correlation and stepwise multiple regression. The results concluded that among the brand variables, brand trust and BI were the most important predictor variables on patient satisfaction. Brand loyalty is highly influenced by BPR, BI and patient satisfaction. It is inferred that BI, BL and brand consideration significantly and positively influenced positive word of mouth and patient satisfaction, and patient loyalty and brand trust significantly positively influenced the brand–customer Relationship.

Venkatesh (2011) examined the influence of external brand factors on customer’s evaluation of banking services in India. The sample consisted of 1,468 customers from different parts of India from 26 different banks operating in the country. Correlation, factor analysis, multiple regression and discriminant analysis were used. The findings revealed that the associations between each of the brand factors were positive. The factors which contribute mainly to a positive brand verdict are core service, feelings, price/value for money, customer satisfaction and brand attitude.

Mishra and Datta (2011) focused on developing a causal model to test the significant strength of the various perpetual assets of CBBE known as the Perpetual Asset Management (PAM) model. The perpetual assets, that is, BN, brand communication (BC), BAS, brand personality (BP), BA, BI, perceived brand quality (PBQ) and BL, have been classified as antecedents and BPR and purchase intention (PI) were regarded as consequences of CBBE. Data were collected through a questionnaire and interviews. The brand Nokia has been taken for the research. A sample of 818 people was taken for the study consisting of both the genders. Quota sampling technique was chosen for the research. The survey was undertaken in the cities of Cuttack and Bhubaneswar. The statistical techniques used for the analysis were exploratory factor analysis and SEM. The findings revealed that there is strongest causal effect of BC–PBQ followed by BC–BL, CBBE–PI and BAS–CBBE, BC–CBBE, BPR–PI but BN–PBQ and BC–BI have a negative relationship. The total effect of BC–PBQ is the strongest.

Thiripurasundari and Natarajan (2011) focused on conceptualizing, measuring and managing brand equity. The main purpose of the study was to determine the factors determining brand equity in car industry and to develop a CBBE model. The study was based upon primary and secondary data. This particular study used in-depth interview as a means for obtaining primary data. Survey method was adopted to elicit the views of local and global brand car owners. The customers’ preference towards local and global brands was studied by administering structured interviews with 200 customers in Pondicherry city. The researchers proposed several dimensions of brand equity, that is, brand knowledge, brand application and brand relationship, BPR and BL. Two models were developed for CBBE. In model I, BPR was the dependent variable and other dimensions were independent. In model II, BL was the dependent variable. The results showed that 31 per cent of the variance was explained by model I. Brand quality and customer satisfaction were the most important factors in explaining BPR. In model 2, brand quality, brand value, brand prestige and customer satisfaction were able to explain BL better compared to the rest of the factors. The model explained almost 36 per cent (adjusted R² = 34 per cent) of the variance. Brand equity has significantly positive effects on both BPR and loyalty.

Lee and Leh (2011) developed a valid and reliable model of Malaysian brand equity by assessing the dimensions of the brand equity and its constructs. This study focused on four dimensions of brand equity, which are perceived quality, BASs, BL and BA and its measurements. The variables under these factors were taken from the literature. Data were collected with the help of a structured questionnaire from a sample of 489 respondents. Factor analysis was conducted to identify dimensions of brand equity and its constructs. The results reflected that four factors were extracted from 30 variables. These four factors explained 59 per cent of the total variance. The findings concluded that this model included four factors which were regarded as the dimensions of brand equity.

Abad and Hossien (2011) investigated the causal relations between the dimensions of brand equity and brand equity itself. The study developed a model to identify the factors that influence brand equity and assessed BL and BI’s mediating effect between brand attitude, BP, BAS with brand equity. The hypothesized model comprised brand attitude, BAS and BP which affect the brand equity through BL and BI. Data were collected through focus groups and questionnaire from a sample of 417 respondents who were the consumers of chocolate industry in Iran. The statistical techniques used for the analysis were confirmatory factor analysis and SEM. The results confirmed the role of BL and BI as mediating factors in the building of brand equity. But, only BAS has large indirect relationship with brand equity. This indirect relationship indicated that BAS was related to brand equity through the BL. In this linkage, BL fully mediated the relationship, while BI acts as partial mediator. The findings of the study reflected that brand attitude does not have a considerable positive effect on brand equity but it has a significant positive influence on BL. Brand association was positively related to both BL and brand equity. Brand image and BP have a positive influence on brand equity.

