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SAJBS
9,1
62
Received 15 March 2019
Revised 12 July 2019
3 September 2019
Accepted 6 September 2019
South Asian Journal of Business
Studies
Vol. 9 No. 1, 2020
pp. 62-87
© Emerald Publishing Limited
2398-628X
DOI 10.1108/SAJBS-03-2019-0046
The mediating impact of customer
satisfaction in relation of brand
equity and brand loyalty
An empirical synthesis and re-examination
Sonia Kataria and Vinod Saini
Amity College of Commerce and Finance, Noida, India
Abstract
Purpose – The purpose of this paper is to explore the inter-relationship of dimensions for consumer-based
brand equity and brand loyalty with customer satisfaction as a mediator for oral care segment with special
reference to Delhi and connecting areas.
Design/methodology/approach – For achieving the objective of this study, the theoretical model was
tested through structural equation modelling. Research scales from the literature were modified for
suitability. Data were collected from 250 respondents.
Findings – The results indicate that for the oral care segment, customer satisfaction is significantly related
to the perceived quality, brand trust, perceived value of cost and lifestyle congruence. Moreover, customer
satisfaction partially mediates the relationship of perceived quality and perceived value of cost with brand
loyalty, whereas it fully mediates the relationship of lifestyle congruence and brand trust with brand loyalty.
Thus, even for low-involvement products, consumer purchases are based on the attributes of the brand rather
than being merely habitual.
Originality/value – The literature supports the direct influence of brand equity on brand loyalty. However,
no other study has investigated the mediating role of customer satisfaction on the relationship between brand
equity and brand loyalty for low-involvement products.
Keywords Brand equity, Customer satisfaction, Brand loyalty, Perceived quality, Perceived value of cost,
Lifestyle congruence
Paper type Research paper
1. Introduction
The brand is considered as a highly distinguished and valuable asset for any company.
The brand is a strategic tool for marketers, and it diminishes the effect of price sensitivity
in market competition (Helmig et al., 2007). Customers are inclined to spend additional
money for a preferred brand because they believe that no competitor can deliver the value
provided by the preferred brand. The premium price paid by the customers is partially
justified by brand loyalty. Hence, brand loyalty is considered as a requisite for an
organisation’s profitability and sustainability (Chaudhuri and Holbrook, 2001). With
reducing product differentiation and the short maturity period and increasing
unpredictability of the product market, the conservation and growth of brand loyalty is
the focal interest of marketers.
Previous studies have not been able to reach a common consensus regarding the
relationship of brand loyalty with customer-based brand equity. Aaker suggested that
loyalty is one of the principal elements for brand equity, whereas Keller believes that loyalty
is the outcome of brand equity rather than a determinant of it (Aaker, 1991; Keller, 1993;
Lei and Chu, 2015). In his study, Nam et al. (2011) supported Keller’s viewpoint by
mentioning that loyalty is not one of the element of equity but rather a consequence of it
because brand equity is a perception, whereas loyalty is a behavioural construct related to
the intentions of repurchase. Expanding on the perspective of Nam et al. (2011), the current
study considers loyalty as a outcome of brand equity. Hence, brand loyalty is observed as a
dependent variable for brand equity rather than its component.
 The majority of research on brand loyalty gave attention to the high-involvement Brand equity
product category. The consumption period of oral care products is generally short (i.e. less and brand
than one month), and the involvement of customers is also low. Previous studies support loyalty
that product involvement, specifically high product involvement, is an important
determinant for brand loyalty (Iwasaki and Havitz, 1998). However, Martin (2004)
suggested that even in the low-involvement product category, consumers can have high
brand loyalty. Consumer purchases are based on the attributes of these products rather than 63
being merely habitual. Other researchers (Quester and Lin Lim, 2003; Ferreira and Coelho,
2015; Kumar Mishra et al., 2016) have supported Martin’s viewpoint and have empricially
investigated the relationship of product involvement and brand loyalty. However, the nature
and scope of the relationship remain undetermined and require further investigation.
It was first pointed out in the 1980s that brand equity is positively related to customer
satisfaction (Lanza, 2008). The majority of the literature focusses on customers’
postconsumption evaluation, including their behavioural and attiutdinal loyalty (Cooil et al.,
2007; Hansemark and Albinsson, 2004). However, limited attention has been devoted to the
inter-relations among loyalty, brand equity and customer satisfaction. Although the literature
suggests that brand loyalty is directly influenced by brand equity, the medaiting role of
customer satisfaction in the relationship between loyalty and equity has not been analysed by
reaserchers for the low-involvement product category. Despite the significance of the topic
and the numerous studies published on loyalty, brand equity and customer satisfaction, there
exists a scarcity of studies on the relationship among these three variables.
The study of Lei and Chu (2015) is notable because they illustrated the role of customer
satisfaction as a mediator in the relationship between brand loyalty and brand equity for
the sports brand industry. They concluded that brand equity has a significant effect on
loyalty, which is partially mediated by customer satisfaction. Lei and Chu further
indicated that perceived value is most significant and important variable for improving
brand equity. The current study contributes to consumer behaviour literature by
introducing a parsimonious estimate of brand equity, including the symbolic and
functional consumption aspects of brand evaluation through the consideration of lifestyle
congurence and brand identification from the model of Nam et al. (2011), and using the
perceived quality and perceived value of cost dimensions from Aaker’s (1991) model of
brand equity with another dimension, namely trust.
The objective of the current study is to investigate the mediating role of customer
satisfaction in the relation between brand loyalty and brand equity and to confirm the
significant dimensions of brand equity for the low-involvement product category.

1.1 Criteria for selecting the product category

The Indian oral care sector is one of the fastest-growing fast-moving consumer goods
sectors. Products such as toothpaste, mouthwash and toothpowder mainly dominate the
Indian oral care market, whereas products such as dental floss and dental rinse are still in
their niche stage. Sales in the toothpowder category have declined due to changes in taste
and preferences of Indian consumers. The oral care sector provides tremendous potential for
penetration because the per capita consumption of oral care products is still quite low.
Increases in disposable earnings, the income of the lower middle class, oral hygiene
awareness, and the convenience of usage and the achievement of a developed distribution
system are expected to inflate the oral sector’s growth rate. Even in rural areas, consumers
are switching from various traditional solutions, such as datum (neem twigs), tobacco, salt,
and ash, to new and contemporary solutions. The current study attempts to explore the
symbolic and functional aspects in an emerging market such as India (Nguyen et al., 2011).
Strategies developed in western or mature markets may be unsuitable for emerging markets
(Sheth, 2011) because western consumer insights may be inapplicable to developing
SAJBS countries due to differences in socioeconomic and cultural conditions (Hamzaoui Essoussi
9,1 and Merunka, 2007). This study attempts to combine traditional dimensions, such as
perceived quality and value of cost, with contemporary developments, such as brand trust,
brand identification and lifestyle congruence. Such studies on brand loyalty and customer
satisfaction have not been published and thus provide an opportunity to address issues
relevant for practitioners and academicians.
64 The oral sector is characterised by frequent sales promotion, close pricing and
high-decibel advertising of brands, which increases brand awareness and offers consumers
an opportunity to try out different available brands. Consumers can assess and discriminate
between brands of oral care and express their loyalty because this product category
has been available in the Indian market for decades and most consumers are familiar with
the brands in this category. Thus, the oral care category is suitable for the research
objective. Moreover, this category comprises both therapeutic and cosmetic brands. Thus,
both functional aspects (perceived quality and perceived cost) and symbolic aspects
(lifestyle) can be investigated. For instance, Closeup, Colgate and Fresh Gel are positioned as
lifestyle brands, with symbolism being the main driver of the brands. On the other hand,
Patanjali Ayurveda’s Dant Kanti, Pepsodent, Colgate Visible White and Dabur Red Paste
are positioned on the basis of functional benefits.

