CUSTOMER-BASED BRAND EQUITY EVALUATION OF ONLINE-RETAILER IN RUSSIAN E-GROCERY MARKET
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Аннотация
INTRODUCTION 6
CHAPTER 1. THEORETICAL BASIS OF BRAND EQUITY 8
1.1 Brand equity definition 8
1.2 Models of brand equity 10
1.2.1 Keller's model 10
1.2.2 Aaker's model 13
1.2.3 Other models 14
1.3 Online retail brand equity 15
CHAPTER 2: GROCERIES ONLINE RETAIL IN RUSSIA 17
2.1 Groceries online retail market overview 17
2.1.1 Features of consumer behavior 17
2.1.2 Main competitors 18
2.3 Peculiarities of the online retail brand "Yandex.Lavka" 22
CHAPTER 3: EVALUATION OF BRAND EQUITY FOR E-GROCERY
ONLINE-RETAILER BRANDS 23
3.1. Proposed model: justification and hypothesis 23
3.1.1. Hypotheses formulation 24
3.1.2. Questionnaire design 26
3.2. Methodology 28
3.2.1. Sample description and information gathering 28
3.3. Results of the proposed model and test of hypotheses 29
3.3.1. Exploratory Factor Analysis 29
3.3.2. Confirmatory Factor Analysis 34
3.3.3. Structural Equation Modelling 37
3.3.4. Discussion of the results 39
3.4. Research limitations and managerial implications (recommendations) 39
CONCLUSION 41
REFERENCES 42
APPENDIXES 46
INTRODUCTION 6
CHAPTER 1. THEORETICAL BASIS OF BRAND EQUITY 8
1.1 Brand equity definition 8
1.2 Models of brand equity 10
1.2.1 Keller's model 10
1.2.2 Aaker's model 13
1.2.3 Other models 14
1.3 Online retail brand equity 15
CHAPTER 2: GROCERIES ONLINE RETAIL IN RUSSIA 17
2.1 Groceries online retail market overview 17
2.1.1 Features of consumer behavior 17
2.1.2 Main competitors 18
2.3 Peculiarities of the online retail brand "Yandex.Lavka" 22
CHAPTER 3: EVALUATION OF BRAND EQUITY FOR E-GROCERY
ONLINE-RETAILER BRANDS 23
3.1. Proposed model: justification and hypothesis 23
3.1.1. Hypotheses formulation 24
3.1.2. Questionnaire design 26
3.2. Methodology 28
3.2.1. Sample description and information gathering 28
3.3. Results of the proposed model and test of hypotheses 29
3.3.1. Exploratory Factor Analysis 29
3.3.2. Confirmatory Factor Analysis 34
3.3.3. Structural Equation Modelling 37
3.3.4. Discussion of the results 39
3.4. Research limitations and managerial implications (recommendations) 39
CONCLUSION 41
REFERENCES 42
APPENDIXES 46
Branding is a crucial factor that can bring the company’s performance on the higher level, so this field is highly explored by marketing researchers and such exploration continues further. One of the concepts of branding is a brand equity, which can be firm- or customer-based. Customer-based brand equity defines the added value that a company receives from building certain perceptions in consumer’s mind. In current situation of high competition rate, it is important to build a strong brand with loyal customers.
This term was observed in a huge number of articles, but there is lack of such literature on online companies’ brand equity. This research will contribute to the exploration of specifics of brand equity measurement of online retail companies. In general, the incentives for the chosen topic are the importance of brand equity measurement for the companies, the lack of literature and need for understanding the brand equity as an important part of the marketing.
The online companies’ orientation was mainly motivated by the development of electronic commerce. Even without the coronavirus the online businesses were capturing an ever-increasing volume of sales of goods and provision of services. Although recent COVID-19 pandemic made this process even faster. For example, there is a global increase in online purchases, which remains still. (Guthrie et al, 2021)
In addition, in Russia’s case, the retail brand equity is relevant due to the growing competition among players on this field. In particular, right now the online retail of daily goods or e-grocery is experiencing a huge rise that was never seen before due to the COVID-191. Although, it is a post-covid period right now and Russia isn’t imposing lockdowns, the growth continues. In February 2022, 2.5 times more orders were made than in February 2021, which indicates the ongoing development of the e-grocery market.2
The goal of the master thesis is to construct the model for measuring brand equity for online retailers of groceries in Russia.
To achieve the stated goal, the following tasks should be completed:
• Revise the existing models of customer-based brand equity to detect key aspects
• Identify the peculiarities of online retail brand equity in the context of existing models
• Overview the Russian market of e-groceries
• Create a questionnaire and conduct a survey of customers of e-groceries services in Russia
• Conduct a statistical analysis based on the data obtained to highlight the main aspects regarding existing models
• Derive a suitable model for measurement of brand equity
• Outline limitations and discussions for future research
The object of the master thesis is models for measuring customer-based brand equity. The subject of the research is customers of online retailers of groceries in Russia.
