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IMPACT OF BRAND EQUITY ON CUSTOMER CHOICE IN TRAVELLING SERVICES OF PAKISTAN Muhammad HaroonHafeez College of Business, University Utara Malaysia Narentheren s/o Kaliappen College of Business, University Utara Malaysia WaduThanthiri Gunathilaka Samantha College of Business, University Utara Malaysia Wan Najwa Arifah W. Ahmad College of Business, University Utara Malaysia Mai Syaheera Binti Miau Shaari College of Business, University Utara Malaysia ABSTRACT This empirical study looked into the impact of brand equity on customer choice in travelling services of Pakistan. Hence, the main aim of this study was to gather, tabularize, examine and interpret the data pertaining to the Brand Equity in travelling and transportation services of Pakistan. Survey method has been used for conducting the research. Data has been gathered from the respondents belonging to the twin cities i.e. Rawalpindi and Islamabad.Self-administered questionnaires were used as an instrument for data collection. Data has been analysed using descriptive and inferential statistics to test the hypothesis. Thus, the findings shows that brand awareness and familiarity, perception of service quality and the extent to which the customers are loyal to a particular brand do have a significant impact on customers choice or purchase decision. Keywords:Brand Equity, Brand Awareness, Brand Loyalty, Perceived Quality INTRODUCTION Branding in contemporary era is not merely bounded to tangible goods; it has an unmitigated scope in services as well. Service branding has become a subject of enormous liking for the academic researchers and marketing experts. Relatively inadequate research exists regarding brand equity of the services, indicating that majority of the researches are related with the physical goods or they emphasized on areas other than service branding and brand equity. Brands play a highly significant role for the accomplishment of business goals as they are regarded as the basis of competitive lead. Because of increased competition and excess productive capability in about each business, strong brands allow companies differentiate them in the market on the basis of the superiority of their products and services in order to satisfy customer desires. The researchers have shed light on the importance of brand equity research in the service industry. It is recommended that due to existence of the inherent dissimilarities among the goods and services, the construct of brand equity may demand some adaptation for extension into the viewpoint of service marketing.
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Service industries include financial services, health, education, telecommunications and travel & tourism. Service quality encourages customer pleasure, motivates intent of repurchase, and encourages recommendations. Customer contentment enhances profitability, market share, and return on investment. The purpose of this study is to examine the impact of brand equity on customer choice in travelling services of Pakistan.This study analyses data from the customers of travelling services in Pakistan and this will contribute additional input to the literature in the context of brand equity and customer choice.

LITERATURE REVIEW Brand Equity The emergence of brand equity has heightened the significance of marketing strategies and provided focus for managers and researchers (Keller, 2003). Brand equity is accepted as the overall utility that customers place in a brand compared to its competitors (de Chernatony and McDonald, 2003; Vazquez, Belen del Rio, and Iglesias, 2002). Aaker (1991) defines brand equity 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 services to a firm and/or to the firms customer(p.15). Keller (2008) defines brand equity as, The differential effect that brand knowledge has on consumer response to the marketing of that brand (p.70). Srivastava and Shocker (1991) describe brand equity as the incremental value that a brand name grants to a product. Lassar, Mittal, and Sharma (1995) stated brand equity as the enhancement in the perceived utility and desirability a brand name confers on a product. High brand equity generates a differential effect, higher brand knowledge, and a greater consumer response (Keller, 2003), which generally steers to superior brand performance, both from a financial and a customer perspective. Figure 1 illustrated the dimension of brand equity. Figure 1: Dimensions of Brand Equity
Brand Equity

Brand Awareness

Perceived Quality

Brand Loyalty

Source: Aaker (1991)