2. Literature review
2.1 Brand equity
Various researchers have provided different perspectives on brand equity, with most of
them being similar to the definition provided by Farquhar (1989), Park and Srinivasan
(1994), Baldinger and Rubinson (1996) and Aaker (1996) that “brand equity is the value
addition done by a brand through customers’ association and perception towards a
particular product”. Brand equity is generated from the higher faith that consumers have in
a particular brand compared with others. This built-in trust translates into brand loyalty
and premium pricing for the brand. Brand equity is the overall utility, including both
functional and symbolic utility, associated by the customer with purchase of the brand
(Vazquez et al., 2002). Brady et al. (2008) distinguished brand equity from brand loyalty.
They indicated that brand equity is a wider concept than brand loyalty because it entails
brand familiarity and brand image (i.e. perception regarding quality), whereas brand loyalty
is generally associated with the number of repurchases by the consumer. Brand equity
encompasses the positive inclination that may or may not translate into purchase. Hence,
behavioural intention is the consequence of brand equity rather than a component.
Lehmann and Srinivasan (2014) indicated three viewpoints of brand equity: customer,
product market and finance viewpoints. According to customer viewpoint, brand equity
represents consumers’ perception and reaction to branded and nonbranded products (i.e. the
customer association with the brand). The product market viewpoint reflects brand equity
in sales and revenue for a branded product compared with that for an equivalent
nonbranded product. Finally, the finance perspective represents brand equity as the net
present value of brand-anticipated future purchases.
The current study adopts the customer-based approach because this approach is
beneficial for evaluating marketing strategies and positioning the brand, whereas the
finance perspective is only limited to brand valuation. Keller (1993) suggested that the
source of brand equity is customer perceptions. Therefore, measuring and tracking brand
equity at the customer level is a crucial task for managers (Lassar et al., 1995). According to
Kim et al. (2008), the consumer perspective is feasible because it offers a strategic
perspective of consumer behaviour, which can help marketers in developing suitable
strategies. The consumer perspective provides managers with a structured approach for
formulating branding strategies.
2.2 Brand loyalty Brand equity
Brand loyalty is a major topic in consumer behaviour literature. The significance of brand and brand
loyalty can be estimated by the fact that this factor is a measure of the business loyalty
performance, which influences the financial performance of an organisation (Khan, 2013).
It brings numerous uncountable benefits, such as substantial entry barriers for competitors,
increased market share and sales revenue, increased company’s capacity to react to
competitive threats and low sensitivity of customers towards the marketing efforts of a 65
competitor having the potential to cause switiching behaviour (Delgado-Ballester and Luis
Munuera-Alemán, 2001).
It was previously considered as a subset of repeat purchase behaviour or intention to
repurchase the same brand (Cunnigham, 1956). This approach was highly criticised by
researchers because brand loyalty is not merely repurchase of the brand. Repurchase
may occur due to situational factors or lack of brand preference by the customer. Thus,
repeat purchase is one of the outcomes but certainly not the determinant of loyalty. Brand
loyalty is developed when the consumer becomes an ambassdor for the company without
any incentive. Marketers should not only be concerned with repurchase but should also
focus on the reasons driving repurchase. Furthermore, Dick and Basu (1994) indicated that
the behavioural approach is not sufficient for interpreting the drivers behind repeat
purchase behaviour.
Broadly, as per literature there are two school of thought measuring brand loyalty:
Behavioural and Attitudinal Loyalty. Behavioural approach consists of repurchase os
specific brand inspite of situational and marketing efforts of competitors whereas
attitudinal loyalty is consumer’s psychological attachment and positive attitude towards the
particular brand (Rauyruen and Miller, 2007). It includes positive word of mouth;
commitment to brand; recommendation and encouraging others about brand (He et al.,
2012). Thus, concluding that brand loyalty is a multi–dimensional approach rather than
uni-dimensional (Aurier and Séré de Lanauze, 2012; Curran and Healy, 2014).

2.3 Mediating variable: customer satisfaction

Customer satisfaction has been characterised from numerous viewpoints (Dimitriades,
2006). However, the most broadly acknowledged definition of customer satisfaction in the
literature is provided by the expectancy disconfirmation theory (McQuitty et al., 2000),
where satisfaction level is defined as a consequence of the difference between the expected
and perceived performance (Oliver, 1999). Customer satisfaction may directly and indirectly
influence business sustainability, competitiveness and profitability (Gomez et al., 2004; Luo
and Homburg, 2007). Satisfied consumers are considered to be less price conscious and less
influenced by rivals’ strategies, thus resulting in a broad customer base for a brand
(Dimitriades, 2006; Zineldin, 2000). Satisfaction is an affective psychological process rather
than only a cognitive process (del Bosque and San Martín, 2008).
Broadly, two kind of satisfaction are described in the literature: transaction-specific and
overall satisfaction (Oliver and Westbrook, 1993). The current study uses the measure of
overall satisfaction because this measure is a superior indicator of future loyalty as its
evaluation is based on all encounters with the manufacturer. Transaction-specific
satisfaction is an affective reaction that differs from one experience to another. Hence, this
measure may lack stability, whereas overall satisfaction is a superior indicator of the overall
brand attitude because this measure is comparatively stable (Auh et al., 2003).

2.4 Perceived quality

Netemeyer et al. (2004) defined perceived quality as the customers’ assessment of the overall
supremacy of the brand compared with that of alternative available brands. This measure is
subjective in nature due to it being based on customers’ perception regarding quality,
SAJBS product benefits and need fulfilment. Attributes attached to a brand, such as the cost,
9,1 physical appearance, features, advertisements and brand name, also influence a purchaser’s
perception of quality. Perceived quality forms a selective brand image in consumers’mind
and hence leads to product differentiation (Aaker, 1991). Keller (1993) differentiated quality
from perceived quality. He defined quality as actual superiority or excellence over
competitors’ brands and perceived quality as consumers’ intangible perceptions of
66 superiority of a product (i.e. their overall feeling regarding the brand). Creating a quality
product is only a partial victory. Perception should also be created by marketers.
It is an elemental factor in the brand equity framework due to its asscociation with brand
choice, premium price, brand purchase intention and brand loyalty (Keller et al., 2011).
Moreover, perceived quality is an important strategic variable that drives the financial
performance of an organisation. In the short run, high perception of quality would result in
increased profits due to premium pricing whereas in long run, market share and market
gain play a critical role in business growth (Bartikowski et al., 2010). In conclusion,
perceived quality is a subjective judgements of customers, and future purchase are
dependent on the evaluation of previous experiences and feelings.

