IMPACT OF BRAND PRICE AND BRAND QUALITY ON

BRAND LOYALTY WITH MEDIATING EFFECT OF

COUSTOMER SATISFICATION: A STUDY OF SAMSUNG
MOBILE PHONE PAKISTAN

Submitted by
M.Ajmal khan
Masood Ahmed

Submitted To
Ma’am Sobia Raja

Date of Submission
30/April/2019

Abasyn University Islamabad Campus

Park road Chak ShahzadIslamabad
Contents
Introduction ................................................................................................................................................... 1
Problem statement......................................................................................................................................... 1
Purpose of Research...................................................................................................................................... 2
Research Questions ....................................................................................................................................... 2
Conceptual frame work ................................................................................................................................. 2
Hypothesis .................................................................................................................................................... 2
Literature review ........................................................................................................................................... 3
Questionnaires .............................................................................................................................................. 2
Brand loyalty ................................................................................................................................................. 2
Customer satisfaction ................................................................................................................................... 2
Brand Quality ................................................................................................................................................ 2
Brand price .................................................................................................................................................... 3
Questionnaire ............................................................................................................................................... 4
References .................................................................................................................................................... 5
 1

Introduction
Over the last few decades, the mobile phone industry is growing very fast every firm is trying to
capture a more competitive advantage. In this situation, firms are improving their product image,
customer satisfaction, brand trust. In the market, the customer is very sharp to buy the product.
The mobile phone is now changed from handset to smartphones now the competition is very
hard to satisfy the customer.
Samsung which founded by Lee Byung-Chul in 1938 is a worldwide telecommunication
manufacture in South Korea. As the ICT technology growing up, Samsung that was trading
company exporting various product developed in to a multinational company. Samsung was
separated into four group in 1987 and it has increasingly globalized since 1990. Since then its
activities that is in electronics especially in mobile phones and gadgets become the main business
of Samsung (Samsung, 2015).

Pakistan mobile phone industry is growing very fast now customer have more choices to
purchase low cost or high cost mobile according to their financial situations. There are many
brands exists in Pakistan market all the famous brand is daily selling and purchasing like,
iPhone, Qmobile, Samsung, Hawaii, HTC etc. There are a few published studies on the factors
affecting directly to brand loyalty but we taking customer satisfaction as mediating effect with
brand loyalty.

Problem statement

Every Mobile brand want to maintain the relationship with their customer in the long-term, to
increase their sales to gain maximum profit. Brand loyal customer is the positive point for every
brand. According to Singh (2016) Brand loyalty is nothing but the provision satisfaction to
consumers. This satisfaction derives from belief trust and on a particular brand where availability
of other brands and services is available (Singh, 2016).
Previous researches identify the factor that impact on brand loyalty is some of the Brand image,
trust. Their research future direction identify some factors that may impact brand loyalty there
are more factors like, quality and price that can take an independent variable to determine the
brand loyalty (Muhammad Ramiz et al 2014)

Samsung is losing mobile ground to its Chinese rivals. Chinese rival made the copies of new
model and sell them in the market at very low cost this is a major problem for Samsung because
Samsung mobile price is high in Pakistan as well as their spare parts are coming in Chinese copy
and costumer can’t buy original parts their prices high. Customer is moving to the new brands
because new brand giving average specification in their mobiles now customer purchasing their
mobiles this is a major problem for Samsung handles their costumer in long-term.
 2

Purpose of Research
The purpose of our research is:
 To explore the affect of brand quality and brand price on brand loyalty with mediating
effect of customer satisfaction.

Research Questions
How brand quality influences brand loyalty with mediating effect of customer satisfaction?
What is the effect of brand price on brand loyalty with mediating effect of customer
satisfaction?

Conceptual frame work

Hypothesis

H1: Brand Quality has significant positive relationship on Brand Loyalty.

H2: Brand Price has significant positive relationship on Brand Loyalty.

H3: Brand quality has significant relationship on brand Loyalty with mediating effect of
customer satisfaction

H4: Brand Price has significant relationship on brand Loyalty with mediating effect of customer
satisfaction
 3

Literature review

Brand loyalty
Brand loyalty is the main subject of interest for marketing researchers. The previous research
on brand loyalty shows that spending expenses of loyal buyers are higher than non-loyal
buyers. So, brand loyal customers are considered to be a company`s most valuable group
(Ganesh,2000). Customer loyalty can be interpreted as customer’s commitment to repurchase
the products and services offered by a company or a special brand and suggesting those
services or products to one’s friends or colleagues (Chi, Huery, &Ya, 2009).
The most important advantages of brand loyalty are sales and gaining more profits, declined
sensitivity of customers towards marketing challenges of sensitivity towards price changes
than non-loyal customers (Shahin, Zehir, &Kitap, 2011).competitors, and creating a positive
mental image. Similarly, loyal customers are the company’s assets and the major index of
brand equity. They will have less
In this decades Aaker (1991) has communicated the role of loyalty in the brand equity
process and has specifically renowned that brand loyalty leads to positive marketing
advantages like reduced, marketing costs, more new customers, and greater trade leverage.