Cerri (2012) aimed to measure the brand equity in the Albanian banking sector. Nine banks, which make up more than 98 per cent of the domestic market in banking services (according to the official data of the Bank of Albania), were chosen to be included in the study. Using direct interviews, 250 bank customers were interviewed. After an extensive literature review about the branding and services branding, seven measures were chosen to determine the brand equity, that is, brand recall, brand familiarity, quality of BN, likelihood of changing service provider, number of BASs, origin of BASs and uniqueness. Seven correlation tests were conducted, aiming to reveal the level of correlation between scores of consumer-based brand measures for each brand with respective market share indicators for each brand. The findings revealed that banks with high market shares also had high indicators of CBBE. This means the CBBE indicators are also good indicators of brand equity, since CBBE showed high correlation with market share.

Dua et al. (2013) examined the interrelationship of Aaker’s CBBE dimensions in the banking sector. Data were collected with the help of a structured questionnaire from 150 respondents of Punjab. Structural equation modelling was used. The results stated that all dimensions, that is, perceived quality, BL, BA and BAS, have a direct positive effect on brand equity.

Tekan et al. (2012) analyzed the various factors that affect the special value brand of Saderat on the basis of CBBE model. The sample constituted 384 depositors who had opened account since 2006 in branches of Bank Saderat in Amol Township. Friedman test was applied in the study. The results showed that four indicators, that is, tendency to pay higher prices, familiarity with brand, organizational relationships and permanency of BI, affect the determination of special value brand, whereas customers’ appreciated quality, appreciated quality based on cost, brand uniqueness, awareness from BN and popularity of brand do not affect the determination of special value brand of Bank Saderat.

Gaps in the Existing Literature

Several studies have focused on the determinants of CBBE, namely, Atilgan et, al. (2005), Chernatony and Harris (2001), Debling (2000), Gleerup and Harborn (2009), Che Ha and Hashim (2007), Keller (1993), O’Loughlin aet, al. (2004), Mishra and Datta (2011), Norzalita and Norjaya (2010), Solayappan and Jayakrishnan (2010), Venkatesh (2011) and Thiripurasundari and Natarajan (2011). All these studies have used the same models to measure the CBBE, that is, brand resonance model developed by Keller and Aaker’s model of CBBE, and found almost similar determinants. None of the study has applied a different scale for building CBBE. This evidences a gap in the existing literature. In order to fill this gap, the current research is an attempt to seek the new determinants of CBBE in the Indian banking sector. In this pursuit, new variables are added in the existing model which is relevant in the Indian context. This is supported by the reliability and validity check. Moreover, earlier studies have reported the controversial relationship of determinants of brand equity. Atilgan et, al. (2005) and Ebrahimi et al.(2012) have found the insignificant influence of BA, perceived quality, BASs and brand uniqueness on brand equity of banks. But these findings were contradicted by numerous studies, that is, Mishra et al. (2011), Lee et al. (2011), Hossein (2011) and Dua et al. (2013). Hence, there is a need to develop a reliable model which presents a clear picture of the determinants of CBBE. Therefore, the present study focuses on developing a model which investigates the impact of various determinants of brand equity.

Objective and Scope of the Study

Customer-based brand equity is imperative for service sector because it helps to differentiate the products and services in the minds of customers which in turn enhances the customer loyalty and retention. This study was undertaken with the viewpoint of identifying the various factors and the most significant dimension which affects CBBE. The idea is to analyze whether the CBBE differs across public and private sector banks. The study also examines the extent of the relationship between the determinants of CBBE.

Rationale of the Studies

Many service industries, such as banking or telecommunications, are facing increasing competition, which makes it more important for the service provider to establish a strong brand, not only in the market but also in the minds of the customers (Bamert & Wehrli, 2005; Keller, 2003). Therefore, the need to determine the CBBE arises. The banking sector is perhaps the largest industry which caters to the needs of various segments of the population. Indian banks have started realizing that business depends on client service and the satisfaction of the customer. Some authors suggested a positive connection between customer satisfaction and brand equity (Aaker, 1992; Anderson & Sullivan, 1993; Blackston, 2000; Keller, 1993). This compelled them to focus on building brand equity that leads to enhancing the customer satisfaction. However, the branding review of literature has been more focused on goods branding, relatively neglecting the services branding. Brand equity as an important concept of services branding has not received the deserved attention from academics and services companies’ managers. The current research mainly focuses on CBBE in the banking sector since it is a well-developed and consolidated sector which employs hundreds of individuals and has a very important role in Indian economy.