2.5 Perceived value of cost

According to Tzeng (2011), perceived value as the outcome of assessing the relative value of
benefits received and amount sacrificed in relation with purchase. Due to its simple
approach, this definition was highly criticised by other researchers for not being
multidimensional. Netemeyer et al. (2004) provided a more holistic approach and described
perceived cost as customers’ evaluation of rewards obtained from the brand based on the
perception of benefits secured (example: quality and satisfaction) and sacrifices incurred
(like: price paid and other nonmonetary cost). Consumer behviour can be better analysed
through the perceived value approach because perceived value is a basis for all marketing
strategies, like: market segmentation, policy positioning and product differentiation. The
value construct can explain various branches of consumer behaviour like brand choice,
purchase intention and repeat purchase behaviour. Sirdeshmukh et al. (2002) suggested that
consumer perceived value is likely to regulate brand loyalty because perceived value is a
superordinate goal, whereas brand loyalty is a subordinate goal. Thus, the value construct
supervises behavioural intentions of loyalty till such relational exchange can deliver higher
value than other brands can. Value also helps in obtaining competitve advantage in the
ever-shrinking product differentiation market.

2.6 Brand identification

Consumers indicate their social identity by connecting to or consuming a particular brand.
This leads to integration or dissociation of consumers with a particular class of individuals,
who form a social circle. Long and Schiffman (2000) indicated that the consumption of a brand
is influenced by customers’ social identity. The relationship of brand identification and brand
loyalty was empirically supported by Bhattacharya and Sen (2003). Nam et al. (2011) indicated
that customer satisfaction partially mediates the relationship between brand identification
and brand loyalty. They stated that strong brand identification leads to high satisfaction.
According to the aforementioned perspectives, this study defines brand identification as
customers’ perceived association with a particular brand, where the customers regard the
brand as an integral part of their life and associate themselves with its successes and failures.

2.7 Brand trust

Trust is logically and experientially an important facor in the relationship between a buyer
and seller (Komunda and Osarenkhoe, 2012). Customers who lack trust are unlikely to be
brand-loyal and switch from one brand to another, whereas a trusted brand enjoys Brand equity
increased market share and sales revenue, premium price, increased purchasing power. and brand
A few studies have suggested trust to be an intention (Gefen and Straub, 2003), whereas loyalty
others have suggested it to be a belief (Ganesan, 1994). In their study on the mediating role
of values in the relationship between trust and loyalty, Sirdeshmukh et al. (2002) concluded
that organisations should primarily focus on competence, benevolence and the problem-
solving attitude for building trust with consumers. Despite the importance attached to trust, 67
limited consumer behaviour literature focusses on brand trust (Delgado-Ballester and Luis
Munuera-Alemán, 2005). In another study, they further concluded that in the
high-involvement product category, brand trust leads to brand loyalty and firms also
enjoy premium pricing (Delgado-Ballester and Luis Munuera-Alemán, 2001). They further
illustrated that previous favourable brand experience results in brand trust, which
positively impacts brand loyalty and equity. The aforementioned findings were also
confirmed by Chiou et al. (2002).

2.8 Lifestyle congruence

The lifestyle concept reveals consumers’ daily needs and wants. It also indicates how
particular brands help consumers in their pursuit of a particular lifestyle. Moreover,
consumers develop a preference for and repurchase a particular brand when its
consumption helps them express their uniqueness by pursuing their desired lifestyle (Phau
et al., 2015). In a wider sense, lifestyle indicates demographic characteristics, attitudes
towards life, beliefs, and aspirations and is an integral component of consumers’ daily life
(Brassington and Pettitt, 2003). However, no such widely accepted definition of lifestyle is
available in literature. Solomon (2010) broadly defined lifestyle as the degree to which
consumption supports individuals’ uniqueness of living, which is influenced by their beliefs,
judgements, interests and affairs.

2.9 Summary of literature review

Literature review supported the idea that the perceived quality, perceived value and trust
had an impact on satisfaction and loyalty. The former studies concluded to verify the
experiences of users of FMCG category and highlighted that:
(1) literature supported perceived quality, value of cost as an essential determinant for
customer-based brand equity;
(2) brand loyalty is the consequence for brand equity rather than being a component;
(3) the relation between brand identification, trust and lifestyle congruence with
customer’s satisfaction are presenting new perspectives of loyalty concept; and
(4) there is strong connection between brand trust and behavioural loyalty in
low-involvement product category, which reveals that true loyalty do exist and
buyers purchase on the basis of attributes rather than habit.

3. Theoretical model and hypothesis development

3.1 Theoretical model
The objective of the current study is to examine the inter-relationship among
customer-based brand equity, customer satisfaction and brand loyalty in the
low-involvement product category (oral care sector) with reference to New Delhi and its
connecting areas. The various variables considered in the current study are illustrated in
Figure 1. A model is first developed without considering the mediating effect of customer
satisfaction, followed by inclusion of customer satisfaction for estimating the relationship
SAJBS
Perceived
9,1 Quality
H1

Perceived H2
Value of Cost

Customer H6 Brand
68 Brand H3 Satisfaction Loyalty
Identification
H4

Trust
H5

Lifestyle
Congruence
Figure 1.
Research model
Note: CBBE, Consumer-based brand equity

among various independent variables that are assumed to construct brand equity, namely
perceived quality, perceived value of cost, brand identification, trust and lifestyle
congruence with brand loyalty.

