A Refereed Monthly International Journal of Management
An Empirical Study on The Brand Equity of State Bank of India using Aaker Model
Author
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Dr. Ranjana Tiwari
Assistant Professor, Bachelor in Management
Studies – Tourism & Hospitality Management
Jain (Deemed to be University)
|
Mr. Amarpreet Singh
Student, Bachelor in Management
Studies –International Business
Jain University
|
Abstract
Purpose:
This research paper aimed to investigate the relationship between brand equity components and the customer satisfaction level. This paper also tried to understand the brand equity of the State Bank of India and the factors which affect the State Bank of India's brand equity.
Design:
An expansive review of literature was done which created the framework of the research. The Aaker model (Aaker, 1991), a pre tested method was used to perform the research. A total of 160 respondents within Bangalore, India were asked to fill in the questionnaire. To determine significant difference between gender of respondent and customer satisfaction level, one sample t test was used by the researchers, whilst Multiple Regression Analysis was used to determine relationships between brand equity components and customer satisfaction.
Findings:
The study showed that overall; the State Bank of India had a positive brand image. Respondents were majorly agreeing with the statements provided in the survey. This was followed by a majority of people with no opinion on the questions asked. In the end over half of the respondents were satisfied with the bank, but, had complaints such as ATM's having shortage of cash and employee attitude towards customers, being the most common.
Implications:
This study shows that the State Bank of India is going on a positive path in terms of their marketing efforts. However to improve, SBI can take heed to improving the customer facing employees and their ATMS. This research lays down a foundation for future research being conducted into the same field, as well as shows a realistic situation of how SBI's brand image is perceived by the public.
JEL Classification
– Marketing, Intangible Assets, Advertising, Brand, Brand Loyalty, Brand Preference, Brand Image
Keywords: Brand equity, State Bank of India, Aaker Model, Brand image, Brand Loyalty, Brand Preference
Introduction
The State Bank of India along with its Public sector counterparts has been facing competition from private sector banks since private banks were allowed in 1990 by the Reserve Bank of India. Since that time ICICI Bank and HDFC Bank have gone on to become the two largest
private banks in India (Aranca & IBEF, 2018). Since then,
the banking industry has adapted to many global changes.
Such changes included the introduction of debit cards and
net banking along with mobile banking. Along with that the
rise of credit card use amongst consumers. The State Bank
of India has one the largest base of account holders in India
with 22Percent of the market share in the banking industry.
Recently, on April 1, 2017, five associate banks of SBI, viz.
State Bank of Bikaner & Jaipur, State Bank of Hyderabad,
State Bank of Mysore, State Bank of Patiala and State Bank
of Travancore, merged with SBI laterally with the
Bharatiya Mahila Bank. With the merger, SBI is touted as
one of the fifty largest banks in the world. With the State
Bank of India previously claiming to be the banker to every
Indian, it is necessary to see the recent condition of the
brand and the brand equity of State Bank of India after
merger.
Further, brand equity can be defined as the effects or outcomes of marketing that accumulate to a product with
its brand name compared with those that would accumulateif the same product did not have the brand name (Aaker,
1991). Aaker, further described brand equity Brand equity
is an amalgam of assets and liabilities which are directly or
indirectly linked to a brand, name or its symbol, further, it
also adds to or deduct from the value provided by a service
or product to the customer of the firm. Along with this
Aaker has proposed a model to measure the brand equity
value. It is called the Aaker model (Aaker D. A., 1996). The
Aaker model has five tangents viz. Brand awareness, Brand
association, Perceived Quality, Brand loyalty and other
brand related assets. Present research paper aims to
research into the brand equity of the State Bank of India as
well as find out if a relation exists between Brand equity of
a business and loyalty of the customers.
Review of Literature:
Several researches have pointed out the level of importance
of brand equity and its role in the formation of brand loyalty
or image. An-Tien Hsieh and Chung-Kai Li (2008) studies
the effect of brand image on customer loyalty and public
relations perception. The study revealed that loyalty of the
customers come after perception of consumers regarding
an organisation's PR practice. In the case of favourable
brand image, there is stronger and more significant impact
of public relations perception (PRP) on customer loyalty.
The effect of PRP on customer loyalty is negligible, if it is
unfavourable. Ike-Elechi Ogba and Zhenzhen Tan
(2009)exploredhow customer loyalty and commitment in
the Chinese mobile phone market is getting impacted by
the brand image. They concluded that the brand image is very influential to the customer behaviour and their commitment to the brand.
