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Customer-based brand equity, equity drivers, and customer loyalty in the supermarket industry

Arthur W Allaway .
The University of Alabama, Tuscaloosa, Alabama, USA

Patricia Huddleston and Judith Whipple
Michigan State University, East Lansing, Michigan, USA, and

Alexander E. Ellinger
The University of Alabama, Tuscaloosa, Alabama, USA
Abstract Purpose – The purpose of this paper is to measure consumer-based brand equity in the supermarket industry and to identify the strategy drivers associated with levels of brand equity for consumers’ typically patronized supermarkets. Design/methodology/approach – A nine state survey of consumers was conducted to provide brand equity ratings of 22 national, regional, and specialty supermarket brands. Findings – Factor analysis yields two brand equity outcome dimensions and eight brand equity drivers. A large proportion of consumers clearly have strong feelings about the supermarkets they patronize, and that effort expended in keeping customers, service level, and product quality and assortment appear to be basic requirements for achieving high levels of consumer-based brand equity. The top supermarket brands typically score highly on at least one other key driver of equity. Supermarket brands that use formal loyalty programs to drive patronage in general have lower levels of customer-based brand equity. Research limitations/implications – Selection of designated supermarkets was limited by spatial distribution in the geographic area. The sample is more affluent and educated than the general US population. Practical implications – As retailers search for ways to compete more effectively for consumer dollars and loyalty, they need to explore in more detail the customer-based brand equity and the drivers of customer equity associated with their retail brands. Originality/value – This paper is the first to link consumer-based brand equity and the supermarket branding efforts that drive it for specific retail brands. In an industry with numerous choices in nearly all market areas and low switching costs, successful branding can translate into emotional commitment, shopping loyalty, and even person-to-person promotion of the brand to others. Keywords Brand equity, Supermarkets, Surveys, Factor analysis, Brand management, United States of America Paper type Research paper

An executive summary for managers and executive readers can be found at the end of this article.

Introduction
One of the most visible themes in the marketing literature in recent years has been a merging of the research streams linking consumer-based brand equity, customer equity, and loyalty. Customer-based brand equity involves the set of memory-based associations to a particular brand that exist in the minds of consumers (Keller, 2003). Customer equity is defined as the value of the customer to the brand (Rust et al., 2004; Blattberg and Deighton, 1996). Both brand equity and customer equity emphasize the importance of customer
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loyalty (Leone et al., 2006). Customer loyalty generates numerous benefits for a brand and is a focus of increasing numbers of marketing strategies (Jacoby and Chestnut, 1978). Customers who are loyal to a particular brand buy more, are willing to pay higher prices and generate positive word of mouth (Reichheld, 1993; Wright and Sparks, 1999; Zeithaml et al., 1996). Nowhere is the merging of these research streams more evident than in retailing. Customer loyalty is a critical goal for retailers because of an increasingly competitive retail environment and low customer switching costs (Wallace et al., 2004). The rise of the retailer as a brand is one of the most important trends in retailing (Grewal et al., 2004). Successful retail branding can be extremely important in helping influence consumer perceptions and drive store choice and loyalty (Ailawadi and Keller, 2004).

Customer relationships and the supermarket industry
The retail grocery industry in the US is a $500 billion dollar industry, and has been the subject of extensive research over the history of the marketing literature. Indeed, much of the 190

Journal of Product & Brand Management 20/3 (2011) 190– 204 q Emerald Group Publishing Limited [ISSN 1061-0421] [DOI 10.1108/10610421111134923]

equity drivers. we pose the following research questions: . Are there identifiable dimensions of customer-based brand equity in the supermarket industry? . and specialty supermarket chains. Do national supermarket chains have high. Customer-based retail brand equity involves a “shortcut” in the minds of consumers that recalls from memory the most salient positive elements of satisfaction with past shopping experiences and goods purchased. cross-category assortment. 2004).. are there also identifiable drivers of customer-based brand equity in the supermarket industry? . and community involvement. location. However. (2004) identify a range of items associated with customer service. and specialty supermarket chains.Customer-based brand equity. regional. the supermarket industry is experiencing a period of significant change. the relationships among consumers and their grocery stores are among the most ubiquitous and visible in society. Gomez et al. store layout. and personal factors. which supermarket brands have earned the highest levels of customer-based brand equity? . 2004). and value that drive customer satisfaction in the supermarket sector. Keller and Lehmann (2006) call for further research in branding which ties “what companies do” to “what customers think and feel about the brand” and “what customers do” with respect to the brand. and withincategory assortment) that form the basis for their measures of 191 Research methodology Targeting the dimensions of retail strategy discussed above. In addition. Ailawadi and Keller (2004) identify five main dimensions of store image (access. Consumers then react to these store branding efforts over time by building up sets of shortcut feelings about the store that influence their behaviors toward the brand and its competitors in a market. and promotion decisions which are experienced in the stores by consumers. At a finer degree of detail. marketrelevant factors such as the service provided by the store. or similar levels of customer-based brand equity compared to regional chains and specialty grocery chains? . price and promotion. although loyalty programs are spreading across the grocery landscape loyalty card programs do not seem to yield results in terms of increased loyalty (Bellizzi and Bristol. which has “reshaped the supermarket experience” (Reyes. low. the entire field of market segmentation is based on the fact that there will be different groups of consumers who are driven by different combinations of brand factors. a Likert scale-based questionnaire based on standard research procedures (Churchill. product. In the grocery industry. In fact. quality. product assortment. The store patronage. which involves the daily implementation of the marketing message through numerous service. consumer-based retail brand equity. in-store atmosphere. 2007). Respondents were given the opportunity to rate a conventional . promotion. they need to explore in much more detail the customer-based brand equity and the drivers of customer equity associated with their retail brands. One response among traditional supermarket chains to the increased competition from supercenters and specialty supermarkets has been the creation of customer-centered marketing efforts such as loyalty card programs. literature. 2004). loyalty programs. If so. and adapted to a grocery setting. Specifically. What is the relationship between customer-based brand equity and patronage? Drivers of supermarket brand equity Researchers are relatively consistent about the basic dimensions of retail strategy that underlie the building of successful relationships between customers and their retail brands. Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 literature that forms the theory base of marketing was generated by research done in the grocery industry. A 2007 IBM survey found that nearly half of grocery customers carry a negative attitude toward their grocer (Kleinberger and Badgett. Different combinations of equity drivers may be the key that can allow specific supermarkets to identify their own unique sources of distinct competency to mitigate the effects of competition and survive. which in turn influences future patronage and minimizes the potential influence of competitor efforts (Ailawadi and Keller. Customer-based brand equity for supermarkets As grocers search for ways to compete more effectively for consumer dollars and loyalty. and that there can be similar total levels of customer-based brand equity across retail brands in a category for very different reasons. . product quality. Pan and Zinkhan (2006) categorize patronage-driving characteristics into productrelevant factors such as product quality and price. and strategy literatures all yield potential drivers of supermarket brand equity. In addition. are there differences in the drivers of customerbased brand equity which provide a source of specific competitive advantage for certain brands? . price. and customer loyalty Arthur W Allaway et al. loyalty. Supermarkets offer a variety of goods and services simultaneously so that the “shopping experience” can be as important to the customer as differences in the physical characteristics of the goods (Gomez et al. brand and customer equity. With the average consumer visiting a grocery store more than once every week. 2005). we search for levels of customer-based brand equity and the particular drivers of brand equity associated with specific national. Among national regional. 2007). While there may be universal drivers of equity. customer-based brand equity is the result of a supermarket chain’s total brand-building efforts over time. Actions that retail firms take to improve their brand equity for consumers include customer service training of personnel. 1979) was developed from previously validated scales. The survey was pretested among graduate students and academicians familiar with food store retailing and items that were confusing or unnecessary were eliminated. one of the strongest brand images in the grocery industry currently belongs to Whole Foods Market. pricing. There has been a high level of consolidation of brands in the industry as well as a dramatic rise in competition for traditional supermarkets from supercenters such as Wal-Mart and Target and specialty stores such as Whole Foods Market (Kleinberger and Badgett. Research questions This research is an effort to measure consumer-based brand equity in the supermarket industry and to identify the strategy drivers associated with various levels of brand equity for consumers’ typically patronized supermarkets.