3.2 Hypothesis development

3.2.1 Perceived quality and customer satisfaction. Aaker (1991) was the first to establish the
relationship between perceived quality and brand equity. Perceived quality influences
brand equity by reducing the perceived risk associated with the brand. Previous studies
illustrated that perceived quality influences customer satisfaction because perceived quality
is the evaluation of a specific belief, whereas satisfaction is a postpurchase concept (Olsen,
2002). Hence, satisfaction is an affective evaluation that can be predicted from the quality
belief as a cognitive component of the evaluation. Darsono and Junaedi (2006) supported the
view that perceived quality is an antecedent for customer satisfaction and shares a direct
and positive relationship with satisfaction. Zeithaml (2000) concluded that a brand with
high-quality perception would achieve high satisfaction. Other reserachers have also
supported this relationship and have conlcuded perceived quality to be a major antecedent
for customer satisfaction. Hence, satisfaction and loyalty are positively influenced when
customers perceive high quality and the product meets customers’ expectation ( Juran and
Godfrey, 1999). Therefore, the following hypothesis is proposed:
H1. Perceived quality positively influences customer satisfaction.
3.2.2 Perceived value of cost and customer satisfaction. Consumer value is fundamental to all
marketing strategies because high value is the primary motivation for repurchase by the
customer. Perceived value is directly linked with satisfaction. As the perception of value
increases in consumers’ mind, satisfaction also increases (Dorai and Varshney, 2012;
Vandermerwe, 2003). There is a direct relationship between perceived value and customer
satisfaction because both concepts are based on evaluative judgement (Woodruff and Gardial,
1996). There exists a high possibility that customer satisfaction can be an antecedent or a
result of perceived value; however, the literature supports the view that satisfaction is a result
of perceived value, that is, perceived value significantly influences satisfaction (Cronin et al.,
2000). Consumer satisfaction is a postpurchase evaluation which is dependent upon perceived
quality and value. Chitty et al. (2007) also supported the direct association between perceived
value and customer satisfaction. McDougall and Levesque (2000) concluded that perceived Brand equity
value directly impacts customer satisfaction, which further results in loyalty. Other and brand
researchers (Anderson and Mittal, 2000; Theodorakis et al., 2014) have also empirically loyalty
supported that there exists a significant relationship between perceived value and satisfaction.
Therefore, the following hypothesis is proposed:
H2. Perceived value of cost positively influences customer satisfaction.
69
3.2.3 Brand identification and customer satisfaction. Consumers who identify with a brand
feel satisfied when brand expectations are met. The literature supports the view that brand
identification encourages emotional attachment, symbolic consumption and brand loyalty.
Kim et al. (2001) also indicated that brand identification influences customer satisfaction and
loyalty. Shirazi et al. (2013) analysed the inter-relationship among brand identity, brand
identification, loyalty, trust and customer satisfaction and concluded that brand
identification indirectly influences loyalty through perceived value of cost, trust and
satisfaction. Other researchers have also supported the view that brand identification is a
determinant for customer satisfaction (Casaló et al., 2010; Pérez and Rodriguez del Bosque,
2015). However, researchers also have another viewpoint regarding the direction of the
relationship. After fulfilling self-definitional needs, a satisfied customer is more likely to
ascribe positive identity to the target of identification, which further enhances identification
(Bhattacharya et al., 1995; Arnett et al., 2003). Other studies have also empirically supported
this viewpoint (Kuenzel and Vaux Halliday, 2008). Hence, additional studies are required to
enrich literature on the direction of this relationship. This study proposes that high brand
identification would result in high customer satisfaction:
H3. Brand identification positively influences customer satisfaction.
3.2.4 Trust and customer satisfaction. Trust is a significant antecedent for customer
satisfaction (Chiou and Pan, 2009; Berry, 2000). A customer with high brand trust would
have high satisfaction and high willingness to commit. Singh and Sirdeshmukh (2000)
concluded that trust directly influences satisfaction, which leads to increased loyalty.
Chaudhuri and Holbrook (2001) also supported this conclusion and suggested that trust
plays an indispensable role in customer satisfaction which in turn impacts loyalty, and
results in increased market share and premium pricing. Other researchers have also
empirically supported the existence of a positive relationship between trust and satisfaction
(Yoon, 2002). Therefore, the following hypothesis is proposed:
H4. Brand trust positively influences customer satisfaction.
3.2.5 Lifestyle congruence and customer satisfaction. Lifestyle branding is a social scenario
in which a customer purchases a brand that correlates with their desired lifestyle. Solomon
(2010) suggested that higher the compatibility between the brand image and customers’
personal lifestyle, the higher is the level of customer satisfaction experienced with the brand.
He further indicated that marketers should aim to increase satisfaction by creating a brand
that identifies with customers’ lifestyles. Nam et al. (2011) postulated that customer
satisfaction fully mediates the effect of lifestyle congruence on brand loyalty. Therefore, the
study proposes the following hypothesis:
H5. Lifestyle congruence positively influences customer satisfaction.
3.2.6 Customer satisfaction and brand loyalty. Various researchers have supported the
viewpoint that loyalty is one of the consequences of customer satisfaction
(Delgado-Ballester and Luis Munuera-Alemán, 2001). Previous studies have indicated that
increased consumer satisfaction leads to increased attitudinal loyalty ( Jones and Suh, 2000;
SAJBS Rundle-Thiele and Maio Mackay, 2001). Fornell et al. (1996) concluded that enhanced
9,1 satisfaction significantly influences both attitudinal and behavioural loyalty, that is, a
satisfied customer would make repeat purchases and endorse the brand to acquaintances.
Hence, high customer satisfaction would lead to increased market share and premium price
through attitudinal and behavioural loyalty. Brakus et al. (2009) also concluded that a
favourable relationship exists between satisfaction and loyalty. They further illustrated that
70 when a customer feels positive towards and appreciates a particular brand, the level of
brand loyalty increases. Behavioural theories, such as the theory of cognitive dissonance
and learning theories, also explain satisfaction as an antecedent for loyalty. Other studies
have empirically supported that customer satisfaction significantly and directly impacts
loyalty (Boenigk and Helmig, 2013; Szymanski and Henard, 2001; Homburg et al., 2009).
However, certain researchers have predicted that customer satisfaction may not necessarily
result in brand loyalty (Hosseini and Ahmadi Nejad, 2009). Thus, additional studies are
required on the relationship between customer satisfaction and brand loyalty. Therefore, the
following hypothesis is proposed:
H6. Customer satisfaction positively influences brand loyalty.
3.2.7 Mediating effect of customer satisfaction. Murray and Howat (2002) examined the
relationship between perceived quality and brand loyalty with customer satisfaction as a
mediator. They concluded that satisfaction has a direct and favourable effect on loyalty.
Alexandris et al. (2004) also supported the mediating effect of satisfaction in the
relationship of perceived quality and loyalty. Chiou et al. (2002) concluded that trust
positively influences customer satisfaction, which results in an increased level of loyalty.
Perceived value is a significant contributor to consumers’ repurchase intention (Chang
and Wildt, 1994). Nguyen et al. (2011) stated that perceived quality and loyalty share a
direct and positive relationship. Pappu et al. (2005) concluded that perceived quality is
directly associated with loyalty. As per the identification theory, brand identification
significantly influences brand loyalty (Bhattacharya and Sen, 2003). Libai et al. (2010) also
empirically supported the view that brand identification results in increased brand
loyalty. Therefore, we propose the following hypothesis:
H7. Consumer satisfaction mediates the effect of consumer-based brand equity
dimensions, namely perceived quality, perceived value of cost, brand
identification, trust and lifestyle congruence, on brand loyalty.

4. Research methodology
The current research examines the relationship between customer-based brand equity and
brand loyalty with customer satisfaction as the mediator. This relationship is examined for
the oral care sector with special reference to New Delhi and its adjoining areas. The products
considered in this study include toothpaste (various herbal and tooth-whitening pastes),
toothpowder, mouthwash and dental floss.
Research boundaries:
• Objective boundaries: mediation by customer satisfaction in the relationship of
customer-based brand equity and brand loyalty was studied through five dimensions
which were determined as: perceived quality, perceived value, brand identification,
trust and lifestyle congruence.
• Spatial boundaries: a sample of oral care customers in New Delhi and connecting
areas market.
• Time boundaries: the questionnaire was held in June–September 2018.
4.1 Measurement instrument and questionnaire design Brand equity
For testing the hypotheses, the theoretical model was analysed through structural equation and brand
modelling. A questionnaire was drafted with the help of recognised scales from loyalty
the literature. Minor modifications were made to the scales to suit the research objective.
A five-point Likert scale was used for drafting the questionnaire. Table I presents the
measurement instruments used in the current study.
71
4.2 Data collection and descriptive statistics
For empirical analysis, quantitative design was adopted for this study by using the survey
method. The survey method facilitated data collection from large groups of respondents,
required minimum investment, could be easily used to make generalisations and allowed
numerous variables to be studied (Zikmund et al., 2009).
The target population for the current study was Indian consumers in the National Capital
Region who were familiar with the oral care product category and previously made purchase
decisions related to it. The sampling unit was an individual consumer. A random sample of
35 consumers was considered for pretesting of the questionnaire. This sample also
represented the target consumers for final data collection because the selection criteria for
both samples were the same. Some items in the questionnaire were modified according to the

