Journal of Air Transport Management 75 (2019) 103–110

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Journal of Air Transport Management

journal homepage: www.elsevier.com/locate/jairtraman

Market strategy development and innovation to strengthen consumer-based T

equity: The case of Brazilian airlines
Denise Santos de Oliveiraa, Mauro Caetanob,∗
a
Federal University of Goiás (UFG), University of Brasília (UnB), Research Group and Extension in Marketing and Consumer Behavior, Brazil
b
PPGADM/FACE and Transportation Engineering/FCT - Federal University of Goiás (UFG), Aeronautics Institute of Technology (ITA), MTOW, Research Group on Air
Transport Innovation Management, Brazil

A R T I C LE I N FO A B S T R A C T

Keywords: A brand valued by passengers would be able to convey quality and credibility, adds value to air transport the
Air transport service, and increases passengers' willingness to pay a premium for tickets. However, studies on consumer-based
Brand equity brand equity in the air transport sector have been scarce, especially in developing countries such as Brazil. This
Brand association study examines the relationship between marketing strategies adopted by Brazilian airlines in the domestic
Innovation management
market and the strengthening of consumer-based brand equity (particularly brand associations with brand
Perceived quality
awareness, perceived quality, and brand loyalty). A literature review and a survey of 33 managers from Brazil's
top airlines were conducted to develop the study's conceptual model. To empirically test the model, another
survey was conducted on 480 passengers at six airports in the central western, southern, and southeastern
regions of Brazil and the data analyzed via structural equation modeling. The results show that joint investments
are necessary for innovation in service, price promotion, and event sponsorship in order to strengthen the key
consumer-based brand dimensions. This study provides a basis for the development of future studies on pas-
senger-based brand equity and helps airlines target their marketing strategies with maximum effectiveness.

1. Introduction
Between the late 1990s and early 2000s, the passenger air transport
sector in several countries underwent market liberalization (Lieshout
et al., 2016; Koo and Lohmann, 2013). This reduced market entry
barriers and increased competitors (mainly low-cost airlines), leading
to a price war and impacting airline results, especially in developing
countries such as Brazil (Lieshout et al., 2016; Koo and Lohmann, 2013;
Hooper, 1997). Brazil's airlines have accumulated consecutive losses
since 2011. A negative net result on the order of USD 1.3 billion was
incurred in 2015, almost triple the negative result recorded in 2011 (of
over USD 400 million). This result was influenced by the increase in
operating costs and the sharp decline in the average tariff in the do-
mestic market. The average value paid per kilometer in the domestic
market in 2015 was 60.4% lower than the amount in 2006 (ANAC,
2016). It has thus become necessary to seek alternative measures to
help Brazilian airlines recover.
One alternative is differentiation through factors other than the
price of service, such as investments in the value passengers perceive in
the brand (Pearson et al., 2015; Chen and Tseng, 2010; Chen and
Chang, 2008). A strong brand that is valued by passengers can convey
quality and credibility, add value to the air transport service, and in-
crease passengers’ willingness to pay a premium on ticket prices
(Pearson et al., 2015). Consumer-based brand equity can be strength-
ened through successful marketing-mix strategies (Yoo et al., 2000).
However, research on how to strengthen consumer-based brand equity
has been scarce in the air transport sector (Uslu et al., 2013; Chen and
Tseng, 2010).
Uslu et al.’s (2013) study on the air transport sector indicates that
passenger perceptions of an airline brand are constructed through
brand associations combined with brand awareness, perceived quality,
and brand loyalty. Strengthening these dimensions increases passen-
gers' preference for the brand, their purchase intention, and their level
of satisfaction with the company's services (Lin, 2015; Chen and Chang,
2008). However, what marketing strategies should airlines use to
strengthen consumer-based brand equity? To answer this question, this
study examines the relationship between the marketing strategies
adopted by Brazilian airlines in the domestic market and the
strengthening three consumer-based brand equity dimensions: brand
associations with brand awareness, perceived quality, and brand loy-
alty.