There is a unified consent of researchers that services and products are two different dimensions of marketing (Shostack, 1977; Zeithaml, 1985). Much of the current
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marketing literature indicates that the principles of product brands do not apply directly to services (Aaker, 1991; Keller, 2003; Knowles, 2001). Brand Awareness According to Aaker and Joachimsthaler (2000) people like the familiar and are prepared to ascribe all sorts of good attitudes to items that are familiar to them. Brand awareness reflects in the customers capability to recognize the brand under varying situations (Keller, 1993). Awareness refers to the positioning of the brand in the customers mind. Brand awareness is regarded as an important antecedent of customer value (Oh, 2000; Kwun and Oh, 2004; Webster, 2000). Perceived Quality Perceived quality and satisfaction have been shown to be good predictors of travellers future behavioral intentions (Tsiotsou R, 2006).While perceived quality and perceived value are cognitive responses to a service offering, overall satisfaction is an emotional response based on a holistic view of phenomenon. Berry and Parasuraman (1996) stated that service is the essence of services marketing and service quality is its foundation. Perceived service quality is a users judgment about a services overall excellence or superiority. Quality is a human concept based on highly subjective criteria and seems to be a highly personal matter. Improving technical aspects of goods and services is not sufficient to retain customers. Hospitality industry should invest more effort in improving perceptions of service quality so customers will become repeat visitors and spread positive word-of-mouth to their social group (Brady and Cronin, 2001). Making a profit may not be an ultimate goal for an organization; rather it may be to satisfy customers needs and wants (Brady and Cronin, 2001). Customer Loyalty Oliver (1997) defined brand loyalty as a deeply held commitment to repurchase or patronize a preferred product or service consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behavior. This description refers to two diverse views of brand loyalty. One of them is behavioral (Bloemer and Odekerken-Schroder, 2002) and the other relates to attitudinal aspect of loyalty. Behavioral brand loyalty comprises of repetitive patronage of the brand whereas attitudinal loyalty includes a degree of commitment and preference to a brand (Chaudhuri and Holbrook, 2001). Attitudinal loyalty is measured by intention of word-of-mouth (Boulding, Kalra, Staelin, and Zeithaml, 1993), repeat purchase (Cronin and Taylor, 1992), and eagerness to pay a higher price (Zeithaml, Berry, and Parasuraman, 1996). Loyalty has typically been conceived as a behavioral construct relating to intentions towards repeat purchase (Harris and Goode 2004; Kumar and Shah 2004; Magi
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2003; Srinivasan, Anderson, and Ponnavolu 2002; Wallace, Giese, and Johnson 2004). METHODOLOGY The general objective of this study is to explore the impact of brand equity on customer choice in travelling services of Pakistan.The specific objectives are as follows: 1) To measure the customers awareness levels, perception of quality and loyalty related with travelling and transportation services in Pakistan. 2) To investigate the bases of customers preference with reference to existing travelling and transportation services. Figure 2: Research framework

Brand Awareness Customer Choice Perceived Quality

Customer Loyalty

The research framework in Figure 2 examinesthe impact of brand equityon customer choice in travelling services of Pakistan.Specifically, this is study based on brand awareness, perceived quality and customer loyalty as independent variables and customer choice as dependent variable. Research Questions: RQ 1: Does brand awareness influence customer choice? RQ 2: Does perceived quality influence customer choice? RQ 3: Does brand loyalty influence customer choice? Based on the above-mentioned research questions, this study intended to addresses the following hypotheses: H01: H1: H02: H2: H03: H3: There is no significant relationship between customer choice and brand awareness. There is significant relationship between customer choice and brand awareness. There is no significant relationship between customer choice and perceived quality. There is significant relationship between customer choice and perceived quality. There is no significant relationship between customer choice and customer loyalty. There is significant relationship between customer choice and customer loyalty.
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Research Design This study employs quantitative research method. This study is survey based. The sample of this study involved 300 respondents from the twin cities. The respondents were chosen on convenience basis. Sampling unit comprises of college and university students and faculty members.Data has been gathered from the respondents belonging to the twin cities i.e. Rawalpindi and Islamabad. Selfadministered questionnaires were used as an instrument for data collection. In order to avoid any errors and ambiguities in the questionnaire, a pretest was conducted and responses were gathered from 20 respondents. Table 1: Source of instrument (Operationalization) Source Aaker (1991, 1996 & 2007), Aaker (1996) Aaker (1991, 1996 & 2007) &McLoughlin (2007) Aaker (1991) Hellofs& Jacobson (1999) First Choice Readiness to pay Premium Price Kim & Yoon (2004) Athanassopoulos&Lliakopoulos (2003) others Aaker (1991, 1996 & 2007) &McLoughlin (2007) Tasci, Gartner &Cavusgil (2007) Tasci, Gartner &Cavusgil (2007) Kim & Yoon (2004) Zeithaml&Bitner (2006) Majumdar&Venkataraman (1998) Tasci, Gartner &Cavusgil (2007) support Tasci, Gartner &Cavusgil (2007) Ticket Rates Area Coverage Brand Image Customer Services Terminal locations In-Transit Customer Safety and timeliness Perceived Quality Switching Intention Recommendation to Brand Loyalty Dimensions Brand Awareness Top of Mind Awareness Sub-Dimensions