16 regional brands. A total of 659 usable questionnaires were returned providing a response rate of 15 percent. equity drivers. Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 supermarket patronized most often. and customer loyalty Arthur W Allaway et al.500 households.” These variables indicate a level of brand equity such that consumers choose not to even consider shopping at other stores besides their favorite store.” As shown in Table II. and three specialty foods brands. A total of 67 scale items yielded 192 Notes: Eigenvalue: 8.Customer-based brand equity. and 15 percent were over the age of 75.000 per year (39. and that the choice to continue shopping at a particular supermarket involves much more than just location and prices. regional.627 0. Although the Safeway and Albertson’s names brands are now only used in the western region of the US.2 percent). a second distinct outcome factor emerged from the data. Two factors were clearly associated with brand equity and loyalty outcomes. Non-response bias was evaluated using comparisons of early and late responders as recommended by Armstrong and Overton (1977).757 0.699 0. it was included in that group for the analysis. or across the items included in this paper.64.” “I feel loyal to this store.7 percent female. Our sample was also affluent. One of the strongest possible customer relationship variables in use today loads on this factor.9 percent of the variance in the data and loads highly on such variables as “I would not switch from this store under any circumstances.624 0. it accounts for 12. and Randall’s (owned by Safeway) and Ralphs (owned by Kroger) are thought of as regional brands by their customers. For the purposes of this research we assume that regional brands owned by national brands such as Tom Thumb.648 0. To provide an anchor point for assessing the consumerbased brand equity of national. Based on its loadings. The sample was 39. which is “I encourage friends to go to this store. and specialty supermarkets. it accounts for 7. thus. 630 respondents completed the survey with respect to conventional stores.6 percent had a graduate or professional degree. with an average household income of more than $80. It is evident from the findings above that emotion and involvement are important to consumers.571 0. Of that total sample. Interestingly.g. factor analysis was rerun on the entire set of perceptions of the national. The majority of the sample was highly educated: 28.” Based on these findings. this factor was titled “fanaticism. or one of each. These two outcome factors indicate that customer-based brand equity clearly does exist in the supermarket industry.514 Dimensions of customer-based brand equity The conventional supermarket data and the specialty supermarket data were initially subjected to factor analysis separately to explore the structure of the data.744 0. we treat them as national brands because of their past presence in large areas of the nation and the familiarity people have with the names.17 . shopping frequency). two brand equity outcome factors and eight brand equity drivers. Based on its loadings.” “if competitors’ stores are more conveniently located I still shop at my selected store. No significant differences between the respondent groups were found with respect to shopping behaviors (e. Vons’s. regional. and 494 respondents completed the survey with respect to specialty stores – roughly 70 percent of respondents completed the survey with respect to shopping experiences at both types of stores. The results showed that the same factors were associated with consumer equity across store types. .763 0.” and “I am willing to ‘go the extra mile’ to remain a customer of this store.632 0.9 percent had a bachelor’s degree and 41. the first was titled “emotional loyalty. A total of 105 surveys were non-deliverable and ten were deemed unusable.” This factor includes most of the typically used descriptors of desired brand equity outcomes. These characteristics are consistent with the geographic areas from which the sample was drawn.” and “I am very committed to this store. ten significant factors. As Wal-Mart’s customer shopping characteristics matched those of the national chains. and that grocery retailers that tap into those emotions have the opportunity to build much stronger brands than those who simply focus on providing groceries.595 0. A mailing list of US households in ten states was purchased specifically in zip codes where a Whole Foods Market was located.3 percent male and 60.” As shown in Table I.2 percent of the variance in the data and loads highly on a set of variables which include “I care about the long term success of this store. and specialty supermarket brands. The analysis focuses on the brands rather than their ownership. Table I Outcome factor 1 Emotional loyalty I care about the long-term success of this store I have faith in this store This store gives me a feeling of confidence I trust this store I would expend effort on behalf of this store to help it succeed I say positive things about this store to others I am “emotionally attached” to the store I feel loyal to this store I have a sense of belonging to this store I will recommend this store to someone who seeks advice I am very committed to this store I encourage friends to go to this store Factor loadings on original variables 0. Questionnaires were sent to 4. a specialty supermarket patronized most often (among specialty grocery stores).605 0. it appears that the sampled population definitely has strong feelings about loyalty and commitment relative to their supermarkets. demographics. Nearly 34 percent of the sample was between the ages of 35 and 54. Roughly 43 percent were between the ages of 55-74. as several of the regional brands are owned by one of the national brands. about 8 percent were between the ages of 18 and 34. percent of variance explained: 12. we chose to sample consumers where we know that one consistent brand was present in each of their market areas.” “I have faith in this store. Among the 22 chains rated by a sufficient number of respondents for the analysis were three nationally recognized supermarket brands and one supercenter (Wal-Mart).” “I am willing to pay a higher price for the products/services I currently receive from this store.