∗
Corresponding author.
E-mail addresses: deniseadm@hotmail.com (D. Santos de Oliveira), caetano@ita.br (M. Caetano).

https://doi.org/10.1016/j.jairtraman.2018.12.006
Received 3 October 2017; Received in revised form 5 November 2018; Accepted 19 December 2018
Available online 26 December 2018
0969-6997/ © 2018 Elsevier Ltd. All rights reserved.
D. Santos de Oliveira, M. Caetano
2. Literature review
The value passengers perceive in an airline brand is constructed
through three dimensions: brand associations, brand awareness, per-
ceived quality, and brand loyalty (Uslu et al., 2013). Brand associations
are the connections consumers make with the brand (Feldwick, 1996),
and brand awareness refers to the ease with which consumers can recall
the brand in a given product category (Keller, 1993). Perceived quality
refers to the extent to which consumers consider a particular brand
superior to others, while brand loyalty measures the probability that
consumers will change brands (Aaker, 1991). No brand is likely to
achieve high scores in all dimensions of consumer-based brand equity,
since marketing strategies have distinct effects on each dimension
(Christodoulides and Chernatony, 2010; Veloutsou et al., 2013). Thus,
strategies must be established that affect the dimensions that generate
the best results for both the consumer and organization.
Each of the dimensions of consumer-based brand equity can offer a
distinct set of advantages to airlines. Strong associations, which gen-
erate positive feelings, tend to increase passenger satisfaction with the
services offered by the company, influence purchase decisions (Chen
and Tseng, 2010), and help the company create a basis for brand ex-
tension and establish entry barriers for competitors (Chen, 2001; Low
and Lamb, 2000). Perceptions of high quality make passengers more
willing to pay higher prices for airline tickets and generate greater
purchase intentions (Yoo and Donthu, 2001). Loyal customers have less
motivation to change brands when they are satisfied with and trust the
service offered by the company. Maintaining loyal passengers will
lower marketing costs and act as a further barrier to competitors’ entry,
as competitors will need more resources to attract these passengers
(Aaker, 1991; Ranjbariyan et al., 2012). Table 1 summarizes the po-
tential contributions of each of the dimensions of consumer-based
brand equity to airline results.
Applying successful marketing strategies is one way to increase
consumer-based brand equity. Such strategies can strengthen the link
between passengers and airlines, thus increasing retention rates and
stimulating passengers' desire to pay higher prices (Jiang and Zhang,
2016). However, for a strategy to strengthen consumers’ perceptions of
and attitudes to a brand, it must be clearly perceived by the consumers
to whom it is targeted (Yoo et al., 2000).
Several studies on products and services have sought to identify
marketing strategies that can strengthen the dimensions of consumer-
based brand equity. Namkung and Jang (2013) study casual American
restaurants and fast-food chains. They test the effect of green practices
on perceptions of value. The results indicate that environmental prac-
tices such as energy efficiency optimization, recycling, and sustainable
uses of food and organic products positively influence the strength of
the associations made by customers of both fast-food outlets and casual
Table 1
Contributions of brand equity dimensions to airlines.
Dimension Possible contributions
Brand associations/Brand awareness • -service;
Increase passenger satisfaction with
• -passenger;
Affect the purchase decision of the
• -- Create base for extension;
• competitors.
Generate barriers to entry for
Perceived quality • -- Generate
Affect the price of the ticket;
• - Increase thereasons
to purchase;
• - Increase themarket share of the brand;
• - Reduce marketing
airline's profitability.
Brand loyalty • - Increase sales volume;costs;
• - Attract new consumers;
• - Generate barriers to entry for
• competitors.
104
Journal of Air Transport Management 75 (2019) 103–110
restaurants with the brand, perceived quality levels, and intentions to
return to the restaurant.
Rajh and Došen (2009) studied university students and three dif-
ferent sectors (banking, food, and retail stores) to test how the mar-
keting-mix elements of price, advertising, and frequent price promo-
tions affect the value of the service brand. The results indicate that
service prices and publicity measures for the brand have a positive
influence on consumers’ associations and ease of recall, whereas fre-
quent price promotions negatively influence associations and ease of
recall.
So and King (2010) studied hotel guests in Australia to test the effect
of advertising and price promotion on the perceived value of the hotel
brand. Search results indicate that price promotion and radio, televi-
sion, and newspaper advertisements increase membership and ease of
hotel brand awareness. The results in Rajh and Došen (2009) suggest
that price promotion has a negative effect on guests’ perceptions.
However, So and King (2010) found that promotions had a positive
effect on the perceptions of consumers. The differences in the results
found by So and King (2010) and Rajh and Došen (2009) can be ex-
plained by considering the differences between the types of services
analyzed. According to Lovelock (1983), marketing strategies need to
be formulated depending on the classification of the specific service
type. The criteria are as follows:
• The nature of the service: a service can be directed at tangible actions
such as to people's bodies (e.g., passenger transportation, hotelier)
or goods (e.g., freight transportation, dry cleaning), or to intangible
assets (e.g., investment banking, insurance);
• The relationship the organization has with its customers: the relation-
ships between consumers and service organizations may be formal
or non-formal, discrete or continuous. Formal relationships involve
direct interactions between the consumer and the organization (e.g.,
face-to-face, email, telephone), as with a hair stylist. Non-formal
relations do not involve direct interactions between the actors, such
as for a radio station. Formal and non-formal relationships can have
discrete transactions that are fragmented, with each new service
coming with a new cost (e.g., hair styling) or have continuous
transactions, provided consistently over time (e.g., banking);
• Room for customization and judgment: the level of customization can
be high or low. Highly customized services are those adapted to the
consumer, where the consumer has greater flexibility of choice, such
as in architectural design. Services with a low level of customization
are those provided with little differentiation between consumers,
such as fast-food;
• Nature of supply and demand: fluctuations in service demand may be
high or low. Services with high fluctuation experience high or low
demand in certain periods, with an excess or deficit of consumers
(e.g., fairs). Services with low fluctuation do not experience large
fluctuations in demand over time (e.g., water supply);
• How the service is delivered: there are several methods of service
delivery: a) the consumer goes to the service organization (e.g.,
restaurant); b) the service organization comes to the consumer (e.g.,
gardening); or c) the consumer and service organization transact via
e-mail or electronic communications (i.e., Internet banking). Which
set of marketing strategies is most effective for each type of service
will depend on the service characteristics (Lovelock, 1983).
In the air transport sector, the passenger is part of the production
and provision of the service. Passengers travel to receive the service.
The interaction between the passenger and airline is direct, and sa-
tisfaction with the service may be influenced by interactions with air-
port staff, the airline, and other consumers. Finally, relationships are
experienced in a discrete, fragmented way each time a passenger travels
from one place to another. Thus, strategies successful for other types of
services, such as banking, food, and auctioneering, may not be effective
in the air transport services sector. Table 2 presents the characteristics
D. Santos de Oliveira, M. Caetano Journal of Air Transport Management 75 (2019) 103–110