The main methods of the thesis are the following:
• Review of relevant literature to explore existing approaches and concepts, and to select and adjust an appropriate consumer capital model
• Analysis of the online retail market of groceries to identify common trends and competitors
• Conducting an online survey to collect consumer attitudes and brand associations
• Statistical analysis of the obtained data to identify the most important factors in the model, namely the factor analysis, exploratory analysis and confirmatory factor analysis
The literature review showed that there are several different articles not only about the brand equity, but also about developing new models from older ones in order to fit them into the special frameworks of various business fields. However, such models are suitable for purposes, which are not defined as the online retail of groceries focused. This should be fixed, since developing a strong brand equity is beneficial for a company in many ways. First, brand equity
There are a lot of articles describing brand equity for various businesses like hotel industry, fashion industry, e-learning, healthcare and so on. (Ray et al, 2021) Despite that, the online sector lacks research on brand equity for e-grocery companies, so the further research is vital for this exact sector. Also, even though brand equity was studied deeply by many researchers, there is no consensus on how to measure it (Tolba & Hassan, 2009), so the question of which model is better to use even in discussed fields is still open. Therefore, the research gap seems to exist in a way that there is not enough literature regarding the measurement of brand equity for online retailers of groceries specifically, while it is a valuable asset for firms. The benefits of brand equity measurement are broadened in section 1.1.
At the first glance, existing theoretical aspects seem to be relevant for the online retail brands. However, existing studies show that it is it is unclear which of the dimensions will be more applicable to such companies. Hence, the first research question can be formulated: What dimensions are suitable for measuring Customer-Based Brand Equity for e-grocery retailers?
In addition, the dimensions inside the model might influence each other in positive or negative directions, so for the full understanding of the future framework those connections should be explored. In this case, the second research question is formulated: How dimensions of a new CBBE model for e-grocery influence each other?
What is more, dimensions of the model will consist of various items. Some of them will influence those dimensions more, some less, while part of them will be even excluded from the final model. Hence, the connections between dimensions and items inside of them should be tested too. From this fact, the third research question is derived: What items inside dimensions of the new e-grocery-oriented CBBE model have the highest influence on them?
Overall, the final potential outcome of the research will be a customer-based brand equity model with dimensions significant for e-grocery specifically and a set of recommendations for online retailers of FMCG on how to measure and to improve their brand equity in a right way. Following such instructions may result in achieving stated benefits of brand equity for companies....
This term was observed in a huge number of articles, but there is lack of such literature on online companies’ brand equity. This research will contribute to the exploration of specifics of brand equity measurement of online retail companies. In general, the incentives for the chosen topic are the importance of brand equity measurement for the companies, the lack of literature and need for understanding the brand equity as an important part of the marketing.
The online companies’ orientation was mainly motivated by the development of electronic commerce. Even without the coronavirus the online businesses were capturing an ever-increasing volume of sales of goods and provision of services. Although recent COVID-19 pandemic made this process even faster. For example, there is a global increase in online purchases, which remains still. (Guthrie et al, 2021)
In addition, in Russia’s case, the retail brand equity is relevant due to the growing competition among players on this field. In particular, right now the online retail of daily goods or e-grocery is experiencing a huge rise that was never seen before due to the COVID-191. Although, it is a post-covid period right now and Russia isn’t imposing lockdowns, the growth continues. In February 2022, 2.5 times more orders were made than in February 2021, which indicates the ongoing development of the e-grocery market.2
The goal of the master thesis is to construct the model for measuring brand equity for online retailers of groceries in Russia.
To achieve the stated goal, the following tasks should be completed:
• Revise the existing models of customer-based brand equity to detect key aspects
• Identify the peculiarities of online retail brand equity in the context of existing models
• Overview the Russian market of e-groceries
• Create a questionnaire and conduct a survey of customers of e-groceries services in Russia
• Conduct a statistical analysis based on the data obtained to highlight the main aspects regarding existing models
• Derive a suitable model for measurement of brand equity
• Outline limitations and discussions for future research
The object of the master thesis is models for measuring customer-based brand equity. The subject of the research is customers of online retailers of groceries in Russia.
The main methods of the thesis are the following:
• Review of relevant literature to explore existing approaches and concepts, and to select and adjust an appropriate consumer capital model
• Analysis of the online retail market of groceries to identify common trends and competitors
• Conducting an online survey to collect consumer attitudes and brand associations
• Statistical analysis of the obtained data to identify the most important factors in the model, namely the factor analysis, exploratory analysis and confirmatory factor analysis
The literature review showed that there are several different articles not only about the brand equity, but also about developing new models from older ones in order to fit them into the special frameworks of various business fields. However, such models are suitable for purposes, which are not defined as the online retail of groceries focused. This should be fixed, since developing a strong brand equity is beneficial for a company in many ways. First, brand equity
There are a lot of articles describing brand equity for various businesses like hotel industry, fashion industry, e-learning, healthcare and so on. (Ray et al, 2021) Despite that, the online sector lacks research on brand equity for e-grocery companies, so the further research is vital for this exact sector. Also, even though brand equity was studied deeply by many researchers, there is no consensus on how to measure it (Tolba & Hassan, 2009), so the question of which model is better to use even in discussed fields is still open. Therefore, the research gap seems to exist in a way that there is not enough literature regarding the measurement of brand equity for online retailers of groceries specifically, while it is a valuable asset for firms. The benefits of brand equity measurement are broadened in section 1.1.