Items Measurement statements

Brand loyalty 1. I will purchase my current brand next time I purchase from this product category
(Chaudhuri and 2. I plan to continue purchasing my current brand
Holbrook, 2001; 3. I believe the quality of my preferred brand is superior to others
Mols, 1998) 4. I am willing to pay a higher price for brand regardless of similar quality from
competitor
5. I will prescribe this brand to my acquaintance
6. When asked about this product category, the name of my brand comes to mind
immediately
Customer satisfaction 1. My current brand is as good as I expected
(Spreng et al., 1996) 2. My current brand is worth the price I paid for it
3. My needs are entirely fulfilled by this brand
4. My expectations are generally met by this brand
Brand trust (Chaudhuri 1. This brand enjoys my trust
and Holbrook, 2001) 2. I can rely on this brand as it is mainly concerned with consumer’s interest
3. I consider this brand as honest brand
4. I consider this brand as safe for consumption
Perceived value of cost 1. My current brand offers attractive cost of product in comparison with alternative
(Walsh et al., 2014) options
2. My current brand charges justly in comparison with similar brand
3. My current brand delivers me good value for money in comparison with what I
paid and might get from other alternative brands
Perceived quality 1. The current brand I use is of consistently high quality
(Yoo et al., 2000) 2. My current brand is likely to have an extremely high
3. The likelihood of functionality of my current brand is quite high
4. The likelihood of reliability of my current brand is quite high
5. My current brand must be of very good quality
6. My current brand appears to be of very good quality
Brand identification 1. While talking about my current brand I prefer to use “we” rather than they
(Mael and Ashforth, 2. I would be embarrassed if media criticises my current brand Table I.
1992) 3. I felt like a personal insult when others criticise my current brand Measurement
Lifestyle congruence 1. My personal lifestyle is reflected by this brand instruments used in
( Johnson et al., 2006) 2. My lifestyle is in congruence with this brand the questionnaire for
3. My current lifestyle is well supported by this current brand various variables
SAJBS inputs received after pretesting. Moreover, the sequence of the questionnaire was changed
9,1 according to the consumer familiarity with the dimensions considered in the current study.
The consumers were more familiar with the aspects of cost and quality compared with other
dimensions, such as lifestyle congruence and brand identification. The aim of the selected
questionnaire sequence was to proceed from simple to complex aspects for maintaining the
interest and attention of the respondents. A total of 300 questionnaires were circulated
72 through convenience sampling method and self-selection via the personal contacts of the
researchers. Of the 300 questionnaires, 250 were used for further analysis (response rate of
83.33 per cent). The questionnaire was administered by the field investigator in New Delhi and
its adjoining areas. The investigator resolved the queries of the respondents with regard to the
statements in the questionnaire and then collected the filled questionnaires. The data were
collected during a four-month period from June to September 2018.
The respondents consisted of 55 per cent males and 45 per cent females. The majority of
the respondents belonged to the age group of 36–45 years (38 per cent of the total
respondents), followed by the age group of 21–35 years (34 per cent of the respondents).
Only 9 per cent of the respondents were above 45 years of age, and 19 per cent were
18–21 years of age (Table II). Most of the respondents were working professionals.

4.3 Common method bias

It is advisable to examine the biasness in data before assessing the reliability and validity,
i.e., psychometric properties. Herman’s single factor was adopted for measuring biasness as
it is broadly accepted for assessing CMB. Exploratory factor analysis was executed for the
calculation of CMB, if a single factor accounts for maximum variance then CMB is assumed
to exist. Variance explained is 35.817 per cent which is less than the acceptable limit of
50 per cent as suggested by Harman (1976), thus predicting that data are free from any
biasness. Confirmatory factor analysis (CFA) on Harman’s Single factor test was also
conducted, as it not only provides model fit but also shows discrepancies through χ2
difference in a single factor model and a multi-factor model (Craighead et al., 2011). Model fit
indices of the multi-factor model are better in comparison to the single factor model as
depicted from Table III; thus, we can conclude absence of CMB in data. Byrne (2013)
supported that data are free from biasness if index difference is more than 0.001; thus,
concluding data are fit for reliability and validity check.

Descriptive statistics %

Gender
Male 55
Female 45
Marital status
Married 37
Unmarried 63
Age group
18–21 38
22–35 34
36–44 19
Above 45 9
Education
Graduate 38
Under graduate 24
Table II. Post graduate 36
Descriptive statistics Other 2
Indices for model fit Multi factor One factor Δ
Brand equity
and brand
CMIN 748.248 4,788.376 4,040.13 loyalty
df 356 377 21
CMIN/df 2.102 12.701 10.599
AGFI 0.806 0.254 0.552
GFI 0.841 0.353 0.488
IFI 0.943 0.362 0.581 73
NFI 0.897 0.344 0.554
CFI 0.943 0.359 0.584
RMR 0.040 0.207 −0.167 Table III.
RMSEA 0.067 0.217 −0.15 Harman’s
Source: Author’s calculation single factor test

5. Analysis and result

Validated tools and procedures were employed for the examination of collected data.
Exploratory factor analysis was carried out in SPSS followed by CFA and path analysis for
the confirmation of findings, and lastly mediation effect of variables was investigated in
AMOS (20) software. The results are depicted below in the following sections.

5.1 Assessment of reliability measure

Each measurement item and construct should be examined for the assessment of reliability
(Fornell and Larcker, 1981). Cronbach’s α was used for measuring the reliability of construct
as it is a measure for the internal consistency of items (Cronbach, 1951). The obtained values
as shown in Table IV are more than the acceptable limit of 0.7 (Nunnally, 1978). Overall, the
value for reliability coefficient was observed as 0.931. Reliability of each measurement item
is the square of its standardized loading. For the assessment of reliability of construct SMC
is used, and values of SMC (Table IV ) are higher than the threshold limit of 0.30 (Bagozzi
and Yi, 1988). Thus, reliability coefficients for all construct and internal consistency of items
were good and appropriate for research purposes.

5.2 Exploratory factor analysis

For examining the appropriateness of data for factor analysis, Kaiser–Meyer–Olkin (KMO)
measure of sampling adequacy and Bartlett’s test of sphericity needs to be assessed. KMO is
used to check the suitability of data for factor analysis. KMO value is calculated as 0.878,
which meets the cut off criterion of 0.60. (Kaiser and Rice, 1974). Bartlett’s test of sphericity
indicates the relation between variables. Significant value is calculated as 0.000, which is
less than 0.05; hence, the given factors are considered as zero correlated.
Under factor analysis, principal component analysis and varimax rotation in SPSS 20.0,
were employed to reveal the close relationship between various items. On the basis of
eigenvalues 1 and above, seven factors comprising 29 items were extracted. These seven
factors explained around 83 percentage of variance in variables. The communalities
extracted were higher than 0.5 indicating appropriateness of data for factor analysis
(Stewart, 1981). Mean, standard deviation and squared multiple correlation are also depicted
in Table IV below. The underlying structure of the measurement items incorporated in
study is confirmed with the help of EFA.

