Monday, January 9, 2012

Measuring customer-based restaurant brand equity

By Woo Gon Kim & Hong-Bumm Kim   |   Cornell Hotel & Restaurant Administration Quarterly  -  May, 2004

There is a growing emphasis on building and managing brand equity as the primary drivers of a restaurant chain's success. Effective brand management results from understanding and managing brand equity to produce solid operational performance. This study uncovers the underlying dimensions of brand equity and examines how they affect firms' performance in quick-service restaurant (QSR) chains. Analyses on the data collected from a survey of 394 shoppers who were intercepted to fill out a questionnaire at a shopping mall in Korea show that brand awareness, perceived quality, brand loyalty, and brand image are important dimensions of customer-based brand equity. The results invite further research. Brand awareness appeared to be the dimension that gave the greatest boost to QSR firms' performance, even though brand awareness had relatively less importance in the brand-equity construct itself. In contrast, brand loyalty, which was a large element of the construct of brand equity in QSR chains, did not exhibit a significant relationship with firms' performance.
Strong brand equity is significantly correlated with revenues for quick-service restaurants. In a study 394 respondents gauged the strength of seven quick-service restaurant brands doing business in Seoul, Korea. The study tested four elements of brand equity, namely, brand awareness, brand image, brand loyalty, and perceived quality. Of those attributes, brand awareness had the strongest direct effect on revenues, while loyalty had the least effect. Dividing the restaurants into high-performing and low-performing groups, the researchers found that customers differentiated the high-performing restaurants on several product-quality measures, including knowledgeable employees and food served on time and as ordered. Oddly, high- and low-performing restaurants were not differentiated on such other quality factors as making quick corrections to errors, experienced personnel, and cleanliness. One other contrary finding was that although brand equity comprises all four factors being tested, awareness showed the smallest effect on brand equity, far eclipsed by image, loyalty, and product quality. 

Keywords: brand equity; brand image; brand loyalty; firms' performance 

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