Customer Satisfaction:
Customer satisfaction has a strong relationship with brand loyalty furthermore researcher
claim that customer satisfaction could not be clearly understood without loyalty. After
evaluation of different factors including brand loyalty many researchers found a positive
relationship between customer satisfaction and brand loyalty (Li &Chaipoopirutana, 2014).
In most of the literature, satisfaction was integrated as a dominant factor which leads to brand
loyalty. They also explore that purchase decision of loyal customers become a habit in
nature. Many scholars believe that customer satisfaction is one of the essential elements
which affects brand loyalty. It is found that customer satisfaction improves reputation in
services markets and reputation intervene the relationship of customer satisfaction and brand
loyalty. (Muhammad Tabish et all 2017). According to researcher retaining, existing
customers is easier than gaining new customers (Farhanullah&Adeeba, 2013). The customer
evaluation of satisfaction is the comparison between the expected performances with the
actual performance (Shukla, 2004). According to (e.g. Ismail, Hasnah, Ibrahim, & Isa, 2006;
Da Silva & Syed Alwi , 2006; Anderson & Sullivan, 1993; Chiou et al., 2002; Bloemer&
Ruyter, 1998: Yang & Peterson, 2004)several studies confirmed that consumer's satisfaction
has positivelypartial loyalty. When customers are happy and satisfy from branded products
then they also tell others to purchase them. The loyalty to the brand and positive attitude is
determined by the satisfied customers. Moreover, it enforces the loyal customer for
repurchase of product again and again (Youl& John, 2010).
 4

Quality

The positive perception of product quality is linked to customer’s preference, satisfaction and
their purchase choices (Parasuraman, Zeithaml, & Berry, 1994). Both utilitarian and hedonic
product features can provide positive experience for users. Mobile software’s such as
downloadable applications, operating systems and many other features have turned the mobile
devices into a user-friendly platform for customers to use as a personal computer (Corral, 2012).
These improved software features which have increased the user utilitarian needs of customers
are assumed to lead consumers to higher satisfaction, positive experience and loyalty (Penget al.,
2014). Customer satisfaction refers to customers’ expectation of a provided service or the overall
evaluation of customers based on their experiences (Gerpott, Rams, & Schindler, 2001) which
affects their postpurchasebehaviour (Netemeyer et al., 2004).
Producers have always struggled to produce high quality products in order to create good
perception and experience among their consumers in order to compete with their competitors
(Kemp, 2005; KyoonYoo& Ah Park, 2007; Raj & Roy, 2015) while maintaining good
reputations among the existing customers, as the cost of retaining the existing customers can be
less costly than the cost of acquiring new customers. Zeithaml (1988) defined quality as an actual
superiority of product/services, whereas perceived product quality signifies the intangible and
tangible perception of consumers towards a product and service. Perceived product quality is
considered a prerequisite to consumer behavioral intention in both goods and services markets.
The importance of quality is emphasized by many researchers as, ‘firms compete on quality,
customers search for quality, and markets are transformed by quality’ (Golder, Mitra, &
Moorman, 2012, p. 1).

Quality and customer satisfaction are key features in various product settings, including
smartphone devices. For instance, Sony’s continuous promoting and crucial efforts are focused
on their commitment in respecting customer’s viewpoints to ensure high quality products that
satisfy customer’s expectations (Schiffman et al., 2013). In total, perceived product quality has
been regarded as one of the crucial antecedents of satisfaction (Baker & Crompton, 2000;
Cronin, Brady, &Hult, 2000).
Quality of service is a focused assessment of services elements such as interaction quality,
physical environment quality and outcome quality (Zehir et al, 2011). In addition, it is a sort of
judgment which customers resulting from an investigation process where customers compare
their expectations with the service they perceive to have received (Gronroos, 1984). So this
difference between expectations and perceptions of customers and their perceptions of actual
performance of services will create quality of services (Zeithaml et al, 1996), so that if a service
meets or exceeds customer expectations, it has quality, but If customer service is less than their
expectations, it necessarily does not mean that quality of service is low; however, it makes the
customer dissatisfied (Venus &Safaeiyan, 2002).
Therefore, organizations are looking for sustainable and high quality in order that they can Gain
a competitive advantage.
 5

Price
According to Kotler and Keller (2016), price is the monetary value of a product or service.
According to Dhurup et al. (2014), price significantly effects brand loyalty. Consumers that
are aware of the price of a product will measure the quality of the products they purchase in
relation to the amount of money that is sacrificed for the purchase. Therefore, it can be said
that consumers are willing to pay a higher price in order to obtain a better-quality product. A
higher quality of product will influence brand loyalty.
According to Samuelson (Samuelson, 2009), the price is a factor that is determined by the
interaction betweendemand and supply in the factors of production. Price is also the
amount of money that is used as a tool of exchangeto obtain a product or service.