698 0. Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 Table II Outcome factor 2 Fanaticism I would not switch from this store under any circumstances There are certain products I exclusively purchase at this store no matter what the price is If competitors’ stores are more conveniently located I still shop at my selected store Even if this store were more difficult to reach.644 0. effort expended in keeping customers.522 Notes: Eigenvalue: 6.53 193 . product quality and assortment. equity drivers.05. Drivers of customer-based brand equity involve supermarket strategies aimed at enhancing the shopping experience of their customers in pursuit of consumer loyalty and increased revenue. product quality and assortment. percent of variance explained: 7.578 employees at this store are polite to me. and are ranked by percent of variance explained in the data. Table IV Equity driver 2 Product quality and assortment The products at this store are of high quality The products at this store are very satisfactory compared to other stores This store has good quality merchandise I shop this store because its products are superior to its competitors The store has products that are not available at other stores This store has the right merchandise selection This store is well stocked across its different departments The store offers the assortment of products I am looking for This store has an extensive assortment of products Factor loadings on original variables 0.Customer-based brand equity.590 0.” “this store has friendly employees.639 0.680 0. layout.584 Notes: Eigenvalue: 5. these promotion-centered activities load on a different factor than general price levels.810 0. The first such driver. explains 8.” “this store has good quality merchandise. explains 8. The first set includes variables related to the employees of the retailer (Table III). The following drivers were identified in the factor analysis.600 0.529 0.617 0. The second driver (Table IV). since it impacts hiring and training programs as well as store management decisions and day-to-day employee motivation. and customer loyalty Arthur W Allaway et al. titled “Programs for rewarding patronage. the fact that both of these first factors appear much more important than price is relevant to retailers interested in building brand equity in their customer bases. Interestingly.89 Drivers of brand equity for supermarkets After identifying the two dimensions of customer-based brand equity outcomes. these drivers are named service level.” “the Table III Equity driver 1 Service level This store has helpful employees This store has friendly employees The employees at this store(s) are polite to me This store has an adequate number of employees available to assist me This store is service oriented In general.” and “I shop this store because its products are superior to its competitors. programs for rewarding patronage.709 0. The first.761 0.” “this store offers customers something extra if they keep buying there.9 percent of the variance in the data and is characterized by high loadings on two related sets of very specific service-centered variables. Based on their factor loadings.” and on assortment-centered variables such as “this store has the right merchandise selection.28.5 percent of the variance in the data and is characterized by high loadings on product quality variables such as “the products at this store are of high quality.” and “this store offers an attractive loyalty program” (Table V). I would keep buying there I only buy from my selected store I am willing to pay a higher price for the products/services I currently receive from this store I am willing to ”go the extra mile” to remain a customer of this store Factor loadings on original variables 0.558 0.” and “this store is well stocked across its different departments. location.666 0. The next two drivers of customer-based brand equity for supermarkets deal with the formal and informal programs the retailer has put in place to reward customers for choosing to shop there.813 0.6 percent of the variance in the data and loads highly on such variables as “this store offers rewards (such as future use coupons) to customers for their patronage.60.” Although there are no surprises. I am satisfied with the service offered at this store My shopping experiences at this store have always been pleasant Factor loadings on original variables 0.681 0.710 0.” and “in general.” and “this store has an adequate number of employees available to help me. The second set of closely related variables involves the levels of service offered by the supermarket. and community involvement. These include “this store has helpful employees. . percent of variance explained: 8. I am satisfied with the service offered at this store. prices.” explains 5.” “this store has an extensive assortment of products. the next stage of the analysis is to attempt to identify drivers associated with these outcome dimensions.” Another variable which loads on this service level factor is “my shopping experiences at this store have always been pleasant.667 0. percent of variance explained: 8. specifically “the store is service oriented.85 Notes: Eigenvalue: 6.” “this store offers discounts to customers for their patronage. service level.589 0.664 0.” which appears based on the loadings to be based largely on high levels of customer service.593 0.” This factor has very important implications for retail branding efforts.

851 0.” This relatively low ranking may be related to the generally more affluent demographic areas from which the sample was drawn. and “I am satisfied with the location of this store” (Table IX). Explaining 3. The variables loading on this factor include “I am satisfied with the general price level of merchandise at this store. Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 Table V Equity driver 3 Programs for rewarding patronage This store offers rewards (such as future use coupons) to customers for their patronage This store offers customers something extra if they keep buying there This store offers discounts to customers for their patronage This store offers an attractive loyalty program This store often offers sale items Factor loadings on original variables 0.1 percent of the variance in the data.693 0.536 Table VII Equity driver 5 Prices I am satisfied with the general price level of merchandise at this store This store provides a good value for the money I am satisfied with the price/quality ratio offered at this store Factor loadings on original variables 0.” While these do not appear to be the most important drivers of customer-based brand equity.840 0.” and “this store has a pleasing layout.759 0.795 Notes: Eigenvalue: 2.” explains 5.502 with supermarket evaluation.32. These variables include “this store makes an effort to increase customer loyalty.3 percent of the variance in the data. explaining 3.568 Notes: Eigenvalue: 2.57.685 0. If different supermarket options in an area have Table VIII Equity driver 6 Layout Finding the products I need is easy The width of the aisles at this store allows for easy cart navigation It is easy to locate the different departments within this store This store has a pleasing layout Factor loadings on original variables 0.89. However.” “this store makes various efforts to improve its tie to regular customers.06 194 .795 0. Its relative low ranking as a driver relative to the service and product drivers discussed above is interesting.” “this store provides a good value for the money. titled “Effort expended in keeping customers. would be less tied to consumer-based brand equity than those factors.691 0. quality. percent of variance explained: 5.0 percent of the variance in the data and loads on more informal and intangible variables related to how hard the store tries to build regular ties with its customer base and how satisfied the respondent is with those efforts (Table VI). Since consumers typically have driving access to more than one supermarket brand in their area. location decisions that match market segments of interest with access to the in-store characteristics that build brand equity for those segments are critical to supermarket chain success.672 0. is the prices driver of customer-based brand equity of supermarket brands (Table VII).” and “I am satisfied with the price/quality ratio offered at this store. including “finding the products I need is easy. percent of variance explained: 4.Customer-based brand equity.738 Notes: Eigenvalue: 3.540 0. percent of variance explained: 3. which explains 4. the variables which load highly on the location factor include “this store is located where it can be easily reached”.03 Notes: Eigenvalue: 2. equity drivers.” “the width of the aisles at this store allows for easy cart navigation.758 0.1 percent of the variance in the data.” and “I am satisfied with the relationship I have with this store.819 0.175.” “I am happy with the efforts that this store is making toward keeping me as a customer. It is understandable that the location factor. I have a high-quality relationship with this store Factor loadings on original variables 0. or it may be that customerbased brand equity is more strongly tied to non-price variables more than to price variables. percent of variance explained: 3. The layout factor. . the building of brand equity is the key to making distance less important. as a separate element of the strategy mix from such in-store characteristics as service.866 0. percent of variance explained: 5.599 0.26 Table IX Equity driver 7 Location This store is located where it can be easily reached I am satisfied with the location of this store Factor loadings on original variables 0.650 0. and customer loyalty Arthur W Allaway et al. loads highly on four variables typically associated Table VI Equity driver 4 Effort expended in keeping customers This store makes various efforts to improve its tie to regular customers This store really cares about keeping their customers This store makes an effort to increase customer loyalty I am happy with the efforts that this store is making toward keeping me as a customer I am satisfied with the relationship I have with this store As a regular customer.997. it is still important for retail brand management efforts to keep them in consideration (Table VIII).63 The next factor. and loyalty-enhancing programs and efforts.831 0.” The next factor.07 Notes: Eigenvalue: 3.” “it is easy to locate the different departments within this store.