that differentiate between the types of services analyzed by Makasi

Customer can transact at arm's length (telephone, Internet banking or

Consumer need not go to the service organization. The service and
et al. (2014), Namkung and Jang (2013), Rajh and Došen (2009), and
So and King (2010) and the air transport services.

Customer can transact at arm's length (telephone or Internet).

Consumer must go to the service organization (airport) The differences between the characteristics of the service sectors
examined by previous studies and those of the air transport sector limit

Customer must go to the service organization (hotel).

the applicability of prior studies' results concerning how to strengthen
passengers’ attitudes and perceptions.

3. Hypothesis development

A literature review of empirical studies conducted on several sectors

and a survey on the managers of Brazil's main airlines were carried out
products can go to customer.
How the service is delivered

to construct hypotheses on the relations between marketing strategies

adopted by airlines and the dimensions of consumer-based brand
equity. The literature review used the Scopus database and covered
1990 to 2015. Studies were selected in three phases: 1) the term “brand
equity” was identified in the title and keywords of the document,
producing 634 documents; 2) only articles published in journals were
mail)

selected, leaving 321 articles; 3) only articles that presented empirical

evidence of marketing strategies affecting the dimensions of consumer-
High fluctuation of demand
High fluctuation of demand

High fluctuation of demand

High fluctuation of demand

Low fluctuation of demand

based brand equity were selected, leaving 26 studies. The strategies

identified in the literature were as follows: advertising, social respon-
Nature of supply and

sibility measures, consumer interaction in the virtual environment,

discounts, celebrity endorsements, innovation in products or services,
non-price promotion, sponsorship of events or products, and service
customization.
demand

To verify the applicability of these strategies to the Brazilian do-

mestic market, 33 managers from the four airlines offering the greatest
number of flights in the Brazilian market (Avianca, Azul, Gol, and
Latam) were surveyed. Together, these airlines accounted for 98.5% of
Room for customization and

Brazil's domestic flights in 2015 (ANAC, 2016). Contact with these

High level of customization

High level of customization

High level of customization

Low level of customization
Low level of customization

managers (airport managers, directors and coordinators of marketing

and customer relations) was made via Facebook, LinkedIn, and email.
Participants received a link to the questionnaire, which was available
on the Survey Monkey virtual platform. Participants were given a list of
judgment