Ko de Ruyter and Pascal Peeters, Josee Blooemer (1998)
tried to find the factors of bank loyalty: the multifaceted
relationship among service quality, image and satisfaction.
They said that service quality has an unintended impact on
loyalty through satisfaction. Brand image has an impact on
satisfaction through service quality perception however
brand image does not have an influence on loyalty directly
or indirectly. Further they analyzed that whilst brand image
has no influence on customer loyalty, the position of the
bank has an influence on customer loyalty. Also reliability
and efficiency are also important constructs in loyalty to
the bank and to the customer satisfaction. Meri Sahramaa
(2016)studied the brand image of OP bank and Insurance
Company and consumer experience associated with it. The
researcher concluded that viewpoints of respondents on the
brand image were impacted by the advertising campaigns
and the way the media portrays the OP Group. Moreover,
the word of mouth and personal experience too influenced the brand image.
Yi Zang (2015) examined consumers' attitude and purchase
intention by studying the relationship between brand image
and brand equity. He found that the awareness of brand and
brand image are the foundation of brand equity as well as
emotional branding being a very crucial part of brand
management. The scholars, Sharareh Momeni, Shabnam
Mousavi Khesal, Nasim Roustapisheh, and Mahmood
Zohoori (2013)examined the factors influencing brand
image in banking industry of Iran. The factors,
advertisement (TV, Online and Print) and Service Quality
(Tangibles, Reliability, Responsiveness, Assurance, and
Empathy) influenced the brand image if the banking
industry. The researchers also stressed that the perceived
advertisement expenditure is linked with the perception of
the brand; therefore a good and interesting advertisement is
likely to show the bank as a good quality bank since they can spend so much on their advertisements. Muslim Amin,
Zaidi Isa, and Rodrigue Fontaine (2013) studied the factors
of level of satisfaction for trust, image and loyalty of
Muslim and non-Muslim customers of Islamic banks in
Malaysia. The said that customers of religion other than
Muslim, of Islamic Banks were more dynamic on their
image/perception of the bank with the satisfaction they
received from using the services. Muslim customers were
tolerant to dissatisfaction a bit more than the non-Muslim
customers but at the end satisfaction does play a vital role
on the image which both groups have of banks. The results
indicated that for both customer segments, significant
relationships found between customer satisfaction and
image, image and trust, and trust and customer loyalty.
The global team of scholars, Hong-Youl Ha, Joby John, SwinderJanda, and Siva Muthaly (2011) examined the
Significance of this study
Most of the established researches have used of the SERVQUAL Model (Parasuraman, Berry, & Zeithaml, 1985) or concentrated on the dimension of customer satisfaction or to determine service quality gaps in the banking industry and its players. Therefore, this research is being conducted to be instrumental to and fill the gap of the research into brand equity in India, pertaining to the Indian Banking Sector. This research will possibly lay down more of a direction for future research into the same field. Along with that, this research serves as an indicator on the effectiveness of the State Bank of India's marketing efforts. The research does consider the awareness, perception and association of SBI by the customers and this is shaped by the efforts of the bank in marketing, and so we are able to measure those factors and how positive the results are.
Objectives of the study
To understand the brand equity of the State Bank of India.
To investigate the relationship between customer perception of brand equity and customer loyalty.
Research Methodology
Study Area
The study was conducted in Bangalore city. Business parks, offices and educational institutes were chosen as the places to implement the survey alongside the branches of State Bank of India in Bangalore.
Instrument
The open and close ended, structured questionnaire was used to record the data from the respondents. The questionnaire divided into three parts. The first recorded
the demographic and usage data. The second part had the question related to the components of Aaker's Brand equity model. The third part of the questionnaire asked questions
related to the customer's satisfaction with SBI as well as any changes, the customer would like to have happen in SBI. The answer were recorded in Likert scale ranging from 1 being strongly disagree to 5 being strongly agree.
Data Sources
The research study used primary and secondary data. The primary data was collected through structured questionnaire. The sources for secondary data were
journals, official website of SBI, and official websites of online news agencies.
Data Collection
The data was collected to through close and open ended, structured questionnaire. The convenient sampling methodwas used to collect the data from the sample.
Statistical Tools and Techniques
To analyze the collected data, various statistical techniques
and tools such as averages, frequency distribution tables,
and normal distribution were used. The study also uses other suitable statistical tools such as mean, median, standard deviation with co-efficient of variation,
correlation and regression, factor analysis etc. IBM SPSS
20 software package was used to carry out the various tests
Hypothesis Formulation
H01: There is no significant relationship between Brand Awareness of SBI and the customer satisfaction
·H02: There is no significant relationship between Brand
Association of SBI and the customer satisfaction.