Wal-Mart follows as the first of the national brands on the emotional loyalty dimension of 195 0. have the potential to serve as the sole supplier of supermarket items for households in their trade areas. For emotional loyalty. interestingly enough. These were named with the same titles as the factors they represent. loyalty. explaining 2. and their size and marketing power. As shown in Table XI. This driver is comprised of the informal and intangible variables related to how hard the store tries to build regular ties with its customer base and how Table X Equity driver 8 Community involvement This store provides benefits to my local community This store offers educational services (i. which is apparently an indicator of different sized zip codes and travel difficulties in different areas. however. On the fanaticism dimension. and customer loyalty Arthur W Allaway et al. Summated scales – brand equity measures and drivers Based on the factor analysis above. On the emotional loyalty dimension. is community involvement (Table X). an ANOVA test shows that the national brand group has far lower scores (p ¼ 0:00) on consumer-based brand equity (3. shows a positive relationship between product quality and assortment and community efforts.” and “this store offers educational services (i.” satisfied the respondent is with those efforts.600 Customer-based brand equity of supermarket brands Table XIII shows the rankings of the supermarket brands rated by the sampled population. Product quality and assortment and service level and community efforts and prices are all positive predictors of emotional loyalty. Trader Joe’s offers a wide range of bulk products. The fanaticism model. Central market is a division of HEB in Texas that offers a similar natural foods-centered concept to Whole Foods Market. since the supermarket brands in each state varied widely. a check on consistency in ratings was performed by testing the mean summated scale scores of Whole Foods Market by state. However.13 . equity drivers. their ability to grow to and keep national stature. although the scores are lower across the board than the emotional loyalty scores. . 124). This appears to lend support to the Bellizzi and Bristol (2004) findings that loyalty card programs do not seem to yield results in terms of increased loyalty.51. cooking classes or other social activities) that I can participate in Factor loadings on original variables 0. distance becomes the only differentiating characteristic.e. We first examine average customer-based brand equity levels of national chain brands versus regional chain brands and specialty chain brands (Table XII). The variables which load highly on this factor include “this store provides benefits to my local community. based on their name recognition. two specialty supermarkets rank first and second.31) and regional (2. but not. If ratings of Whole Foods differ significantly by state. Then. willingness to travel further. Following Whole Foods Market in the number six spot are two more regional chains. and willingness to recommend the brand to a friend. While not a critical driver of brand equity for supermarkets. The national brands. in addition to the efforts driver.. Customer-based brand equity of supermarket types Our next set of analyses examines how the levels of customerbased brand equity vary across supermarket types and brands. should be expected to have strong scores on consumer-based brand equity.05) across the states. However.34) or the specialty chain group (3. 2010.Customer-based brand equity. the location dimension. Predictive modeling of customer-based brand equity outcomes We employ a stepwise regression model to investigate the relationship between customer-based brand equity outcomes and the strategy-based equity drivers. These scale items tap into consumer feelings of trust. Following those two are three dominant regional supermarket brands. Tom Thumb is the first brand on the list that is owned by a national chain. and unwillingness to switch. commitment.606 Notes: Eigenvalue: 1. there could be a state bias which might affect our ability to compare different supermarket brands. there was only one significant difference (0.83). The last significant factor derived from the factor analysis. which allows us to estimate predictive ability and also assess the order of entry of the drivers as a surrogate for their relative importance in driving the emotional loyalty and fanaticism. store brands.1 percent of the variance in the data.40) brands on such consumer feelings as willingness to pay more. which since 1999 has been owned by Safeway. and Harris Teeter in the Mid-Atlantic States. cooking classes or other social activities) that I can participate in. it could provide a source of competitive advantage in cases where a supermarket brand has no other truly distinguishing advantages over competition. Trader Joe’s is a privately held chain of specialty grocery stores mainly in California but with locations in 24 other states. service level. Publix in the Southeast. Meijer in the Midwest. percent of variance explained: 2. the programs for rewarding patronage driver is negatively related to emotional loyalty and to fanaticism.03) than the national (2. HEB is a dominant privately owned supermarket brand in Texas. p.e. and as such. Both Central Market and Whole Foods Market offer product assortments very similar to those of traditional supermarkets rather than a reduced “specialty” selection. the brand equity driver with the highest differentiating power among supermarket brands for both the emotional loyalty and fanaticism dimensions is effort expended in keeping customers. the scale items loading on both the consumer-based brand equity outcome factors and the drivers of equity were summated into new variables by averaging the rating scores for each person on each factor (Hair et al. Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 indistinguishable levels of equity-building characteristics. and unique shopping experiences. the specialty supermarket chains garnered much higher fanaticism ratings (3. There are enough respondents who feel that it is important to make it statistically significant.07 out of a possible 5) than either the regional brand chain group (3.

000 0.100 3. Near the bottom of the list are three more regional chains as well as Safeway and Albertsons.000 0.025 t 25.034 0.Customer-based brand equity.480 0. and customer loyalty Arthur W Allaway et al. was rated “best in class” and had a “customer advocacy” rating (the percent of customers who serve as advocates of the store) just below the leader Wegman’s and just above Whole Foods Market (Kleinberger and Badgett.798 3. . 196 This fanaticism ranking is much higher than Wal-Mart’s ranking on the emotional loyalty dimension.607 3.227 3.000 0.40 0.000 0.826 Fanaticism 2.046 0. Publix is the largest employee-owned supermarket chain in the USA.042 2.010 Emotional loyalty (Constant) Efforts Product Service level Programs Community Prices Model R square Adjusted R square Std error of the estimate F Sig.564 3.000 0.40 0.244 5. 1 2 3 4 5 6 0.811 12. Two regional divisions of Safeway.789 0. but is followed by Publix. 0. 2007). Dominick’s and Von’s. are next before the first traditional national supermarket brand.171 0.991 2.000 0. the national brand supermarket chains are near the bottom of the fanaticism list.071 0. and.170 3. but is followed by Wal-Mart. most of the same brands stand out. Although fanaticism scores in general are significantly lower than emotional loyalty scores. which are both traditional supermarket national brands.437 2 0.269 3.018 0.283 3.103 0.213 2 0.688 0.64 0.75 149.882 consumer-based brand equity.028 0.600 24.049 17.959 2.585 Sig.00 Table XII Brand equity outcomes by supermarket type Supermarket type National brands Regional brands Specialty brands Emotional loyalty 3.049 3.217 3.064 0.073 3. As above.333 2. Fanaticism (Constant) Efforts Product Programs Community Model R square Adjusted R square Std error of the estimate F Sig.64 0.000 0. Central Market has the highest score on the fanaticism dimension. with little difference between the 2.340 3.311 2.18 0. equity drivers.13 0. according to a 2007 IBM study.000 0.024 22.018 0.005 0.868 8.075 0.875 3.336 0.441 0.27 .397 3. Kroger.041 0.066 0.136 0.366 3.000 0.026 Table XIII Emotional loyalty scores by supermarket brand Supermarket brand Trader Joe’s (specialty) Central Market (specialty) Meijer (regional) Publix (regional) Harris Teeter (regional) Whole Foods (specialty) HEB (regional) Tom Thumb (regional) Wal-Mart (national) Dominick’s (regional) Vons (regional) Kroger (national) ShopRite (regional) Jewel-Osco (regional) Safeway (national) Ralphs (regional) Albertson’s (national) Geography Multistate Texas Midwest Southeast East Central Multistate Texas Texas Multistate Midwest California Multistate Northeast Midwest Multistate California Multistate Emotional loyalty score 3.00 1 2 3 4 2 0.037 0. Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 Table XI Predictive modeling of customer-based brand equity outcomes Order entered Unstandardized coefficients B Std error 2 0. The fanaticism dimension shows a similar pattern of brand rankings but with interesting differences from the emotional loyalty dimension (Table XIV).793 9. Whole Foods is fifth on our fanaticism dimension.505 0.024 0.922 3.56 270.802 24.073 3.005 0.991 3.