The table 1 explains the source of instrument for each variable which adapted from various studies in order to measure the hypothesis. Hence, the overall model of the brand equity for travelling services shown in figure 3 based on variables and dimensions. The Statistical Package for Social Sciences (SPSS) version 17 used to analyse the data and provided the findings based on frequency analysis and descriptive analysis. DISCUSSION OF FINDINGS The exploratory factor analysis using component matrix with varimax rotation was also conducted. Sample size of 300 is quite adequate for performing factor analysis. In order to verify the appropriateness of factorability of the data; KMO and Bartletts test was conducted. Sampling adequacy value above 0.6 is considered to be acceptable, and if it is close to 1.0 it is considered more appropriate. So a value of .756 is definitely quite good indication of data factorability.The table 2 explains the KMO and Barteltts test findings. Table 2: Factor analysis Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Approx. Chi-Square Bartlett's Test of Sphericity df P .756 14644.661 690 .000

Table 3 shows that loading of each statement on its components is more than 0.5, which is good indication of loading. Factor analysis also helps to evaluate the construct validity of the instrument. From the results of factor analysis, it can be concluded that our instrument has good construct validity. Cronbach Alpha was calculated to find verify the reliability. An overall score of .82 indicated the reliability of the instrument used in the study. Table 3: Exploratory factor

ANALYSIS Statements Factor 1 Brand Awareness 1. Top of the Mind Awareness Perceived Quality .720 Factor Loadings Factor 2 Factor 3

1 2 3 4 5 6 7 8 9

Timeliness Safety and Comfort Ticket Rates Customer service efficiency Nationwide area coverage In-Transit service Services at terminal Brand Image Cargo Service Terminal Location Brand Loyalty

.574 .596 .623 .654 .626 .637 .574 .631 .558 .686

1 2 3 4

First Choice Readiness to pay Premium Price Switching Intention Recommendation to others

.651 .709 .689 .745

Demographic factors The demographic characteristic of respondents shows in table 4. The demographic characteristics of respondents consists of gender, age, educational level, monthly income and frequency of travelling, Table 4: Demographic factors Characteristics Gender Male Female Total Education Level Illiterate Under Matric Intermediate Graduation Post Graduation Monthly Income Less than 10,000 10,000-20,000
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n 180 120 300 30 45 51 102 72

% 60 40 100 10 15 17 34 24

46 55

15.3 18.3

21,000-40,000 41,000-60,000 60,000 Plus Frequency of Travel Daily Weekly Monthly After 3 months After 6 months Annually Total Customer Age 16-30 31-45 46-60 60 plus Total Brand awareness

157 27 15 3 43 120 83 35 16 300

52.3 9 5 1 14.3 40 27.6 11.6 5.3 100

150 120 24 6 300

50 40 8 2 100

Table 5 shows that because of reliable service, nationwide coverage and effective promotion Daewoo service enjoy higher level of brand awareness as compared to competitors. Table 5: Brand awareness Service Daewoo Faisal Movers Skyways Niazi Express Others Brand loyalty Table 6 signifies the superiority of Daewoo bus service over its rivals in terms of high willingness of respondents to pay premium price, use the service as first choice. Recommending the service to their reference groups and reduced intention to switch to any other service. Table 6: Brand loyalty Recommendation to others 57% 21% 7% 6% 9%
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Top of mind awareness 71% 11% 6% 4% 8%

Daewoo Faisal Movers Skyways Niazi Express Others

First Choice 65% 20% 8% 4% 3%

Premium Price 75% 35% 20% 10% 5%

Switching Intention 15% 25% 30% 28% 2%

Age * Switching Intention (Crosstabulation) It is obvious from table 7 that as the age increases the intention to switch decreases. Switching is more common among the young respondents. Table 7: Age * Switching Intention (Crosstabulation) Age 16-30 31-45 46-60 >60 Loyalty 99 66% 90 75% 19 79% 5 83% Switching Intention 51 34% 30 30% 5 21% 1 17% Total 150 100.0% 120 100.0% 24 100.0% 6 100.0%

Frequency of Travel * Willingness to pay Premium Price (Crosstabulation) A look at table 8 signifies that those respondents who travel quite frequently are more reluctant to pay premium prices as compared to those who travel less frequently.