5.3 Confirmatory factor analysis

For assessing the dimensionality and adequacy of the measurement model, CFA was used
by using AMOS 20. CFA is applied to all the seven constructs: perceived quality, perceived
SAJBS Construct Item Mean SD Factor loading λ SMC KMO α
9,1
Perceived quality PQ1 3.99 1.024 0.869 0.755 0.919 0.953
PQ2 4.00 0.992 0.932 0.869
PQ3 3.96 1.060 0.868 0.753
PQ4 4.08 1.067 0.871 0.759
PQ5 4.02 1.006 0.842 0.708
74 PQ6 4.02 0.971 0.887 0.786
Perceived value of cost PV1 3.81 1.141 0.912 0.832 0.762 0.925
PV2 3.74 1.144 0.906 0.821
PV3 3.79 1.191 0.874 0.764
Brand identification BI1 4.02 1.026 0.924 0.853 0.750 0.912
BI2 3.91 1.072 0.887 0.787
BI3 4.10 1.035 0.883 0.694
Brand trust BT1 3.67 1.164 0.954 0.909 0.854 0.945
BT2 3.42 1.201 0.834 0.695
BT3 3.74 1.178 0.871 0.759
BT4 3.71 1.147 0.940 0.884
Lifestyle congruence LSC1 3.67 1.093 0.892 0.796 0.765 0.925
LSC2 3.83 1.187 0.905 0.819
LSC3 3.89 1.128 0.895 0.801
Customer satisfaction CS1 3.99 0.925 0.879 0.772 0.856 0.920
CS2 3.92 0.966 0.878 0.771
CS3 3.94 1.039 0.875 0.776
CS4 3.99 0.955 0.817 0.667
Brand loyalty BL1 3.85 1.091 0.872 0.761 0.918 0.943
BL2 3.87 0.967 0.855 0.731
BL3 3.81 1.076 0.864 0.747
BL4 3.84 0.990 0.825 0.680
BL5 3.86 1.026 0.875 0.766
BL6 3.84 1.110 0.857 0.735
Table IV. Notes: Factor loadings above 0.5 are acceptable (Hair et al., 1995); SMC stands for squared multiple
Result of factor correlation should be above 0.30 (Bagazzi and Yi, 1988); 70 per cent or higher values for Cronbach’s α are
extraction acceptable (Nunnally, 1978); KMO value are greater than acceptable limit of 0.6 (Kim and Mueller, 1978)

value of cost, brand identification, lifestyle congruence, brand loyalty, brand trust and
customer satisfaction.
5.3.1 Validity measure. Convergent validity is how many different procedures of
evaluating a variable give a similar result, i.e., it measures whether items present in a
construct are related or not ( John and Benet-Martínez, 2000). Three approaches are present
for ensuring convergent validity of data: communalities should be higher than 0.5; value of
SMC coefficient should be higher than 0.5 and lastly the value of composite reliability and
average variance explained is required to be greater than 0.7 and 0.5, respectively (Hair et al.,
2012). As depicted in Table IV each standardized loading was more than 0.5 and thus
statistically significant. Adequate convergent validity is represented in data as CR and AVE
were above acceptable limits. The value of CR ranges from 0.913 to 0.953, as depicted in
Table VI, and AVE was also above the acceptable limit of 0.5, ranging from 0.7 to 0.8.
5.3.2 Discriminant validity. Strong discriminant validity shows that no correlation exists
between different factors of the model. It reveals the uniqueness of the factors. Two methods
are generally used by researchers for ensuring the discriminant validity of the measurement
model: pairwise construct comparison method and comparison of shared variance between
factors (Bagozzi and Yi, 1988; Kesharwani and Tiwari, 2011; Fornell and Larcker, 1981).
First method: for seven factors, we compared all 21 possible pairs with their respective χ2
value of full model with the collapsed model. One pair of factor was constrained with one
correlation in the collapsed model. For ensuring discriminant validity the change in χ2 value Brand equity
should be more than 4 (Kesharwani and Tiwari, 2011). Results of χ2 value change are and brand
depicted in Table V below, and hence assuring that free model is a better fit. loyalty
Second method: a comparison of correlation among factors with square root of AVE for
ensuring discriminant validity was suggested by Fornell and Larcker (1981).The diagonal
value (square root of average variance explained) should be greater than non-diagonal
values (correlation between construct) (Kesharwani and Tiwari, 2011). Table VI shows that 75
the value of AVE is greater than the maximum shared variance (MSV ) for all the latent
variables and diagonal values are more than the non-diagonal value, thus ensures
discriminant validity for the construct.
Covariances among factors are free to vary covariance between one pair of factor F1 and
F2 is constrained to 1 (Figure 2).

Constrained path χ2-value Change

Unconstrained path 748.243 (356) –

PQ↔BL 793.699 (357) 45.456
PQ↔BT 807.608 (357) 59.365
PQ↔CS 785.755 (357) 37.512
PQ↔LSC 831.458 (357) 83.215
PQ↔BI 838.674 (357) 90.431
PQ↔PV 783.863 (357) 35.62
BL↔BT 798.811 (357) 50.568
BL↔CS 794.827 (357) 46.584
BL↔LSC 802.606 (357) 54.363
BL↔BI 832.238 (357) 83.995
BL↔PV 771.329 (357) 23.086
BT↔CS 786.617 (357) 38.374
BT↔LSC 783.204 (357) 34.961
BT↔BI 800.498 (357) 52.255
BT↔PV 785.313 (357) 37.07
CS↔LSC 807.850 (357) 59.607
CS↔BI 827.927 (357) 79.684
CS↔PV 772.981 (357) 24.738 Table V.
LSC↔BI 802.347 (357) 54.104 Discriminant validity
LSC↔PV 804.228 (357) 55.985 (comparison of χ2
BI↔PV 820.850 (357) 72.607 difference)

CR AVE MSV ASV BI PQ BL BT CS LSC PV

BI 0.913 0.778 0.076 0.033 0.882

PQ 0.953 0.772 0.379 0.147 0.125 0.879
BL 0.944 0.736 0.260 0.129 0.091 0.437 0.858
BT 0.945 0.812 0.165 0.086 0.218 0.238 0.229 0.901
CS 0.921 0.744 0.379 0.203 0.191 0.616 0.436 0.406 0.863
LSC 0.925 0.805 0.114 0.072 0.275 0.154 0.271 0.337 0.316 0.897
Table VI.
PV 0.925 0.805 0.348 0.160 0.108 0.466 0.510 0.283 0.590 0.210 0.897 Discriminant validity
Notes: Convergent validity: CR should be above 0.7 (Hair et al., 2012); Convergent validity: AVE should be measurement index
above 0.5 (Hair et al., 2012); Discriminant validity: MSV should be less than AVE (Fornell and Larcker, 1981); (Pairwise construct
Discriminant validity: diagonal values are more than non-diagonal values (Kesharwani and Tiwari, 2011) comparison)
SAJBS Covariances among factors are free to vary Covariance between one pair of factor F1 and
F2 is constrained to 1
9,1
1 1
e3 X1 e3 X1