Following are several strong regional chains including Meijer. including Meijer. From the modeling results. the HEB specialty supermarket brand. Safeway has the number one position in the rankings. chains ranking high on this driver in general have lower levels of customer-based brand equity. Publix. For the layout driver. with Whole Foods second behind Central Market and ahead of Trader Joe’s. and Publix. and HEB.016 2. Interestingly. The three national brands (Safeway. The supermarket chains ranked most highly on service level appear to have been successful at both training their employees to value customer service and creating a brand image associated with high service. HEB was rated nearly last on the store layout driver. which is logical given its reputation for low prices. three national chains (Kroger.858 2. followed by three regional divisions of national chains.311 2. it is hard to make too many judgments about the location driver because of the nature of the sampling plan for this study. the rankings change radically from those above. The programs for rewarding patronage driver refers to formal programs for rewarding patronage.651 2. Noteworthy as well. they typically seek to differentiate themselves from competitors by investing in one or more equity drivers that they feel can provide them with a competitive advantage in serving specific customer segments.20 score of Kroger. However.590 2. and customer loyalty Arthur W Allaway et al. with Wal-Mart in the middle of the list. Harris Teeter. However. apparently perceived by the sampled population as the highest priced brand in their shopping area. equity drivers. Not surprisingly with their smaller numbers of stores. Based on the results of the regression model.320 2. and Wal-Mart is last.250 3. Safeway and Albertson’s are rated as near the bottom in terms of the price driver. Wal-Mart and the specialty supermarkets rank in the second half of the list.Customer-based brand equity. and Whole Foods) and three strong regional supermarket brands (Harris Teeter. with Meijer again in the top group.874 2.348 2. Most of the high ranking chains on previous drivers are at the bottom of the list in terms of their customer loyaltyenhancing programs. On the product driver. the 2. Interestingly. Kroger and Wal-Mart take up two of the lowest three spots on the efforts driver. on the community driver. The top six supermarket chains on service level include the three specialty brands (Trader Joe’s. however.161 2. Trader Joe’s.126 2. and the 2. Drivers of customer-based brand equity in the supermarket industry As brands in a crowded marketplace evolve. Wal-Mart leads the rankings. Lowest prices have been the basis for Wal-Mart’s success and are responsible for its current spot as the largest seller of groceries in the nation.199 2. WalMart. On the efforts driver of equity. as were the Safeway and Albertsons brands. for the specialty chains (Whole Foods. Interestingly. take up two of the lowest three spots on the community list. Central Market. As with many of the drivers of equity. Only Harris Teeter of the three highly ranked regional chains above remains high on the programs driver. is Whole Foods Market. both Safeway and Albertson’s are in the top half of the list ahead of Whole Foods Market. followed by Trader Joe’s and Publix.970 2. the rest of the top half of the list is dominated by strong regional brands. First. At the very bottom of the list. followed by seven regional brand supermarkets. and Albertson’s) are near the bottom of the list on product quality and assortment ratings. Table XV summarizes these comparisons. Central Market. and Harris Teeter lead the list of supermarket brands. the three specialty brands lead the list.076 fanaticism score of Safeway. many of the independently owned regional chains appear in the top half of the list. On the programs driver. several supermarket brands who have earned similarly high total scores on consumer-based brand equity have created those levels with their own unique combinations of equity drivers. the familiar three independent regional chains. The “very important customer” program. Several of the highest ranking brands on programs are divisions of Safeway. Publix.13 score of Albertson’s. Each of the highest ranking supermarket brands on programs is known for its loyalty programs for its customers. Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 Table XIV Fanaticism scores by supermarket brand Supermarket brand Central Market (specialty) Publix (regional) Trader Joe’s (specialty) Harris Teeter (regional) Whole Foods (specialty) Wal-Mart (national) Meijer (regional) Tom Thumb (regional) Jewel-Osco (regional) HEB (regional) Safeway (national) Kroger (national) ShopRite (regional) Vons (regional) Albertson’s (national) Dominick’s (regional) Ralphs (regional) Geography Texas Southeast Multistate East Central Multistate Multistate Midwest Texas Midwest Texas Western Multistate Northeast California Multistate Midwest California Fanaticism score 3. Finally. Harris Teeter leads the list of supermarket brands. the brands that rank highest on the most important drivers of customer-based brand equity would seem to be those that have been most successful at brand-building. each of the three is ranked in the top six chains on both the emotional loyalty dimension and . Kroger. This driver taps into the informal efforts made by the different supermarket chains to create relationships with their customers. it appears that the most important driver of differences among the supermarket chains on customer-based brand equity is effort expended in keeping customers. interestingly enough.170 2. Harris Teeter offered one of the first formal loyalty card programs in the nation. and Albertson’s) are rated as the bottom three on the service level driver. On the prices driver. On the location driver. Central Market. The three specialty chains were rated near the bottom of the rankings. is significantly higher than the number two brand Whole Foods.105 2. Publix. just below Whole Foods Market. . and Trader Joe’s). Wal-Mart and. Meijer. HEB. Discussion Based on the results of this study.267 2. In the supermarket industry. 197 and Meijer). Interestingly. it is evident that there are large differences in the levels of consumer-based brand equity earned by supermarket chains.

745) Vons (3.688) Safeway (3.759) Meijer (4.924) Central Market (3.972) Jewel-Osco (3.741) Dominick’s (3.321) Meijer (4.558) Ralphs (4.711) Albertson’s (3.219) Dominick’s (3.751) Wal-Mart (3.247) Jewel-Osco (3.869) Vons (3.507) Albertson’s (3.556) Meijer (4.016) Kroger (3.019) Jewel-Osco (1.854) Wal-Mart (1.722) Jewel-Osco (3. .875) Wal-Mart (3.160) Publix (4.583) Dominick’s (3.169) Wal-Mart (2.Arthur W Allaway et al.241) Vons (4.846) Kroger (3.886) Jewel-Osco (3.379) ShopRite (4.795) Trader Joe’s (3.455) Tom Thumb (3.867) Ralphs (1.297) HEB (3.679) ShopRite (2.087) Vons (4.542) Central Market (3.575) Meijer (3.744) Dominick’s (3.385) Harris Teeter (2.794) Whole Foods (2.353) Meijer (2.451) Vons (3.227) ShopRite (3.977) Safeway (1.265) Meijer (4.340) Kroger (2.376) ShopRite (4. Table XV Equity drivers by supermarket brand Product Programs Prices Layout Location Community Customer-based brand equity.417) HEB (4.176) Central Market (4.657) Safeway (3.862) Whole Foods (3.900) Central Market (2.744) Publix (3.725) Vons (3.800) Dominick’s (1.531) Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 .551) Kroger (3.671) Ralphs (3.926) Albertson’s (3.545) Vons (4.149) Vons (2.067) HEB (4.973) Wal-Mart (3.594) Tom Thumb (2.490) Whole Foods (3.353) Kroger (4.750) Dominick’s (4.128) Jewel-Osco (3.797) Wal-Mart (1.870) Trader Joe’s (4.688) Safeway (4.759) Central Market (3.880) Tom Thumb (3.862) Safeway (3.376) Trader Joe’s (1.569) Ralphs (3.581) Publix (4.345) Whole Foods (4.332) Meijer (4.577) Harris Teeter (4.022) HEB (3.094) Ralphs (4.426) Whole Foods (4.817) HEB (3.451) Harris Teeter (3.132) Safeway (4.741) HEB (2.815) Tom Thumb (3.886) Harris Teeter (3.454) Harris Teeter (4.265) Tom Thumb (4.521) Tom Thumb (3.178) Harris Teeter (4.741) ShopRite (3.497) Jewel-Osco (3.908) Dominick’s (3.463) Jewel-Osco (4.490) Central Market (4.833) Trader Joe’s (1.433) Tom Thumb (3. equity drivers.902) Ralphs (3.412) Publix (2.037) ShopRite (4.425) Whole Foods (4.421) Publix (2.118) Central Market (3.709) Kroger (3.655) Ralphs (3.455) Wal-Mart (4.523) Albertson’s (3.309) Trader Joe’s (4.337) Trader Joe’s (4.191) Harris Teeter (4.583) Safeway (3.208) Kroger (3.656) HEB (4.157) Publix (4.875) Kroger (3.888) Whole Foods (1.633) Meijer (2.897) Trader Joe’s (3.667) Wal-Mart (4.181) Ralphs (3.565) HEB (2.644) Tom Thumb (3.269) Publix (4.825) Albertson’s (3.203) Publix (4.062) ShopRite (3. and customer loyalty Efforts Service level 198 Harris Teeter (3.173) Dominick’s (4.233) Whole Foods (3.722) ShopRite (3.396) Albertson’s (3.444) Albertson’s (4.650) Safeway (3.897) Albertson’s (1.489) Trader Joe’s (4.797) Central Market (4.