10 strategies and were invited to identify one or more of the strategies

they knew had been developed for Brazilian airlines in the domestic
market. Fig. 1 shows the strategies pointed out by the managers.
As Fig. 1 shows, 30 of the 33 managers (90.9%) classified innova-
tion in service as one of the strategies used, 19 (57.6%) indicated
Type of relationship the service organization has

Discrete transactions or continuous delivery and

Discrete transactions or continuous delivery and

Discrete transactions and no formal relationship
Discrete transactions and member relationships

Continuous delivery and member relationships

sponsorship of sports or cultural events, 16 (48.5%) indicated discount

on ticket value, and only six (18.2%) managers identified non-price
promotion (e.g., gift offerings, luggage packages, and hotel packages).
Though non-price promotion was identified by only six managers as a
strategy developed by Brazilian airlines, a theoretical rationale was
found to justify inclusion of this variable in the model.
Characteristics distinguishing other types of air transport services.

Aaker (1991) argues that price discounts are effective in the short
member relationships

member relationships

term, increasing the ease with which the consumer remembers the
brand, but that they generate a negative image of the brand among
with customers

consumers in the long term because the reduced price tends to be as-
sociated with inferior service quality. Voorhees et al. (2015) suggest
investment in non-price promotions such as loyalty programs and gi-
veaways as an alternative. Non-price promotion was included in the
model as a variable to verify the effect of different types of promotion
on the dimensions of brand value.
Goods or intangible

Goods or intangible

Based on the literature and the manager survey, a conceptual model

Nature of service

was formulated to evaluate the relationship between marketing stra-

tegies and the dimensions of brand equity from the passenger's per-
spective. The model's reflection of the study's hypotheses is depicted in
People

People

People
assets

assets

Fig. 2. The relationship between variables is indicated by the arrows.

The dotted arrows indicate the (negative) relationship between non-
Type of service

price promotion and perceived quality. The other arrows indicate po-
Auctioneering
Air transport

sitive relations.
Banking
Hotelier

As Fig. 2 shows, innovation in services is used by companies to af-

Table 2

Food

fect consumer perceptions, increase brand awareness, and affect pur-

chase decisions (Stock, 2011). To achieve differentiation, airlines have

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D. Santos de Oliveira, M. Caetano Journal of Air Transport Management 75 (2019) 103–110

Fig. 1. Strategies developed for Brazilian airlines in the domestic market.

invested in innovations in passenger experiences before, during, and services, and giveaways. We thus propose the following:
after flights, such as new self-check-in services, first-class airport li-
H2a. Passengers' perception that price-related promotions are often
mousine services, and premium services (Rothkopf and Wald, 2011).
performed by the airline positively affects their associations and ease of
However, Yoo et al. (2000) emphasize that a strategy affects consumer
brand recognition;
perceptions and attitudes only when the consumer becomes aware of it.
We thus propose the following: H2b. Passengers' perception that price-related promotions are often
carried out by the airline negatively affects the perceived quality of the
H1a. Passengers' perceptions that service innovations are frequently
brand.
performed by the airline positively affect their associations and their
ease of brand recognition; H3a. Passengers' perception that non-price-related promotions are
often carried out by the airline positively affects their associations
H1b. Passengers' perceptions that innovations in services are often
and ease of brand recognition;
carried out by the airline positively affect the perceived quality of the
brand; H3b. Passengers' perception that non-price-related promotions are
often carried out by the airline positively affects their brand loyalty.
H1c. Passengers' perceptions that innovations in services are frequently
performed by the airline positively affect their brand loyalty. Air transport consumers are four times more likely to select airlines
with strong brands than those with weak brands. Linking a brand name
Price promotion can positively or negatively affect the brand value
to sporting and cultural events is thus a valuable strategy for
perceptions of consumers (Krystallis and Chrysochou, 2014). Crespo-
strengthening value perceptions (O'Connell, 2006). Since 2008, Emi-
Almendros and Barrio-García (2016) identify the most effective pro-
rates Airlines, the second most profitable airline in the world, has in-
motional incentives for airline ticket purchases. They find that dis-
vested approximately 4% of its marketing revenue (USD 380 million) in
counted price promotions are effective for consumers with little ex-
the sponsorship of sporting and cultural events such as the football
perience buying tickets online, while experienced consumers tend to
World Cup, rugby, cricket, and music and literature festivals. The
prefer non-price promotions such as hotel room rate discounts and
company's logic is that sporting and cultural events occur globally and
freebies like suitcase sets.
that sponsoring a diversity of events helps spread the brand across
Complementing these results, Aaker (1991) finds that price dis-
passenger profiles (O'Connell, 2006, 2011). For the same reason,
counts are effective in the short term, increasing the company's rev-
Turkish Airlines has been sponsoring sporting events such as European
enues and the ease with which the consumer recalls the brand; in the
basketball, tennis, and golf tournaments since 2009. The company's
long run, however, it generate a negative image of the brand because
goal is to increase brand recognition and consumers' quality percep-
the reduced price tends to be associated with a lower service quality. An
tions. In 2013, the company invested 1.34% of its advertising revenue
alternative for boosting sales volume and strengthening the brand is
(USD 252 million) in event sponsorship. These efforts helped the
offering non-price promotions such as loyalty programs, exclusive