According to Armstrong et al (Amstrong, 2012) pricing decisions are depend on a series

of environmental forcesand competition that are very complicated. The company not only
set a single price, but setting in the form of astructure pricing structure that includes
different items in each product line. The items that can be used for measuringthe price are
Fair Price, Fix Price, Reliable Price and Relative Price.
In a narrow sense, the price (price) is the amount paid to obtain a product of both goods and
services. More broadly, the price is the sum of the values provided by the customer which
consists of various components to benefit from owning or using a product either goods or
services. According to Kotler and Armstrong (2001: 14) is the price is the amount of money
being exchanged for products or services. According to Engel and Nursida (2003: 45) defines
the price as a sum of money (plus a few products) needed to get some kombinas of products
and services.
According to Hasan (2008: 298) price is the monetary cost of all forms are sacrificed by
consumers to acquire, own, use a combination of items along with the service of a product.
Prices concerned with the determination of the selling price according to the quality of the
goods and be accessible by consumers (Mursid, 2003: 26) From some of the experts can be
concluded that prices are all values which have to be sacrificed by the consumer in order to
obtain a good or service.Past research suggests that prices have a significant influence on
purchasing decisions. This is proven through researchDennySaputra and Sari Listyorini
(2014), RizkyAnandia (2015).
 2

Questionnaires
Brand loyalty
The questionnaires were adopted from the previous research of Dick &Bastu (1994) to measure the
dimensions in customer loyalty. The seven-point liker scale measurement is taken from Serkan
&Gökhan (2005). There are four questionnaires measured under brand loyalty.
 I have favorable attitudes towards Samsung mobiles.
 I recommend Samsung phone towards my friends and family.
 Samsung is my first choice among smart phone.
 I consider loyal towards Samsung phones.

Customer satisfaction
The measurement of customer satisfaction has been adopted from (Chi and Qu,2008; Faullant et
al., 2008). A seven-point liker scale is used ranging from 'strongly disagree` to 'strong agree'.
The overall satisfaction level, brand performance, consumer expectation is the main area of this
part. It covers five questionnaires.

 My expectation regarding Samsung performance is high

 I am satisfied using Samsung mobile experiences
 Overall Samsung meets my need and I am satisfied
 I am satisfied with the hardware and operational functionality of Samsung phones
 I am satisfied with the service provision of Samsung mobiles

Brand Quality
The brand quality is measured from the seven-point liker scale measurement that are adopted
from (Aaker,1991). These questionnaires were included to capture quality for the influence of
the brand to its customers. There are four questionnaires measured under brand quality.
 Samsung offers very durable products
 Samsung products are reliable
 Samsung offers products with excellent features
 Samsung offers phones with good quality.
 3

Brand price
The brand Price is measured from the seven-point liker scale measurement that are adopted from
(NushratShabrin et al2017). These questionnaires were included to capture price for the influence
of the brand to its customers. There are five questionnaires measured under brand price.

 I prefer purchasing a smartphone for a high price.

 I prefer buying a smartphone for a reduced price.
 I think smartphones are expensive.
 I think the price is a vital element in judging the quality of a smartphone.
 I consider the price mainly when I decide to buy a smartphone.
 4

Questionnaire
Assessment Scale: 1 = Strongly disagree, 2 = Disagree, 3 = partially disagree, 4 =neither
disagree nor agree, 5 = partially agree, 6= agree, 7=strongly agree (Please tick “√” on the most
appropriate box)
Categories 1 2 3 4 5 6 7
Brand loyalty

I have favorable attitudes towards Samsung mobiles.

I recommend Samsung phone towards my friends and family
Samsung is my first choice among smart phones
I consider loyal towards Samsung phones
Customer satisfaction

My expectations regarding Samsung performance are high

I am satisfied using Samsung mobile experiences
Overall Samsung meets my need and I am satisfied
I am satisfied with the hardware and operational functionality
of Samsung phones
I am satisfied with the service provision of Samsung mobiles
Brand Quality

Samsung offers very durable products

Samsung products are reliable
Samsung offers products with excellent features
Samsung offers phones with good quality
Brand Price

I prefer purchasing a smartphone for a high price

I prefer buying a smartphone for a reduced price
I think smartphones are expensive
I think the price is a vital element in judging the quality of a
smartphone
I consider the price mainly when I decide to buy a smartphone
 5

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