and Harris Teeter. The supermarket brands which are regional divisions of Kroger.1 shopping once a week. rates well on the programs and prices drivers. but poorly on both dimensions of consumer-based brand equity. it seems clear that very high product and service drivers are the basis for the high rankings overall for the specialty supermarkets. in many cases. with Publix and Harris Teeter in the top half but not close to Meijer. Whole Foods ranks near the bottom of the list in terms of customer perceptions of effort. The nationally recognized supermarket brands.79 percent of the sample responded that they shopped at a specialty foods retailer twice a week and an additional 24. HEB leads Meijer and Harris Teeter by a significant margin. Trader Joe’s ranks high on the price driver but low on community. the results are more disappointing. although if “twice a week” and “once a week” shopping is combined there is a smaller difference. and are deeply rooted in the communities that they serve” (National Grocers Association. Patronage frequency and supermarket type For our sampled population. are often homegrown local favorites. Publix.12 percent of respondents visited their supermarket twice a week. 2010). only the emotional loyalty dimension is statistically related to the difference in patronage frequency among chains (Table XVI). only 12. Whole Foods and Central Market rank at and near the bottom of the prices driver respectively but at the top of the community driver. For the other regional chains. the frequency of shopping and spending per trip varied significantly between the specialty foods brands and the regional and national brands (Table XVII). Similarly.Customer-based brand equity. it appears that consumers simply do not have strong feelings for the national chains. Safeway ranks high on programs and moderately high on efforts. According to the 2010 National Grocer’s Association consumer survey report. and location. Overall. Harris Teeter is number one on the programs driver and on the efforts driver. In fact. customer reports of patronage frequency and spending per visit can serve as surrogates for shopping behaviors. Supermarket brands and patronage frequency Interestingly. but are in the lower half of the rankings in terms of programs. equity drivers. but low on product quality and prices. However. 31. no other supermarket chain has over half of its consumers that report visiting twice a week. and efforts. After those two. regional chains are “nimbler than their larger competitors. Wal-Mart is unique. informal efforts to increase loyalty. However. Overall. although they do for both their regional chains and the specialty chains. realizing that locations and the total number of branded stores in each area drive a great deal of patronage decisions as well. and in the middle of the field in 199 product. and customer loyalty Arthur W Allaway et al. Publix. Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 the Fanaticism dimension of consumer-based brand equity. and almost equal in terms of shopping visits per week without a formal loyalty program. as shown below. The fanaticism ratings do not change very much at all as patronage frequency goes from twice a week to less than once a month. Trader Joe’s ranks much higher than the other two specialty chains on the effort driver. Publix ranks very high on several of the drivers of equity. but do not stand out on the emotional loyalty dimension or on any of the drivers of brand equity. there is a wide range of difference in ratings on the two dimensions of customer-based brand equity. Meijer is rated second behind Wal-Mart on the price driver. with an additional 47. on the other hand. For national brands. Safeway and Publix are a very close number one and two in terms of the percentage of its customers who visit their store twice a week (Table XVIII). Tom Thumb and Jewel-Osco rank higher on the fanaticism dimension of consumer-based brand equity than HEB. What these four regional chains have in common is that they are independently owned (not a division of a larger chain) and they have grown organically from a single regional base. with strong consumer-based brand equity ratings. Publix and Harris Teeter follow closely on the efforts driver. and on the fanaticism dimension it ranks in the lower half. followed closely by HEB. except for supercenter Wal-Mart. despite widespread discussion of the increased popularity of natural foods shopping. with Trader Joe’s also getting a boost from a better prices rating and a higher efforts rating. the informal attempts it makes to promote loyalty and relationships with its customers. Publix is rated very highly on the efforts driver that captures informal efforts at relationship building by the chain.19 percent shopped once every two weeks. Safeway has high rankings on formal loyalty programs. score near the bottom of the list on both outcome dimensions of consumer-based brand equity and on most of the drivers of brand equity as well. and Publix is number two overall on the fanaticism dimension. over 40 percent of respondents do visit a specialty supermarket at least once a week. . programs. Of the two dimensions of customer-based brand equity. For emotional loyalty dimension of customer-based brand equity. with an additional 47. 23. Wal-Mart is in the top six brands in fanaticism.85 percent shopped once a week. These top chains appear to be acting on those advantages. And while the specialty supermarkets have by far the lowest patronage frequency. For the purely regional brands. and Safeway generally do poorly on the consumer-based brand equity outcome measures as well as the drivers of brand equity. ranks very high on both the emotional loyalty and fanaticism dimensions of customer-based brand equity. the formal loyalty and other programs designed to drive patronage. The three as a group also rank highest on the product driver of equity and also very highly on the service driver. Kroger and Albertson’s never appear near the top of the ratings on any dimension or driver of equity.95 of regional brand respondents visited their supermarket twice a week. Safeway ranks third to the lowest. 36. a grocery cooperative out of New Jersey that serves several states in the Northeast. SuperValu. HEB follows Meijer closely on the prices driver but varies widely on some of the other drivers. ShopRite. except for programs (because of their loyalty card systems). but ranks very poorly in service.9 percent shopped approximately once a month. Meijer is the highest of this group on the emotional loyalty dimension. and 24. Consumer-based brand equity and actual patronage behaviors Although the objective of this study was not to gather detailed information on actual marketplace behaviors. The “big three” seem to be Meijer. The key to its popularity is simply the fact that is rates number one on the prices driver.25 percent shopping once a week. even higher than the specialty supermarkets. .