Data Base and Research Methodology

Method of Data Collection

The study is based on the primary data derived from a structured questionnaire administered to the bank customers. The questionnaire has been prepared on the basis of the existing literature (Atilgan et, al. 2005; Chernatony & Harris 2001; Debling, 2000; Gleerup & Harborn 2009; Che Ha & Hashim, 2007; Keller, 1993; Loughlin et, al. 2004; Mishra & Datta 2011; Norzalita & Norjaya 2010; Solayappan & Jayakrishnan 2010; Thiripurasundari & Natarajan 2011; Venkatesh, 2011). The questionnaire aimed at deriving information with respect to determinants of CBBE. Top 10 banks, 5 each in public and private sector were selected on the basis of the report provided by Brand Finance Banking 500 (2013). Brand Finance is the world’s leading brand valuation consultancy of London. The Brand Finance Banking 500 is published by Brand Finance plc and is the only study to rank the top 500 most valuable banks in the world. The five banks selected in each category are State Bank of India, Punjab National Bank, Bank of Baroda, Bank of India and Canara Bank from public sector banks. Among private banks, ICICI, HDFC, Axis, Kotak Mahindra and Yes Bank were selected on the basis of highest brand values reported in Brand Finance Banking 500, 2013.

Sampling Frame

The survey targeted customers of the main branch of the selected banks from Jalandhar using purposive sampling. Respondents were approached by visiting the banks. Questionnaires were administered face-to-face and some questionnaires were also mailed online to the customers. Overall, 300 questionnaires were distributed, 267 were received, out of which 120 respondents were selected on the basis of the experience they had with the bank; 12 customers have been deliberately selected from each bank to maintain homogeneity in the sample. Those customers who had 5 years or more experience with the bank were selected.

Statistical Tools

Exploratory factor analysis: Factor analysis was used to reduce the total number of items to a smaller number of underlying factors. Principal components analysis was used to extract factors (eigenvalues > 1). Varimax rotation was used to facilitate the interpretation of the factor matrix. The Bartlett’s test of sphericity and the Kaiser–Meyer–Olkin (KMO) measure of sampling adequacy were used to validate the use of factor analysis.

Weighted averages: An average in which each quantity to be averaged is assigned a weight. These weightings determine the relative importance of each quantity on the average.

Independent sample t-test: The independent samples t-test (or independent t-test) compares the means between two unrelated groups on the same continuous, dependent variable.

Correlation: Correlation reflects the statistical relationship between two random variables or two sets of data.

Multiple regressions: Multiple regression analysis is a powerful technique used for predicting the unknown value of a variable from the known value of two or more variables—also called the predictors.

Theoretical Framework

Customer-based brand equity is termed as value of the brand perceived by the customer. It can be considered as the ‘added value’ endowed to a product in the thoughts, words and actions of consumers (Keller, 2010). The value of a brand—and thus its equity—is ultimately derived in the marketplace from the words and actions of consumers. Consumers decide with their purchases, based on whatever factors they deem important, which brands have more equity than other brands (Keller, 2010). The value perceived by the customers is known as CBBE. It is considered as the sum total of values associated with a brand in the minds of customers. These might include awareness, loyalty and recognition. The greater the equity, the more likely customers will trust and choose the company’s product or service.

Customer-based brand equity is beneficial for marketers because they regard it as a tool to differentiate their products or services in the minds of customers because customers are the final users of the product or services. It is their way of assessing the value of the brand in the minds of the customer. Keller (1993) coined the term customer-based brand equity and defined it as the differential effect of brand knowledge on consumer response to the marketing of the brand. In order to evaluate the customer behaviour towards branding, the study will test the theory of CBBE in the Indian banking sector. Banks are known to focus much of their marketing on customer retention, which makes this specific industry extra interesting for an investigation about customer behaviour towards brand equity. Banks strive for loyal customers, who are the ultimate reward of branding (Farrell & Klemperer, 2006).

Analysis

Factor analysis was used to reduce the total number of items to a smaller number of underlying factors. Principal components analysis was used to extract factors (eigenvalues > 1). Varimax rotation was used to facilitate the interpretation of the factor matrix. The Bartlett’s test of sphericity and the KMO measure of sampling adequacy were used to validate the use of factor analysis. Exploratory factor analyses were conducted on 32 variables and six factors were extracted, namely, brand investments (eight items), brand performance (nine items), brand salience (four items), brand unfamiliarity (four items), brand feelings (three items) and the brand verdict (four items) (Figure 1).