Fig. 2. Conceptual model.

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D. Santos de Oliveira, M. Caetano Journal of Air Transport Management 75 (2019) 103–110

company become the most globally recognized company between 2009 (2016), Çifci et al. (2016), and Schivinski and Dabrowski (2015). Brand
and 2013 (Dursun et al., 2014). We thus propose the following: associations with brand awareness were measured using five items,
perceived quality was measured using two items, and brand loyalty was
H4a. Passengers' perception that the airline frequently sponsors
measured using three items. Marketing strategies (innovation in ser-
sporting and cultural events positively affects their associations and
vices, price promotion, non-price promotion, and events sponsorship)
ease of brand recognition;
were measured using the scales used by Stock (2011), Tong and Hawley
H4b. Passengers' perception that the airline frequently sponsors (2009), and Yoo et al. (2000). Innovation in services was measured
sporting and cultural events positively affects perceived brand quality. using six items from the scale used by Stock (2011). Price promotion
was measured using three items from Yoo et al.’s (2000) scale. Non-
The brand equity dimensions reflecting the value consumers per-
price promotion was measured using Tong and Hawley's (2009) scale.
ceive in a brand come from initial information received about the brand
All the items in the scales were translated with the help of specialists
through social networks, advertising messages, and contact with other
(eight PhDs and MAs with backgrounds in marketing and air transport)
consumers (Raggio and Leone, 2007). This initial brand information, if
and then reverse-translated (from English to Portuguese and vice
positive, will promote strong associations with the brand and help the
versa).
consumer recognize it more easily (Uslu et al., 2013). When the con-
sumer creates associations with the brand and recognizes it, value
judgments about it begin to form, and quality levels are perceived. A 4.2. Data analysis
long-term perception of high quality will influence the desire to buy or
repurchase the brand and recommend it to others (Aaker, 1991). The model was fitted to the dataset of the study using structural
Therefore, the following is proposed: equation modeling based on covariance. Structural equation modeling
was used for three reasons. First, it is a confirmatory statistical tech-
H5. Associations and ease of brand recognition affect perceived quality
nique (Babin and Svensson, 2012), and the purpose of this study was to
levels;
test relationships theoretically and empirically. Second, it is suitable for
H5b. Perceived quality affects brand loyalty levels. measuring latent or unobservable constructs, such as associations with
the brand and perceived quality. Third, it allows the estimation of
multiple simultaneous relations between dependent and independent
4. Methods
variables (Hair et al., 2005). This capacity for simultaneous analysis
distinguishes the method from most common linear regression proce-
4.1. Sample and data collection
dures such as multiple regression and ANOVA, which analyze the in-
dividual relationships between dependent and independent variables.
The sample used to test the conceptual model comprised air pas-
Two basic components characterize this statistical technique: the
sengers in the Brazilian domestic market. The research was focused in
measurement model and the structural model (Babin and Svensson,
the regions with the largest number of departures for every thousand
2012).
inhabitants in 2015: the central west region (8.21), southeast region
The adjustment of the measurement model was verified. The com-
(5.31), and south region (4.16). Airports were selected in each of these
posite reliability values of the constructs (innovation in services, price
regions: two airports in central west region, three airports in the
promotion, non-price promotion, sponsorship of events, associations/
southeast region, and one airport in the south region. The airports se-
awareness, perceived quality, brand loyalty) and average variance ex-
lected are all among Brazil's 20 largest airports (by number of passen-
tracted were analyzed, as shown in Table 3. The composite reliability
gers; ANAC, 2016). The research examined six airports located in three
results were higher than 0.70, and the average variance extracted re-
regions of the country to ensure a wide passenger sample variability
sults were higher than 0.50, satisfying the goodness of fit criteria cited
reflecting the Brazilian domestic market.
by Bagozzi and Yi (2012) and indicating that the study's items had
At each airport, self-administered, pre-tested, revised questionnaires
adequate reliability in terms of the constructs.
were given to passengers in the airport lounge. A total of 561 ques-
The validity of the items used in the questionnaire was also ana-
tionnaires were obtained, 81 of which were discarded for various rea-
lyzed. Eight marketing and air transport specialists verified the ade-
sons, such as if they contained unanswered or duplicate items, or if the
quacy of the set of indicators used to measure each construct and their
respondent had not travelled in the domestic market. Ultimately, 480
validity was confirmed. Thus, it was concluded that the items used in
valid questionnaires were obtained. The sample size was defined based
the study have adequate reliability for the research constructs.
on the minimum proportion suggested by Hair Jr. et al. (2005): five
The structural model examined the relations between the percep-
respondents for each parameter estimated via structural equation
tions of the marketing strategies developed in the Brazilian air transport
modeling. In the model, 59 parameters were estimated and 480 valid
sector (innovation in services, price promotion, non-price promotion,
responses were obtained—meaning about eight respondents per para-
event sponsorship) and the dimensions of consumer-based brand equity
meter, which is considered appropriate based on the standards estab-
(associations/awareness, perceived quality, brand loyalty). Each of the
lished by the authors.
goodness-of-fit indicators for the general model was analyzed (χ2, χ2/
The questionnaire comprised three sets of closed questions. The first
d.f, GFI, AGFI, CFI, TLI e RMSEA). Table 4 presents descriptions of each
verified if the respondent met the search criteria (e.g., “Have you tra-
of the indicators and compares the results with reference values.
velled in Brazil by any airline in the last 12 months?”) to ensure that the
respondent had travelled in the domestic market. The second set con-
Table 3
sisted of measurement scale items. The third was composed of quali- Reliability indicators of measurement model.
fying questions, such as about age and income range. Three ques-
tionnaire models were developed to avoid possible distortions produced Construct Average Variance Extracted Composite Reliability