the location and market penetration strategies of the various chains are likely to determine dollars per visit more than does consumer-based brand equity.36 35.554 2.77 27.4 percent spent less than $50 Table XIX Spending per visit by supermarket type Percent of shoppers spending less than $50 per visit National brands Regional brands Specialty brands 29.66 17. For national chains.041 0. The regional and national supermarket chains exhibit a variety of dollar per visit levels.61 14. and customer loyalty Arthur W Allaway et al.39 37. In addition. this is logical.53 30. since dollars spent interacts with the number of trips per week (shown above). . these figures were 39. Percent of shoppers spending between $51 and $100 per visit 51.95 12.85 53.94 44.2 percent spent between $50 and $100. spending reports by our sample follow the same pattern as patronage. 0.33 32.75 18.13 13. However.25 27.00 54.53 12.609 Once a month 3.02 Percent of shoppers spending more than $100 per visit 22.68 24.94 13.79 Once a week 47.65 15.617 Less than once a month 3.467 Sig. equity drivers.17 47.19 Once a month 2. What is most interesting among the sampled population is the low spending levels per trip at the specialty supermarket chains.64 52.38 19.82 23.23 17. an average of 29.65 6.8 percent between $50 and $100.29 48.15 28.76 22.22 23.99 200 .59 Percent of shoppers visiting less than once a week 10.75 39.00 5.2 percent spent between $50 and $100.19 46.29 33.97 56.12 Spending per visit and supermarket type The dollars per trip table (Table XIX) is largely displayed largely for interest. 52. Over 57 percent of Whole Foods Market customers purchased less than $50 per trip.4 percent less than $50 and 47.16 40.04 38.369 2.432 2.67 56.85 Every two weeks 19.728 Once a week 3.60 47.12 56.35 31.00 2.74 36.Customer-based brand equity.50 15.25 47.45 22.12 36.06 45.66 24.584 Every two weeks 3.24 18. However.27 Table XVIII Patronage frequency by supermarket brand Percent of shoppers visiting twice a week Safeway (national) Publix (regional) Tom Thumb (regional) HEB (regional) Vons (regional) Jewel-Osco (regional) ShopRite (regional) Wal-Mart (national) Albertson’s (national) Meijer (regional) Harris Teeter (regional) Kroger (national) Ralphs (regional) Dominick’s (regional) Whole Foods (specialty) Central Market (specialty) Trader Joe’s (specialty) 56.25 30.33 37.75 percent of respondents spent less than $50 dollars per trip while 51.10 24.68 58.09 23. and HEB in the top five (Table XX).29 Percent of shoppers visiting once a week 33. For specialty chains.78 35.44 44. especially since they also have the least frequent visits.00 11.5 percent purchasing between $50 and $100.90 Less than once a month 0.220 Table XVII Patronage frequency by supermarket type Dimension National brands Regional brands Specialty brands Twice a week 31.82 54. Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 Table XVI Consumer-based brand equity and shopping frequency Dimension Emotional loyalty Fanaticism Twice a week 3.74 35. Publix. since Wal-Mart is a supercenter with many more product categories than a supermarket.38 per trip and an additional 35.22 25.25 53.179 2. with Harris Teeter.37 52.79 25. with another 34. Wal-Mart is by far the leader in dollars spent per trip.458 2.50 23.53 7. For regional chains.

67 47. In terms of actual patronage.91 29. even though both Whole Foods Market and Central Market carry a full supermarket product assortment.22 23. For other chains.50 40.96 37. wishing a brand well and being devoted to it as a concept does 201 not compel shoppers to spend the majority of their time and dollars there.36 14.65 23. ranks in the top half of all chains on the emotional loyalty outcome dimension of consumer-based brand equity. the programs driver (which includes loyalty programs and similar efforts) appears to help chains like Safeway and Kroger (and their divisions) overcome perceptions of poor service and/or product quality and achieve higher numbers of trips and spending than most .23 58. whose dominance on the price driver of equity more than overcomes its low scores on other drivers.91 Interestingly.56 50.67 36.65 5. the specialty brands are weakest compared to the national and regional brands on three dimensions: programs (designed to promote loyalty such as discount coupons and loyalty cards).14 Percent of shoppers spending between $51 and $100 per visit 66. Across the board.00 15. The clear branding winners in this study appear to be the home-grown regional chains. equity drivers. Whole Foods Market appears to suffer most from the perception that it is very high priced compared to competing supermarkets.65 43.45 11.06 50.49 61. these feelings can translate into shopping loyalty. HEB. Central Market. and customer loyalty Arthur W Allaway et al.00 9.67 58. these results occurred even though the sample was drawn from zip codes in which a Whole Foods Market was located.45 41.75 11.71 20. the location issue is logical except for the fact that the sample was drawn specifically from areas with relatively easy (zip code) access to the largest specialty supermarket chain in the nation. In addition.Customer-based brand equity. and three of the four (not HEB) rank in the top half on the fanaticism dimension. however. ranking dead last on the price driver.29 55. These brands also rank high on actual patronage behaviors. What is surprising about those findings is that they fly in the face of the very high levels of both the emotional loyalty and fanaticism dimensions of customerbased brand equity found for those specialty chains.41 9. the key finding seems to be that high scores on the dimensions of consumer-based brand equity require high scores on both the service level and product quality dimensions as well.82 69. and Meijer. and even person-to-person promotion of the brand to others.18 40.41 35.11 10. they rank highly on the service level and product quality and assortment drivers of equity in addition to their own unique “other” drivers which help form the image of their brand in the minds of consumers. the “specialty” in specialty supermarkets does apply.75 45.21 6.18 33. both Whole Foods and Central Market rank high on both outcome dimensions of customer-based brand equity as well as the two most important drivers of equity. the actual shopping behaviors of the sampled population indicate much higher frequencies of shopping and dollars spent per visit at the national and regional brand supermarkets compared to the specialty supermarkets. Harris Teeter.29 34. Clearly. Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 Table XX Spending per visit by supermarket type Percent of shoppers spending less than $50 per visit Wal-Mart Shop-Rite Harris Teeter Publix HEB Vons Safeway Kroger Meijer Jewel-Osco Albertsons Dominick’s Trader Joe’s Ralph’s Central Market Tom Thumb Whole Foods 11.22 18.91 41.33 36.11 17. Implications for branding strategy This study contributes important findings relative to the strategic brand equity-building efforts of the major players in the supermarket industry and the effects of those efforts on the consumers’ attitudes toward their supermarket brands.69 13.33 41.48 Percent of shoppers spending more than $100 per visit 22. with its small number of locations.08 28. Each of the four independently owned regional chains.53 7.00 52.26 33. prices. . Reasons for this disconnect might be found by looking at the drivers of equity as they differ across the store groups.09 17. Publix.30 32.94 52. A large proportion of consumers clearly have strong feelings about the supermarkets they patronize. The exception is Wal-Mart. Both Whole Foods and Central Market rank very low on the programs driver and the price driver. Apparently. Across the board.18 46. With generally fewer numbers of specialty supermarkets in most markets.94 57. and location. plus some other combination of drivers to differentiate the brand from competitors. However. higher levels of spending. It appears from the data that the majority of grocery shopping still takes place in traditional supermarkets even among consumers who patronize specialty grocers on a relatively regular basis and feel much stronger about their specialty grocers than they do about their traditional supermarket. In an industry with numerous choices in nearly all market areas and low switching costs.88 5. ranks dead last on the location driver.00 45.