Brand investments: Brand investments refer to the expenditure incurred by the company in order to make a differentiation in the minds of customers regarding their brand. Companies frequently advertise their products to enhance their profits. An increase in advertising appears to lead to an increase in profitability (Ors, 2006).

Brand performance: Brand performance refers to the extent to which the product meets the customers’ functional needs.

Brand salience: Brand salience relates to how often the brand is evoked in purchasing and consumption situations. It refers to the awareness of the brand to the customers.

Brand unfamiliarity: It refers to the lack of knowledge of the customers towards the brand.

Figure 1.

Source: Authors’ own.

Brand feelings: Brand feelings are customers’ emotional responses and reactions towards the brand.

Brand verdict: Brand verdict is the result of all the efforts made by banks in order to create a strong BI in the minds of customers. It is the final perception of the customers built over a time in the mental map of the customers.

Exploratory Factor Analysis

The convergent and discriminant validity of the constructs were tested by principal components analysis. The KMO index was found 0.808, which indicates the presence of sufficient inter-correlations in the data matrix and the appropriateness of factor analysis. Bartlett’s test of sphericity indicates strength of the relationship among the variables. The observed significance level is 0.000. This means that the strength of the relationship among the variables is strong. Thus, data is a good fit for factor analysis. The brand attributes constrained to six factors accounted for a total of 73.044 per cent of the variance. Table 1 shows the results of exploratory factor analysis.

Table 1.

Exploratory Factor Analysis

Constituent Variable	Label	Factor Loading	Factor Name	Variance Explained by the Factor (%)
The advertising campaigns for my bank are seen frequently.	V1	0.859	Brand investments	19.065
My bank advertisements cater to the needs of rural society by advertising different schemes.	V2	0.821
My bank adds emotional value in advertisements.	V3	0.809
My bank considers various green initiatives.	V4	0.794
My bank has assumed its responsibility towards society.	V5	0.785
My bank has an attractive website.	V6	0.782
The ad campaigns of my bank seem very attractive, compared to campaigns of competing brands.	V7	0.718
Vision and mission are clearly stated in the advertisements.	V8	0.617
The services of my bank are effective	V9	0.795	Brand performance	17.722
I feel proud when I tell others that I use my specific bank.	V10	0.763
My bank has a strong image.	V11	0.746
Compared to other competing banks, my bank gives better services.	V12	0.742
My bank has adopted customer relationship management (CRM) system.	V13	0.713
My bank is globally recognized.	V14	0.691
My bank uses sophisticated technology.	V15	0.643
I feel my bank is the only bank that I need.	V16	0.628
My bank delivers services which it has promised.	V17	0.568
My overall opinion of my bank is good.	V18	0.834	Brand verdict	10.463
I trust my bank very much.	V19	0.785
The quality of my bank is consistent.	V20	0.666
I really love my bank.	V21	0.624
I can quickly recall the symbol/logo of my bank.	V22	0.868	Brand salience	9.988
I know how the symbol of my bank looks like.	V23	0.762
I know the colour that symbolizes my bank.	V24	0.735
I can recognize my bank among other competing banks.	V25	0.687
I use my current bank due to advice from my parents.	V26	0.841	Brand unfamiliarity	8.774
I am a customer of my current bank because my parents opened my youth accounts here.	V27	0.787
I am a customer of my current bank because I feel I do not know enough about the banking industry to decide whether the bank change is economical for me or not.	V28	0.781
I am a customer of my current bank because the switching process to another bank is too demanding.	V29	0.588
Bank gives me a feeling of excitement.	V30	0.757	Brand feelings	7.031
Bank gives me a feeling of self-respect.	V31	0.623
Bank gives me a feeling of security.	V32	0.570

Source: Authors’ findings.

Weighted Averages

Weighted averages are used to find out the most significant factor among the six factors extracted through factor analysis, that is, brand verdict, brand salience, brand performance, brand investments, brand feelings and brand unfamiliarity, and their means were calculated through descriptive statistics in SPSS. The results are presented in Table 2.