At the first glance, existing theoretical aspects seem to be relevant for the online retail brands. However, existing studies show that it is it is unclear which of the dimensions will be more applicable to such companies. Hence, the first research question can be formulated: What dimensions are suitable for measuring Customer-Based Brand Equity for e-grocery retailers?
In addition, the dimensions inside the model might influence each other in positive or negative directions, so for the full understanding of the future framework those connections should be explored. In this case, the second research question is formulated: How dimensions of a new CBBE model for e-grocery influence each other?
What is more, dimensions of the model will consist of various items. Some of them will influence those dimensions more, some less, while part of them will be even excluded from the final model. Hence, the connections between dimensions and items inside of them should be tested too. From this fact, the third research question is derived: What items inside dimensions of the new e-grocery-oriented CBBE model have the highest influence on them?
Overall, the final potential outcome of the research will be a customer-based brand equity model with dimensions significant for e-grocery specifically and a set of recommendations for online retailers of FMCG on how to measure and to improve their brand equity in a right way. Following such instructions may result in achieving stated benefits of brand equity for companies....
The first chapter of the research analyzed current literature on brand equity and online retailers. This helped to identify a research gap in covering the e-grocery in Russia aspect of the term. As a result, hypotheses were derived from the literature overview in order to address the existing research gap.
Market overview supporter the need of competitive advantage achievement on the field of high competition not only among e-grocery retailers, but also among online brands versus classical physical stores. The study revealed that e-grocery market grows fast for last couple of years and predictions assume that the growth will continue further. The special attention was brought to behavioral trends in exact field, since understanding such might help in coming up with ways of improving brand equity. There are certain patterns of behavior, like lack of online trust, existing due to specifics of e-retail, which should be also considered by companies.
The empirical part was focused on deriving suitable dimensions by proceeding the obtained through questionnaires data with exploratory factor analysis. During EFA some of the items were excluded, forming 4 factors that had potential to become a new framework. Next step was confirmatory factors analysis, which validated the obtained factors and excluded some more items from them. As a result, one of the factors were renamed from Brand Awareness to App Perception, since the final internal variables were not associated with the initial naming. Structural equation modelling allowed to finally validate the hypotheses and test the interconnections within four dimensions and items inside of them. Overall, 4 of 9 hypotheses were not rejected, while others were rejected or were impossible to validate due to absence of certain dimensions.
In summary, all three research questions were addressed through the study, since the end result appeared in a form of CBBE model for measuring brand equity of e-grocery retailers, as it was expected. The interconnections between dimensions and items were observed too.
The finalized customer-based brand equity model consists of 4 dimensions: Brand Loyalty, Perceived Value, Customer Service Quality and App Perception. Brand Loyalty was taken as a main dimension, on which other factors influence. The highest influence was found from App Perception, while Customer Service Quality and Perceived Value showed much less of effect.
The further research should test the results of this study on broader spectrum of e-grocery brands, overcoming the existing limitations. Other brands, focus on smaller regions or more diverse sample might show the support for obtained results or correction of them.
Market overview supporter the need of competitive advantage achievement on the field of high competition not only among e-grocery retailers, but also among online brands versus classical physical stores. The study revealed that e-grocery market grows fast for last couple of years and predictions assume that the growth will continue further. The special attention was brought to behavioral trends in exact field, since understanding such might help in coming up with ways of improving brand equity. There are certain patterns of behavior, like lack of online trust, existing due to specifics of e-retail, which should be also considered by companies.
The empirical part was focused on deriving suitable dimensions by proceeding the obtained through questionnaires data with exploratory factor analysis. During EFA some of the items were excluded, forming 4 factors that had potential to become a new framework. Next step was confirmatory factors analysis, which validated the obtained factors and excluded some more items from them. As a result, one of the factors were renamed from Brand Awareness to App Perception, since the final internal variables were not associated with the initial naming. Structural equation modelling allowed to finally validate the hypotheses and test the interconnections within four dimensions and items inside of them. Overall, 4 of 9 hypotheses were not rejected, while others were rejected or were impossible to validate due to absence of certain dimensions.
In summary, all three research questions were addressed through the study, since the end result appeared in a form of CBBE model for measuring brand equity of e-grocery retailers, as it was expected. The interconnections between dimensions and items were observed too.
The finalized customer-based brand equity model consists of 4 dimensions: Brand Loyalty, Perceived Value, Customer Service Quality and App Perception. Brand Loyalty was taken as a main dimension, on which other factors influence. The highest influence was found from App Perception, while Customer Service Quality and Perceived Value showed much less of effect.
The further research should test the results of this study on broader spectrum of e-grocery brands, overcoming the existing limitations. Other brands, focus on smaller regions or more diverse sample might show the support for obtained results or correction of them.