by the order of the questions; the only difference between them was the Innovation in services 0.930 0.988
position of the questions in sets 2 and 3. Price promotion 0.905 0.965
The study's scales were constructed based on previously validated Non-price promotion 0.792 0.882
scales. A five-point Likert scale was used to measure all items Sponsorship of events 0.967 0.989
Associations/awareness 0.845 0.959
(1 = “strongly disagree”; 5 = “strongly agree”). Consumer-based brand
Perceived quality 0.971 0.971
equity was measured using items proposed by Yoo and Donthu (2001), Brand loyalty 0.903 0.964
which have also been used in recent studies such as Bakshi and Mishra

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D. Santos de Oliveira, M. Caetano Journal of Air Transport Management 75 (2019) 103–110

All indicators of goodness-of-fit exceed the acceptable limits

310.67 (p > 0.05)

(GFI = 0.94, AGFI = 0.92, CFI = 0.969, TLI = 0.963, RMSEA = 0.044,
Model Result
χ2 = 310.67, χ2/g.l = 1,94, p < 0.001).

1.94 5. Results

0.94
0.92
0.97
0.96
0.04
Data were collected from 480 participants: 54% male and 46% fe-
The lower the better (p > 0.05)

male. Approximately 66.5% of the respondents had completed higher

education. Most of the respondents (53.1%) were between 25 and 39
Between 1 and 3: good

years of age. Regarding annual salary range, 34.8% made between USD
˂ = 0.08: reasonable
Up to 5: reasonable

707.32 and USD 1.650.42, and 25% made between USD 235.77 and
Reference Value

USD 707.32. More than half of the participants (52.1%) had used the
˂ = 0.05: good

airline more than five times; the main reasons for travel were leisure
˃ = 0.90
˃ = 0.90
˃ = 0.90
˃ = 0.90

(61.5%) and professional commitments (42.5%).