Table 2 shows the weighted average scores (WAS) of all the six factors extracted from the factor analysis. As shown in the above table, the maximum WAS is of the ‘brand verdict’ factor. Brand verdict is the customers’ judgement about the bank brand. Therefore, it is found out that brand verdict (WAS = 3.8396) is the most significant factor that affects the customers’ perceptions towards various brand attributes of banks as indicated by WAS. Brand salience (WAS = 3.8042) is the second most significant factor that affects the customers’ perceptions. Brand performance (WAS = 3.6806), brand feelings (WAS = 3.6028) and brand investments (WAS = 3.2865) have acquired the third, fourth and fifth rank, respectively. Brand unfamiliarity emerged as the last factor that determines the CBBE.

Table 2.

Weighted Average Score Table

Factors	Variables	Mean	Weighted Average	Rank
Brand investments	V1	3.2417	3.2865	5
	V2	3.2333
	V3	3.3417
	V4	3.3250
	V5	3.4250
	V6	3.0833
	V7	3.3000
	V8	3.3417
Brand performance	V9	3.7750	3.6806	3
	V10	3.7500
	V11	3.2250
	V12	3.6583
	V13	3.5167
	V14	3.8583
	V15	3.9750
	V16	3.7667
	V17	3.6000
Brand verdict	V18	3.9250	3.8396	1
	V19	4.0083
	V20	3.7500
	V21	3.6750
Brand salience	V22	3.8917	3.8042	2
	V23	3.7167
	V24	3.7417
	V25	3.8667
Brand unfamiliarity	V26	2.8750	2.9958	6
	V27	2.5417
	V28	3.2833
	V29	3.2833
Brand feelings	V30	3.6167	3.6028	4
	V31	3.4333
	V32	3.7583

Source: Authors’ findings.

Independent Sample t-test

Independent sample t-test was performed to identify the significance of differences of means in customers’ perceptions between the private and public banking sectors towards CBBE.

H0: There is no significant difference between public and private sector banks with respect to CBBE.

H1: There is a significant difference between public and private sector banks with respect to CBBE.

The results of independent sample t-test are reflected in Table 3.

The findings revealed that no significant differences are found between public and private banks with respect to the six factors of CBBE as p value < 0.05. Therefore, it can be concluded that the factors revealed in the study put same effect on both bank types. Having empirically established that there are no significant differences between the two groups of banks, previous research in this field has also reported similar findings. For instance, Pinar, Girard, and Eser (2012) compared the private, public and foreign banks in India in terms of CBBE dimensions and their findings revealed that there are no significant differences between private and public banks with respect to all factors of CBBE used in the measurement.

Table 3.

Independent Sample t-test

	t-value	Sig. (2-tailed)
Brand investments	–1.739	0.085
Brand performance	–1.982	0.050
Brand verdict	–1.240	0.217
Brand salience	1.411	0.161
Brand unfamiliarity	–0.643	0.522
Brand feelings	–1.286	0.201

Source: Authors’ findings.

Correlation

In order to develop further understanding of relationships among all the brand equity constructs, the Pearson correlation technique was calculated in the study. Numerical values of the correlation coefficients reflect the degree of association between each of the brand equity constructs.

From Table 4, correlation results show that there is a strong correlation between brand feelings and brand performance (r = 0.683) at the 1 per cent significance level and between brand performance and brand verdict (r = 0.611).

Table 4.

Pearson Correlation

	Brand Investments	Brand Performance	Brand Verdict	Brand Salience	Brand Unfamiliarity	Brand Feelings
Brand investments	1	0.363**	0.224*	0.503**	0.282**	0.491**
Brand performance	0.363**	1	0.611**	0.198*	0.329**	0.638**
Brand verdict	0.224*	0.611**	1	0.352**	0.161	0.521**
Brand salience	0.503**	0.198*	0.352**	1	0.188*	0.328**
Brand unfamiliarity	0.282**	0.329**	0.161	0.188*	1	0.169
Brand feelings	0.491**	0.638**	0.521**	0.328**	0.169	1

Source: Authors’ findings.

Note: **correlation at 1% level of significance and *correlation at 5% level of significance.

Multiple Regressions

A multiple regression equation was developed to relate the construct of brand verdict with other brand equity constructs. For the purpose of developing the regression equations, the five brand equity factors, that is, brand investments, brand performance, brand salience, brand unfamiliarity and brand feelings, were taken as independent variables and the brand verdict as a dependent variable. The selection of dependent variable was done on the basis of weighted averages, which depicted that brand verdict is the most significant factor when compared to other factors. Brand verdict shows the overall evaluation of customers’ perceptions. The results of multiple regressions are depicted in Table 5.