Table 8 :Frequency of Travel * Willingness to pay Premium Price (Crosstabulation) Frequency of Travel Daily Weekly Monthly After 3 Months After 6 Months Annualy Willingness to pay Premium Price No Yes 3 0 100 0% 30 13 69.8% 30.2% 72 48 60% 40% 44 39 53% 47% 15 20 42.8% 57.2% 4 12 25% 75% Total 3 100.0% 43 100.0% 120 100.0% 83 100.0% 35 100% 16 100%

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Income* First Choice (Crosstabulation) Table 9 shows that the customers belonging to higher income class prefer to travel by Daewoo followed by faisal movers, whereas those belonging to lower income class prefer other bus services that offer lesser fares. Table 9: Income* First Choice (Crosstabulation) First Choice Monthly Income Daewoo 5 <10000 10.8% 27 49.1% 129 46.8% 22 81.5% 12 >60000 80% 20% 0% 0% 0% 100.0% 23.9% 21 38.2% 22 22.6% 3 11% 3 28.2% 5 9.1% 4 20.6% 2 7.5% 0 21.7% 1 1.8% 1 1.8% 0 0% 0 15.3% 1 1.8% 1 1.8% 0 0% 0 100.0% 55 100.0% 157 100.0% 27 100.0% 15 Total Faisal Movers 11 Skyways 13 Niazi Express 10 Others 7 46

1000020000

2100040000

4100060000

Perceived Quality An analysis of table 10 demonstrates that Daewoo service is perceived as quite superior with reference to a number of significant determinants of perceived quality. In terms of perceived quality Daewoo is followed by faisal movers.

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Table 10: Perceived quality Ticket Rates Daewoo Faisal Movers Skyways Niazi Express Others 36% 33% 14% 10% 7% Safety and Comfort 81% 13% 2% 2% 2% Area Coverage 64% 18% 1% 16% 1% Timelines s 90% 6% 2% 1% 1% In-Transit Service 85% 12% 0% 0% 3% Brand Image 91% 9% 0% 0% 0% Cargo Service 75% 12% 5% 3% 5% Terminal Location 61% 12% 11% 13% 3% Customer Services Efficiency 80% 10% 5% 4% 1% Customer Services at Terminal 80% 10% 4% 3% 3%

Daewoo Faisal Movers Skyways Niazi Express Others

Respondents Rating of Perceived Quality Factors Table 11 shows the importance of various determinants of perceived quality as the respondents have ranked them on a scale of 1-10 where 10 refers to most important and 1 refers to least important. Table 11: Respondents Rating of Perceived Quality Factors Determinants Timeliness Safety and Comfort Ticket Rates In-Transit Service Area Coverage Brand Image Customer Services Efficiency Customer Services at Terminal Terminal Location Cargo Services Mean 7.62 7.31 6.34 6.23 4.94 5.65 3.23 3.44 3.14 3.63 Std. Deviation 3.090 3.056 3.078 2.855 2.915 3.158 2.642 2.754 2.539 2.857 N 300 300 300 300 300 300 300 300 300 300

According to respondents timeliness, safety and comfort level, ticket rates, in-transit service and nationwide coverage are most import determinants of service with

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reference to travelling service. Moreover it has also been found that customers do think in terms of brand image and thus they prefer the well reputed services.

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Figure 3: Model of brand equity for travelling services

Top of the mind Awareness Services at Terminal Ticket Rates Area Coverage In Transit Service Terminal Locations Timeliness Safety Customer Services Brand Image Cargo Service First Choice Repurchase Behavior Premium Price Switching Intention Recommendation

Brand Awareness

Perceived Quality

Customer Choice

Brand Loyalty

CONCLUSION This study provides valuable information about awareness of brand equity on customer choice. This research indicates that Brand awareness and familiarity, Perception of service quality and the extent to which the customers are loyal to a particular brand do have a significant impact on customers choice or purchase decision. Thus all of the proposed hypotheses are accepted. In the light of this research study there are a number of policy implications for travel and tourism related services. Most important point to notice is that higher perceptions of quality must be positioned in the minds of existing and potential customers in order to make them loyal, once customer loyalty is established it would results in benefits that are multifaceted. Loyal customers create positive word of mouth and serve as opinion leader thus they ensure positive future cash flows. Limitations and Future Research Recommendations: In future the researchers can conduct similar students in different sectors using a larger data sample. Convenience sampling is a limitation of this study, in future random samples can be used for generalisation of results.

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