1 1
e2 X2 F1 e2 X2 F1
1 1
1 1
e1 X3 e1 X3
76 1

1 1
e6 X4 e6 X4
1 1
e5 X5 F2 e5 X5 F2
1 1
1 1
e4 X6 e4 X6

1 1
e9 X7 e9 X7
Figure 2.
Discriminant 1
F3 e8
1
X8
e8 X8 F3
validity (Full vs 1 1
Collapsed Model) 1 1
e7 X9 e7 X9

5.4 Overall fit for the model

Model fit indices for measurement and structural model is provided below in Table VII.
For measurement model, key model statistics represents that all the latent factor
modelled simultaneously, with CMIN (Σ2) ¼ 748.248, Degree of freedom (df ) ¼ 356, CMIN/
df (Σ2/df ) ¼ 2.102, p o 0.05, goodness-of-fit indices (GFI, AGFI, NFI, IFI, CFI) and
badness of fit measurement indices (RMR, RMESA, ECVI). The result of the structural
model shows CMIN/df (Σ2/df ) as 2.817, GFI ¼ 0.830, AGFI ¼ 0.805, RMR ¼ 0.060,
RMSEA ¼ 0.069.
Goodness-of-fit measurement indices suggested that there is a high confirmation of
uni-dimensionality in the measurement model (Byrne, 2013) whereas badness of fit
measurement indices that reflect the discrepancy in model fit. The current study is in
congruence with opinion of Schreiber (2008), McDonald and Ho (2002), Boomsma (2000) for
the assessment of model fit. Most of the fit indices are met, whereas GFI is closer to the
threshold limit. Still, the necessary requirements of above 0.8 are met by all the indices
(Baumgartner and Homburg, 1996; Doll et al., 1994).

Model fit Cut off limit Model statistics (measurement) Model statistics (structural)

1. CMIN – 748.248 1,044.944

2. df – 356 371
3. CMIN/df ⩾4.00 2.102 2.817
4. GFI ⩾0.900 0.841 0.830
5. AGFI ⩾0.800 0.806 0.805
6. NFI ⩾0.900 0.897 0.890
7. IFI ⩾0.900 0.943 0.903
8. CFI ⩾0.909 0.943 0.932
9. RMR ⩽0.100 0.040 0.060
10. RMSEA ⩽0.80 0.067 0.069
Table VII. 11. ECVI Smaller the better 3.641 3.850
Model fit indices Source: Author’s calculation
5.5 Path coefficient for structural model Brand equity
The structure model was evaluated using AMOS 20.0 after the estimation of psychometric and brand
properties. The results indicated that all hypothesis were found to be significant, except H3, as loyalty
p value is greater than 0.05. Hence, Brand identification had an insignificant relationship with
customer satisfaction (H3: β ¼ 0.032, p ¼ 0.399). One of the reasons for H3 insignificance is
that the current study pertains to low-involvement category as brand identification with
customers gradually builds over a period of time as time in search of alternatives, amount and 77
utilisation period invested by customer is quite low in comparison with high-involvement
category. Second, brand identification includes affective attachment to the brands; customers
who are highly identified with brand value transaction with brand as more desirable. In
low-involvement category, affection with brand may be less as focus is more on functional
benefits derived from product. Perceived quality and perceived value of cost share a
significant relationship with customer satisfaction. Lifestyle congruence also have a direct
relationship with customer satisfaction (H5: β ¼ 0.107; P ¼ 0.005). Customer satisfaction
shares a direct and significant relationship with brand loyalty in low-involvement product
category (β ¼ 0.526, po0.001) as shown in Table VII (Table VIII and Figure 3).

5.6 Test of the mediation effect

The approach of Preacher and Hayes (2008) was adopted for testing the mediation
hypothesis due to its technical superiority over other methods such as the approach of
Baron and Kenny (1986) and the Sobel test (Sobel, 1982). The methods of Baron and Kenny
(1986) and Sobel (1982) are based on the tenuous assumption that the indirect effect (ab[1])
is normally distributed, which is impossible even when even the variables involved
(a and b) are normally distributed (Edwards and Lambert, 2007). On the other hand, the
process method examines the indirect effect between independent and dependent
variables through the bootstrapping technique (Mooney et al., 1993). With the application
of bootstrapped confidence intervals (CIs), the problem of non-normal sampling
distribution can be avoided (MacKinnon et al., 2004). However, only simple mediation

Hypothesised relationship Path estimate SE CR p Result

H1: CS←PQ 0.400 0.045 8.957 *** Supported

H2: CS←PV 0.282 0.038 7.335 *** Supported
H3: CS←BI 0.032 0.038 0.843 0.399 Not Supported
H4: CS←BT 0.129 0.033 3.860 *** Supported
H5: CS←LSC 0.107 0.038 2.784 0.005 Supported
H6: BL←CS 0.526 0.063 8.279 *** Supported
Notes: *p o0.10; **p o 0.05; ***p o 0.001 Table VIII.
Source: Author’s calculation Results

PQ 0.4***

0.282***
PV

0.032 0.53***
BI CS BL
0.13***
BT
0.11*** Figure 3.
LSC Result
SAJBS can be tested through this approach. Multiple mediators and multistep mediation must be
9,1 tested independently, which results in an increased value of the indirect effect coefficients
and Type 1 error (Preacher and Hayes, 2008).
Table IX presents the estimates for the total, direct and indirect effects with 95%
bias-corrected bootstrapped CIs. For Model 1, customer satisfaction partially mediates the
path from perceived value to brand loyalty. This hypothesis is supported by the b and
78 confidence interval values of the total effect (b ¼ 0.5, 95% CI ¼ 0.4, 0.59), direct effect
(b ¼ 0.38, 95% CI ¼ 0.25, 0.5) and indirect effect (b ¼ 0.11, 95% CI ¼ 0.02, 022). For Models 2
and 3, customer satisfaction fully mediates the path from lifestyle congruence and brand
trust, respectively, to brand loyalty. The effect of other variables becomes insignificant after
the inclusion of customer satisfaction. For Model 4, customer satisfaction partially mediates
the path from brand perceived quality to brand loyalty, as indicated by the b and CI values
for the total effect (b ¼ 0.5, 95% CI ¼ 0.38, 0.62), direct effect (b ¼ 0.29, 95% CI ¼ 0.14, 0.45)
and indirect effect (b ¼ 0.2, 95% CI ¼ 0.08, 0.34).

6. Discussion and conclusion

The aim of the current study is to investigate the mediating effect of customer satisfaction
on the relationship between the dimensions of customer-based brand equity and brand
loyalty for the low-involvement product category. This topic has not received sufficient
attention from researchers. This study concludes that customer satisfaction has a
significant and positive effect on brand loyalty. Customer satisfaction fully mediates the
path from lifestyle congruence and brand trust to brand loyalty. Furthermore, customer
satisfaction partially mediates the path from perceived quality and perceived value to brand
loyalty, which indicates the importance of functional benefits for the customer. Finally,
brand identification has an insignificant relationship with brand loyalty.