Table 5.

Multiple Regression Results

Independent Variables	Unstandardized Beta	Standard Error	t-value	Sig.
Constant	1.300	0.286	4.548	0.000
Brand investments	–0.148	0.066	–2.233	0.028
Brand performance	0.453	0.083	5.440	0.000
Brand salience	0.222	0.061	3.639	0.000
Brand unfamiliarity	–0.030	0.057	–.530	0.597
Brand feelings	0.161	0.075	2.138	0.035

Source: Authors’ findings.

Note: R = 0.468, R² = 0.445 and F-value significant.

Overall R² for the estimated regression model was 0.445, with F-value significant at 1 per cent significance level. From Table 5, it is evident that brand performance emerged as the most important determinant of brand verdict, followed by brand salience (0.222) and brand feelings (0.161). Hence, it can be concluded that the higher the performance of the brand, higher the positive evaluation of banks by the customers. The results also showed a negative relationship of brand investments and brand unfamiliarity with brand verdict which concluded that higher brand investments and brand unfamiliarity generate a negative perception in the minds of customers towards the bank.

Conclusion

The study extracted six relevant factors in determining CBBE. Among all the six factors, brand verdict emerged as the most significant factor in determining CBBE because brand verdict is the overall opinion of the customers who see the bank as a brand. Brand verdict is the result of all the efforts by banks in order to create a strong BI in the minds of customers. It is the final perception of the customers built over a time in the mental map of the customers. Therefore, brand verdict is selected as a dependent variable in the study and the remaining factors are treated as independent variables. In the study, brand performance, brand salience and brand feelings are evident to be important determinants that are helpful in developing brand verdict. Brand investments and brand unfamiliarity showed a negative relationship with brand verdict. For building a successful brand, banks need to focus on creating a good perception in the minds of customers as well as making them aware about their bank brand. But due to higher brand investments and brand unfamiliarity, banks develop negative perception in the minds of customers. Brand investments refer to the expenditure incurred by the company in order to make a differentiation in the minds of customers regarding their brand. Companies frequently advertise their products to enhance their profits. An increase in advertising appears to lead to an increase in profitability (Ors, 2006). All customers in the market for a product will not attend to and process advertising messages equivalently (Richins et al., 1992). The impact of advertising does not have same effects on consumers. Some perceive it to be more important and some think it is a waste of time and money. In fact, Assael (1984) maintained that consumer decision processes can be classified by level of product involvement. In the case of low involvement with the product, consumers do not care much about advertising and pay very little attention to it (Assael, 1984). Consumers characterized by different levels of perceived differentiation might, in fact, engage in different buying behaviour and do not respond equally to marketing stimuli such as advertising (Assael, 1984). This reflects in the study that brand investments are inversely related with brand verdict. It means any investments towards the brand negatively affect the perceptions of consumers. It is interesting to know that the customers, who do not know enough about the banking industry, enhance the bank profits because these customers adopt herd behaviour while choosing a bank and the young customers choose their banks due to the advice of their parents. The reason behind this is that they are unfamiliar with the bank brand. A study confirmed that intergenerational influence plays a very important role while choosing a bank (Gleerup & Harborn 2009). But such type of unfamiliarity has a negative impression in the minds of customers. The determinants revealed in the study will help in assessing the customer behaviour towards the bank brand and provide a road map and guidance to marketers in building strong brands. The study has contributed a branding model for banks in particular and services industries in general. No differences were found in the perceptions of customers of public and private sector banks regarding CBBE, although the same model has been applied for both the bank types. The model has identified the various components of CBBE which can be used for improving bank–customer relationship.

Implications of the Study

The results of the study have strong implications for the banking industry as it provides a methodology for effectively measuring CBBE.

Brand verdict emerged as the most significant factor encompassing the overall opinion of the customers. This finding again holds an important implication for the banking industry that it should focus its attention on building strong brand verdict, with the help of brand performance, salience and brand feelings factors.

‘Brand unfamiliarity’ comes out to be a significant factor which negatively affects the brand verdict. It is implied that banks do not provide adequate information to the customers. Therefore, they should come up with innovative strategies in order to familiarize the customers towards their brand.

Footnotes

Acknowledgements

We are grateful to the anonymous referees of the journal for their extremely useful suggestions to improve the quality of the article. Usual disclaimers apply.

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