H03: There is no significant relationship between
Perceived Quality of SBI and the customer satisfaction.
H04: There is no significant relationship between Brand Loyalty of SBI and the customer satisfaction
H05: There is no significant relationship customer
perception of brand equity and customer loyalty.
Analysis and Interpretation
According to Table 1, Majority of the respondents were
between the ages of 15-25 followed by the age range of 26-
35.The majority of respondents were Males with 71.88
percent and women accounted for 28.12 percent. Exactly
half of the respondents (80) were students followed by
working professionals, then business owners, retired
persons and freelancers. There were no unemployed
persons. Working professionals included shop employees,
government staff, MNC employees as well as education
institute employees.Almost all of respondents had bank
accounts with the State Bank of India. Credit card usage
was done by 22 respondents. Deposits were more popular
with 28 respondents having a deposit with SBI. Loans only
were with 3 respondents. The graph does not show
respondents who had selected multiple options. Out of the 160 respondents, 34 were using more than one product of
SBI. Almost equal representation is there from customers
who have been associated with SBI from 0-2 years and 3-5
years. Therefore majority of the customers have had chosen
the State Bank of India in this decade. Many of the
customers who have been associated with the State Bank of
India for more than 9years were senior citizens as well as
pension owners. Another thing to be noted with some of the
respondents who have been banking with the State Bank of
India for more than 9 years, have done it as their pension
comes through SBI only or they have a corporate account
with SBI. Over half of the respondents, answered yes to this
account being their main account of usage. Along with that,
48 of the respondents did not have their SBI account as their
main account, which means they do business with more
than one bank. 9 People did not have an account with SBI,
and were using other products of SBI.
Testing of Hypothesis
H01: There is no significant relationship between Brand
Awareness of SBI and the customer satisfaction
a. Depenent variable:How Satisfied are you with SBI's products and Serviess
Keeping Table 2 and 3 in the view, we can say that since the significance level is less than 0.05 (p=0.000), we reject null
hypothesis and accept alternative hypothesis which says
that there is a significant association between brand
awareness and customer satisfaction. The Adjusted R Square value is 0.240. This means that the two above statements can account for the 24% of the variability. The R
value (Multiple Correlation Coefficient) is 0.514 at
constant.The first, third and fourth sub variables of the
brand awareness variable are more significantly associated
with customer satisfaction than the second sub variable.
H02: There is no significant relationship between Brand Association of SBI and the customer satisfaction
According to Table No. 4 and 5, the significance level is less than 0.05 (p=0.000), therefore, we reject null
hypothesis and accept alternative hypothesis which says
there is a significant association between brand association
and customer satisfaction. The Adjusted R Square value is 0.343. This means that the two above statements can account for the 34.3Percent of the variability. The R value (Multiple Correlation Coefficient) is 0.603 at constant
According to Table 6, the first, third and fourth sub variables of the brand association variable are
insignificantly associated with customer satisfaction whilst
the second sub variable,
H03: There is no significant relationship between Perceived Quality of SBI and the customer satisfaction.
According to Table No. 7 and 8, the significance level is
less than 0.05 (p=0.000), hence, we reject null hypothesis and accept alternative hypothesis is at 0.000, this is well below the 0.05 criteria. This means that there is a significant association between the perceived quality and brand awareness and customer satisfaction. The Adjusted
R Square value is 0.358. This means that the two above
atements can account for the 35.8Percent of the variability. The R value (Multiple Correlation Coefficient)
is 0.623 at constant.
According to Table No. 9, the first, third and sixth sub variables of perceived quality variable are more significantly associated with customer satisfaction than the other sub variables.
H04: There is no significant relationship between Brand Loyalty of SBI and the customer satisfaction
According to Table No. 10 and 11, the significance level is
less than 0.05 (p=0.000), therefore, we reject null
hypothesis and accept alternative hypothesis is at 0.000,
this says that there is a significant association between
brand loyalty and customer satisfaction. The Adjusted R
Square value is 0.437. This means that the variable can
account for the 43.7Percent of the variability in data.
According to Table No. 12, the second and third stub variables are the most significant to the overall relationship
whilst the first and fourth sub variables have an
insignificant relationship with customer satisfaction. This
association is supported also by the R value (Multiple
Correlation Coefficient). The value is 0.675, which shows a
positive relationship with customer satisfaction for Brand
Loyalty.
H05: There is no significant relationship customer
perception of brand equity and customer loyalty.