6.1 Theoretical implications

This study provides new insight by developing a parsimonious model on brand equity and
brand loyalty for the low-involvement product category by considering customer
satisfaction as a mediator. The literature on consumer behaviour is enriched in following
ways: coefficient of the relationship between the independent variable and the mediator, and
coefficient of the relationship between the mediator and the dependent variable.
First, the current study empirically supports the existence of a relationship among
customer-based brand equity, loyalty and customer satisfaction. Although literature
supported that brand equity has a positively influences brand loyalty, this hypothesis has
not been empirically examined. Second, the current study concludes that perceived quality,
perceived value of cost, brand trust and lifestyle congruence have significant and positive
effects on customer satisfaction; however, brand identification has insignificant effect.
This study also concludes that perceived quality is the most significant factor that
influences customer satisfaction, followed by the perceived value of cost. Perceived quality

Model 1 Model 2 Model 3 Model 4

(PV→CS→BL) (LSC→CS→BL) (BT→CS→BL) (PQ→CS→BL)
b LL Ul b LL Ul b LL Ul b LL Ul

Total effect 0.5 0.40 0.59 0.003 −0.12 0.12 0.20 0.10 0.30 0.5 0.38 0.62
Direct effect 0.38 0.25 0.5 −0.79 −0.19 0.03 0.04 −0.06 0.14 0.29 0.14 0.45
Table IX. Indirect effect 0.11 0.02 0.22 0.08 0.01 0.15 0.16 0.08 0.24 0.2 0.08 0.34
Test of the Notes: *po 0.10; **p o0.05; ***p o0.001
mediation effect Source: Author’s calculation
and value of cost indicate the functional consumption aspect and lifestyle congruence Brand equity
indicates the symbolic aspect of brand equity. Furthermore, to retain and satisfy a customer, and brand
brand trust also plays a critical role in the low-involvement product category. loyalty
The relationship between brand trust and customer satisfaction was found to be
significant. Brand identification was removed from the model due its insignificant effect.
Consumers focus more on quality and value benefits derived rather than personal
identification with the brand in low-involvement product category. We conclude that 79
consumers purchase low-involvement products not only on the basis of habit but also due to
functional benefits derived from the brand. Third, the current study confirms the mediating
effect of customer satisfaction, i.e., customer satisfaction fully mediates the effect of brand
trust and lifestyle congruence on brand loyalty. Finally, this study contributes to the
existing literature by predicting brand loyalty with the help of customer satisfaction in
the low-involvement product category. The conclusions of the current study conform to the
findings of Nam et al. (2011), Lei and Chu (2015) and Shen and Luo (2013).

6.2 Managerial implications

Due to the influx of international players and the introduction of new product categories, the
oral care sector has turned to be extremely competitive and marketers are moving
aggressively to attract customers by offering attractive promotions and services.
Consequently, marketers must take necessary steps to satisfy customers for retaining a
loyal customer base. First, managers are required to pay more attention to enhance the
attached product attributes of the brand and institute uniqueness for differentiating the
brand from competitors, thereby enhancing functional utility. As per the current study, in
the low-involvement product category, perceived quality and perceived value of cost have a
higher influence on customer satisfaction than other dimensions of brand equity do. The
relationship of perceived quality and perceived value with brand loyalty is partially
mediated by customer satisfaction. In other words, these dimensions still have a significant
relationship with brand loyalty even after the mediating effects of customer satisfaction are
considered. Thus, a customer focuses more on the functional benefits derived from a brand
than the symbolic benefits. Growing awareness regarding the side effects of fluoride has
resulted in the introduction of herbal and natural-ingredients-based toothpastes by
competitors. Major players are also focussing on advancing oral solutions for consumers.
Second, the product involvement category of a brand is an important variable in the
measurement of brand equity because the results for the low- and high-involvement product
categories may vary considerably. Thus, marketing strategies should be developed
according to the product category. The current study proves that customers are not merely
habitual buyers. They purchase products according to the attached functional attributes.
The higher the perceived value, the higher is the perceived quality and the higher is the
price premium, which further increases brand equity. Consumer satisfaction increases as
brand equity increases, which eventually leads to increased brand loyalty.
In today’s transparent world, truly ethical behaviour is the prerequisite for success in
business as it helps in developing trust among customer. Positioning the brand as
trustworthy by offering stronger guarantees would increase brand trust and customer
satisfaction, this would positively impact brand loyalty. Thus, it will facilitate customer
retention, secured future purchase and encourage recommendation. Managers are required
to boost true ethical behaviour that is transmitted to customers and various stakeholders.
Under this dimension, brand will become an experience. Finally, the fact that the various
dimensions of brand equity share different relationships with brand loyalty may help
marketing managers to allocate resources more efficiently and effectively. The results of
this study provide important insights to brand managers for justifying the spending of
marketing resources on building a loyal customer base.
SAJBS Overall, it can be deduce that marketers gain consumer’s loyalty only when trust in
9,1 brand prevails and consumer perceives brand to have exceptional quality and value in
comparison with its competitors.

6.3 Development of brand loyalty matrix

The following presented framework (Figure 4) shows two dimensions: brand functional
80 benefit (perceived quality and perceived value of cost) and brand loyalty. Consumers who are
characterised as “high” on brand functional benefits and brand loyalty are termed as “true
loyal”. These customers are the core and most significant base of purchasers for any company.
They perceive that brand provides high quality and value which no other competitor can
provide. These customers will stick with the brand even in troubled times. This loyalty should
be reinforced with clear communication of benefits and managers should reward these
customers via promotional programmes, discounts, innovative sales programmes. Customers
who are “high on loyalty” but “low on brand functional benefits” are termed as “Inertia Loyal”.
This category perceives that purchase is not a very crucial activity. These customers are not
motivated enough to reorganise their decision-making process despite consciously being
aware that brand is low on functional benefits. They purchase due to habits, may be
internalised brand association or to save time and energy. Thus, for shifting this category to
true loyal, managers are required to increase their visibility in inertia loyal group by
advocating brand functional benefits, increasing brand trust by advocating brand credibility
and recommendation of peers, strengthening the consumer-brand relationship. “Complex”
consumers are those who are high on brand functional benefits but low on brand loyalty.
These consumers perceive brand to have high functional benefits but purchase less often in
comparison with true loyal. Repurchase could be less due to variety seeking behaviour. Thus,
managers are required to launch brand variants. “Switchers” are low on both brand loyalty
and brand functional benefits. This category is price conscious and consumers may switch
frequently due to sales promotions, discounts and other deals offered by competitors.

7. Limitation and future scope

The selection of sample is limited to New Delhi and connecting area. However, to enhance
the generalisability of the findings more data can be collected from different regions of
India. Study can be replicated in different culture, as findings may provide different
outcome. To conclude, a much larger sample and more diverse respondents will help in
yielding a more in-depth analysis using method which is both economical and effective.
Reverse causality is always a possibility, i.e., the study suggested that brand equity leads
to brand loyalty but it is also possible that continuous brand loyalty may also result in
brand equity. In terms of the methodology data were collected for only care segment
including toothpastes, mouthwash and powder; a wider study including extensive range
of the product category can be incorporated for low-involvement segment. Antecedents of
perceived quality and value of cost can be further analysed by researchers for a more
comprehensive picture.

Brand Loyalty
High Low
Brand

High True Loyal Complex

Functional
Figure 4.
A contemporary
Low Inertia Loyal Switchers
brand loyalty matrix Benefit
Note Brand equity
1. (a) coefficient of the relationship between the independent variable and the mediator; (b) coefficient and brand
of the relationship between the mediator and the dependent variable loyalty

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Corresponding author
Sonia Kataria can be contacted at: soniakataria1@gmail.com

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