Table 5 presents the test results concerning the relationship between
the marketing strategies adopted by Brazilian airlines in the domestic
market (innovations in services, price promotions, non-price promo-
Indicates to what extent the quality of the adjustment of the proposed model is better than the quality of the base model.

tions, and event sponsorships) and the dimensions of consumer-based

Shows the quality of the model fit to the covariance matrix of the sample, taking account of the degrees of freedom.

brand equity.
Innovation in services showed positive significant effects on per-
ceived quality and brand loyalty (β = 0.63, CR = 12.9, p < 0.001 and
β = 0.32, CR = 4.0, p < 0.001, respectively), supporting H1b and
H1c, but insignificant effects on brand associations/awareness, re-
jecting H1a (β = 0.03, CR = 0.7, p > 0.001). This indicates that in-
Like the CFI, it shows how much better the proposed model fits in relation to the base model.

novation in services is effective for enhancing perceived quality and

brand loyalty. According to Rothkopf and Wald (2011), innovation in
Compares the fit between the proposed model and the model suggested by the sample.

services leads to greater passenger safety. The results of this study

suggest that this safety is reflected in perceptions of brand quality and
brand loyalty, but not in brand associations or ease of brand recall.
Indicates the discrepancy between the expected and observed variance matrix.

Innovations in services are ineffective for brand associations/

awareness because of the difficulties Brazilian airlines encounter when
attempting to innovate their services. Significant innovations imply
costs, and Brazilian airlines are facing financial difficulties for reasons
Presents the ratio between chi-square and degrees of freedom.

not addressed in this study. Such innovations as are made are in-
cremental—online check-in and self-check-in kiosks, for example
(Padovez et al., 2017). These do not lead consumers to perceive sig-
nificant differences between companies’ services and thus do not affect
their associations or ease of brand recall. Thus, innovations in services
may be options for Brazilian airlines wishing to strengthen brand loy-
alty and quality, but incremental innovations by themselves appear
GFI adjusted by degrees of freedom.

insufficient for recovering profitability.

Promotional strategies, price promotion, and non-price promotion
had varying effects on the dimensions of consumer-based brand equity.
Price promotion showed a positive effect on brand associations/brand
awareness and perceived quality, supporting H2a (β = 0.21, CR = 3.4,
p < 0.001) and rejecting H2b (β = 0.19, CR = 3.1, p < 0.001). These
results indicate that airlines perceived as offering frequent price dis-
Description

counts have the greatest associations, brand recall, and perceived

quality. The positive effect of price promotion on perceived quality does
not match expectations; frequent price promotions tend to be related to
lower service quality (Aaker, 1991). This surprising result can be ex-
Root mean square error of approximation

plained by considering the peculiarities of the air transport sector re-

Source: Adapted from Malhotra et al. (2014).

lative to other economic sectors. Since market liberalization, offering

low prices amid a price war has become a survival strategy for most
Structural model adjustment indicators.

Adjusted goodness-of-fit index

airlines. The low prices boosted the use of price promotions, which have
become common. The four airlines examined by this study all practice
Chi-square divided by d.f

price promotion. Thus, passengers do not perceive price as an indicator

Comparative fit index
Goodness-of-fit index

Tucker–Lewis index

of poor quality but consider it common and use it as a criterion in their

purchase decisions. In other scenarios, where price promotion is used
only occasionally, the results may be different. Non-price promotion
Chi-square

was insignificant for brand associations and brand loyalty, rejecting

H3a (β = −0.07, CR = −1.2, p > 0.001) and H3b (β = −0.01,
CR = −0.4, p > 0.001). Most of the passengers said they were not
Indicator

RMSEA

aware of or had never benefitted from any non-price promotion from a

Table 4

χ2/d.f

AGFI

Brazilian airline.
GFI

CFI
TLI
2
χ

The sponsorship of sporting and cultural events had a positive effect

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D. Santos de Oliveira, M. Caetano Journal of Air Transport Management 75 (2019) 103–110

Table 5
Hypothesis test results.
Hypothesis β CR Conclusion

Relationships between marketing strategies and dimensions of consumer-based brand equity