According to Table No. 13 and 14, the significance level is
less than 0.05 (p=0.000), henceforth, we reject null
hypothesis and accept alternative hypothesis and accept
alternate hypothesis which says there is a significant
relationship between customer perception of brand equity
and customer satisfaction. The Adjusted R Square value is
0.379. This means that the two above statements can
account for the 37.9Percent of the variability. The R value
(Multiple Correlation Coefficient) is 0.624 at constant.
Findings
As per the survey, the key components of the State Bank of India's brand equity were brand awareness, brand
association, perceived quality, brand loyalty and overall
brand equity. Respondents between the age15-25 were the
largest majority at 58.75Percent followed by 26-35 and
then respondents above the age of 45. The study revealed
that the bank accounts were the most used product of SBI
amongst the respondents. Only 34 respondents were using
more than one product of SBI. It was also found that within
the last 5 years, 67Percent of the respondents had
associated themselves with the State Bank of India.
Further, a hundred and three people had their account in
SBI as their main/primary account. Close to half of the
respondents also agreed that the advertisements of SBI are
plenty. Moreover, majority of the respondents agreed that
SBI is the first bank they think of when banking. The major
part of the respondents agreed with SBI's former tagline,
SBI, the Banker to Every Indian had greater impact on the
customer. Close to half of the respondents agreed with the
statement, that SBI provides good customer service. This
was followed with over 20Percent disagreeing with the
statement.
The majority of the respondents also believed that the bank and its employees treated all customers fairly and equally. Exactly half of the respondents believed that the State Bank of India was one of the leaders in the banking industry. Further, in the positive connection to the review of literature, respondents agreed that the employees of SBI (public sector employees) are knowledgeable about the products and services they provide. Majority of the respondents agreed that the infrastructure of the branches is maintained and the employees are willing to help to the customers all the time. Over 75Percent of the respondents vouched in the agreement that that their money is safe with SBI. Further, the majority of the respondents agreed to continue to hold an account with SBI in the future, whilst close to half, would consider using other products of SBI. The respondents were agreed to recommend the bank to first time customers as well as almost half would talk about the bank to others. Over half of the respondents believe that the bank provides value for money in terms of services as
well as that they can trust the bank in times of need.
Moreover, majority of the respondents were satisfied with
SBI but over half of the respondents would like to change
something in SBI. Significant relationships were also
proved between all the brand equity components and
customer satisfaction, independently. Further, the study
also revealed that the all components of brand equity of SBI
(Brand Awareness, Brand Associations, Perceived Quality,
and Brand Loyalty) has the significant association with the
customer satisfaction. However, Brand Association plays an imperative part in the formation of brand equity of SBI.
Conclusion
The research into branding and its effects on businesses in
India is still quite less but it is slowly increasing. This is
especially true for the service industry and consumer goods
industry, where branding is more prevalent. The banking
sector still has a long way forward to go in terms of research
into their branding efforts and its outcomes. Majority of the
research into the banking sector of India is primarily
focused on the Service quality and uses mainly the
SERVQUAL Model (Parasuraman, Berry, & Zeithaml,
1985).This research paper aimed to find out the
Association of brand equity of SBI and satisfaction levels
of its customers. State Bank of India was chosen as it has
the largest market share at 22Percent (The Hindu, 2017)
and is one of the leading public sector banks. With one
hundred and sixty respondents chosen randomly and
conveniently, the analysis showed that brand equity does
exist and that too positive for the State Bank of India. Most
respondents had a positive response to the variables
provided in the survey instrument. This can be considered
as the marketing efforts of SBI being effective in reaping a
positive image for the bank amongst the public and effectively achieving their marketing objectives. The study shows that the Brand Awareness component of the Brand equity model has a slightly weaker relationship to the customer satisfaction levels of the customers compared to the relationships of other brand equity components and their relationships with the customer satisfaction levels. Therefore, it is recommended to State Bank of India, to focus on that aspect and primarily to the working population and the student customer segment as our research found most of the respondents are below the age of 35.Overall, the branding outcome for the State Bank of India is positive and effective. The way the State Bank of India is associated is not negative. However, the State Bank of India can work on improving the reach of its advertisements as well as customer service.
Limitations of the study image through promotional campaign: an exploratory study on select banks in India. Pacific Following are the limitations of the study:
Lack of previously established research on brand equity in the Indian Banking Industry, makes very difficult to find a direction with ease.
Unequal representation of both genders. Men and
women are represented approximately at 70-30 percentage respectively.
Denial of access to customers within multiple State
Bank of India branches.
Survey Instrument only available in one language. It
did not allow tapping into more of the region's native
population.
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