H1a - Innovation in services → Associations/awareness (+) 0.03 0.7 Rejected
H1b - Innovation in services → Perceived quality (+) 0.63*** 12.9 Supported
H1c - Innovation in services → Brand loyalty (+) 0.32*** 4.0 Supported
H2a - Price promotion → Associations/awareness (+) 0.21*** 3.4 Supported
H2b - Price promotion → Perceived quality (−) 0.19*** 3.1 Rejected
H3a - Non-price promotion → Associations/awareness (+) −0.07 −1.2 Rejected
H3b - Non-price promotion → Brand loyalty (+) −0.01 −0.4 Rejected
H4a - Sponsorship of events → Associations/awareness (+) 0.16*** 3.8 Supported
H4b - Sponsorship of events → Perceived quality (+) 0.03 0.7 Rejected
Relationship between brand equity dimensions
H5a – Associations/awareness → Perceived quality (+) 0.34*** 5.8 Supported
H5b - Perceived quality → Brand loyalty (+) 0.54*** 5.8 Supported

Note: χ2 = 310.67, χ2/g.l = 1.942, CFI = 0.969, TLI = 0.963, RMSEA = 0.044, p < 0.001***.

on brand associations/brand awareness, supporting H4a (β = 0.16,
CR = 3.6, p < 0.001). Linking the airline brand to major events such
as rugby or film festivals increases its recognition by the community
(O'Connell, 2006, 2011). The results indicate that the more consumers
observe the brand in big events such as the World Cup (which is highly
valued by Brazilians) and the more associations it has, the more easily
they recognize it.
Although each of the brand equity dimensions makes a different
contribution to business results, they are not completely unrelated.
Associations and ease of brand recognition affect levels of perceived
quality (β = 0.34, CR = 5.8, p < 0.001) and perceived quality affects
brand loyalty (β = 0.54, CR = 5.8, p < 0.001), as H5a and H5b sug-
gested, respectively. Thus, investments designed to strengthen a specific
dimension, such as perceived quality, will affect not only perceived
quality but brand loyalty as well.
These results suggest that strengthening the dimensions of con-
sumer-based brand equity requires aggregating joint investments in
innovations in services, price promotions, and event sponsorship.
Investing in marketing strategies to strengthen consumer-based brand
equity implies additional costs for airlines, which will be passed on to
the consumer, but the increase in the passengers’ perception of brand
value will increase their brand preference, intention to purchase, and
willingness to pay a premium price (Lin, 2015; Pearson et al., 2015;
Chen and Chang, 2008).
6. Conclusions
This study examines the relationship between the marketing stra-
tegies adopted by Brazilian airlines in the domestic market and the
strengthening of key consumer-based brand equity dimensions (brand
associations with brand awareness, perceived quality, and brand loy-
alty). The results show that strategies for innovations in service, price
promotion, and event sponsorship are effective in stimulating con-
sumer-based brand equity dimensions, if taken together. Investments in
price promotions are necessary for strengthening consumers’ associa-
tions with and awareness of an airline brand. Enhancing perceptions of
brand quality and brand loyalty requires investments in innovations in
services. Investments made to strengthen one dimension may affect
another because brand associations/awareness affects perceptions of
brand quality, which affect brand loyalty. Consumers should be made
aware of any investments implemented for service innovation, price
promotion, and event sponsorship. A marketing strategy will affect
consumer perceptions only if consumers know it exists. Thus, both in-
vestments in and communication of the strategy are necessary.
This study should help airline managers recover the profitability of
their airlines, since it highlights the marketing strategies they could use
in the Brazilian domestic market to strengthen consumer-based brand
equity. Strengthening the brand's perceived value would enable airlines
to increase the value of air travel, as consumers will see reasons to pay
for a premium price, thus strengthening their airline's position vis-à-vis
competitors. These benefits could mainly contribute to full-service op-
erators seeking to differentiate themselves through their services. Low-
cost airlines could benefit from brand equity investments. However, the
main objective of these companies is offering low prices, which in-
dicates low value to the consumer. Thus, the costs of investments to
strengthen brand equity could not be met by receipts. This study also
has important theoretical implications, as it examined a sector poorly
explored by the consumer-based brand equity literature: the air trans-
port industry. This study has examined each of the dimensions of
consumer-based brand equity and demonstrated how airlines can ben-
efit by strengthening each one.
These results are limited to the Brazilian context. Brazil is a devel-
oping country with a high concentration of its population living in the
capital (Koo and Lohmann, 2013). Future studies could apply a method
similar to that used in this study to other developing countries to verify
if the results for Brazil are applicable in other contexts. To this end, the
strategies used by airlines in the country surveyed should be identified,
and the conceptual model should then be validated, as was performed
in this study.
Acknowledgments
National Council for Scientific and Technological Development
(CNPq) and The State of Goiás Research Foundation (FAPEG).
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