(2006). J. As discussed at the outset. pp. pp. and Managing Brand Equity. most respondents selected their most typically shopped store(s). 80 No. 136-44. 82 No.S.L. Journal of Retailing. “Retail branding and loyalty: an overview”. pp. and Overton. J. (2004). for some drivers. “Customer satisfaction and retail sales performance: an empirical investigation”.. Other chains differentiate themselves with formal programs to promote shopping frequency. and Lehmann. Marketing Science. can cost many millions of dollars. M. 25 No. 125-38.L. Clearly. Vol. Armstrong. and Keller.P. H. J. (2006). L. D.E. Multivariate Data Analysis. Luo. 71 No. 6. and Chestnut.I. T. “A paradigm for developing better measures of marketing constructs”. pp. 2. pp. We found several chains with very similar levels of overall consumer-based brand equity have built those levels with different strategies. change is a very expensive proposition. because of the relatively upscale nature of the areas surrounding most Whole Foods locations. “Linking brand equity to customer equity”. New York. (2007).. D. Another would focus on less affluent consumers to see if there . Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 of the chains with higher scores on the two outcome dimensions of consumer-based brand equity. some chains differentiate themselves with very high levels of those equity drivers. . pp. 74 No. 21 Nos 2/3. “Manage marketing by the customer equity test”. 16. 4.W. (2004). are based on these efforts. However. Jr (1979). 64-73. National Grocers Association and Consumer Insight. K.R. service and product quality are important to consumer-based brand equity across the board.. McAlister. 80. E. Gomez. Vol. (1977). K. (1996).C. (2010). Development of a formal loyalty program. Keller. Vol. are significant differences between consumers who can afford to choose grocers based on service and product quality and those who might be forced to choose based on price. Reichheld. 80.F. A. to a significant extent. As such. “An assessment of supermarket loyalty cards in one major US market”. Vol. PrenticeHall. 144. product. the sample is not generalizable to the typical US supermarket shopper population. which is. Jacoby. “Understanding retail branding: conceptual insights and research priorities”.. 2. Journal of Retailing. Changing product quality and assortment and changing pricing can likewise prove very expensive.Customer-based brand equity. Journal of Service Research. and Zinkhan. “Loyalty-based management”. the importance to consumers of high service levels and informal efforts at maintaining customer relationships can be addressed much more inexpensively with customer service training and with consistent promotional messages. Journal of Retailing. Bellizzi. pp. and Lehmann. On the other hand. 9 No. and Wittink. John Wiley & Sons. Brand Loyalty Management and Measurement. others with informal efforts at building customer loyalty. F. Keller.A. M. pp.R. Y. most consumers had never shopped in the stores of regional chains outside their own market areas.F. the choice of supermarkets to rate was left up to the sampled consumers. p. 2nd ed.. “Estimating nonresponse bias in mail surveys”. K. (2004). because of the geographic distribution of retail supermarket brands. B. Levy. 2007 IBM Institute for Business Value.. For the supermarket brands that do not seem to stand out in the minds of customers. (1978). Blattberg. Vol. J.W. (2004). Black. ix-xii. this study shows that there are equity drivers that have the potential to raise the levels of consumer-based brand equity. equity drivers. “Why advocacy matters to grocers”. and that supermarket retailers that tap into those emotions have the opportunity to build much stronger brands than those who simply focus on providing groceries. which involves the daily implementation of the marketing message through service. Churchill. Journal of Marketing Research. and Bristol. Leone. and promotion decisions which are experienced in the stores by consumers.L. 740-59.L. for example. One future research project in the area of supermarket retailing and brand equity might involve sampling from areas with both the same and unique brands present. Although the multistate sampling plan was specifically designed to keep one highly recognized retail brand (Whole Foods Market) in the consideration set of all potential respondents. R. pp. K. Journal of Retailing. D. we would expect that the findings in additional studies will reveal that emotion and involvement are important to supermarket consumers just as they are to consumers of other types of retail categories (and product categories). The combination of low prices and formal loyalty programs seems to drive a significant amount of actual shopping behaviors.L. Another would be to concentrate on details of actual shopping behaviors rather than attitudes. Pan. Vol. (2006). (1993). Customer-focused Grocer Study.R. Babin. However. R.S. “Consumer survey report”. National Grocers Association (2010). NJ. Prentice-Hall. 3. Vol. These unique combinations of equity drivers pinpoint specific supermarkets unique sources of distinct competency based and verify the existence of different consumer segments that are driven by different combinations of brand factors. In addition.. Vol. T. “Brands and branding: research findings and future priorities”. McLaughlin. 265-78. Harvard Business Review. Upper Saddle River.. J. The Journal of Consumer Marketing. Hair. Grewal. V. G. 396-402. Vol.M. (2003). Kleinberger. 4. price. and to a lesser degree fanaticism. 331-42. Vol. Jr. customer-based brand equity in the supermarket industry is the result of a supermarket chain’s total brand-building efforts over time. Also. 202 Limitations and directions for further research As with nearly all research. Rao. this study has limitations. R. NY. K. “Determinants of retail patronage: a meta-analytical perspective”. 229-43. 14. pp. Harvard Business Review. and Srivasta.J. Vol. Upper Saddle River.A. W. R. References Ailawadi. and customer loyalty Arthur W Allaway et al. M. G. Based on the results above. a function of the spatial distribution of brands in their areas. D. and Badgett. Measuring. R. Journal of Marketing Research. Strategic Brand Management: Building. Emotional loyalty. and Deighton. Keller. 64-73. NJ. 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Lemon. . A. V. Such consumers typically encourage others to patronize the store. . define the second factor as “fanaticism” to reflect consumer resolve to stay loyal to their favorite store and refuse to consider shopping elsewhere. Considerable differences in customer-based brand equity levels were evident here. promotions..edu Executive summary and implications for managers and executives This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. . service. regional and specialty supermarket chains is additionally carried out. Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 Reyes. In the present study. 60. . Retailers can influence customer-based brand equity over time through various decisions and activities associated with staff customer service training. Journal of Retailing. Allaway et al. Price.T. Variety across all departments is also important. . Zeithaml. discounts and relevant loyalty programs. store layout and involvement in the local community. Wright. L. . 36. “Return on marketing: using customer equity to focus marketing strategy”. A comparison of equity levels and drivers for national. It is proven that loyal customers benefit an organization in ways that include purchasing more. with the majority being well-educated and affluent. 31-46. “The behavioral consequences of service quality”. A comprehensive analysis was also carried out to rank the 22 supermarket chains with regard to each equity driver. “Customer retailer loyalty in the context of multiple channel strategies”. profile and marketing power would mean that national brands rated strongly on consumerbased brand equity. polite and helpful. Data analysis revealed two factors consistently linked with brand equity and customer loyalty. D. Retailers must therefore acquire knowledge of what drives customer-based brand equity that is created through various “memory-based associations” people develop about a specific brand. “Loyalty saturation in retailing: exploring the end of retail loyalty cards?”. Effort to retain customers. Equity is driven by factors that are personal. and customer loyalty Arthur W Allaway et al. 27 No. Its ratio to quality was seen as important.ua. L. (1996). It was presupposed that size. R. Respondents believe that products should be of high quality and superior to those offered by rival stores. community involvement and prices also impacted on the emotional loyalty dimension. . pp. J. The shopping experience is enhanced if a store has a sufficient number of employees who are friendly. and Zeithaml. 429-40. 16 regional brands and three specialty food brands. Vol.N. Significant developments in the industry include brand consolidation. 46. finding effective ways to attract customers and secure their loyalty is crucial for retailers.Customer-based brand equity. increased prevalence of store brands and intense competition for conventional supermarkets in the shape of supercenters like Wal-Mart and Target. pp. Wallace. . Vol. Another finding was that the three specialty brands are among the top scorers for service. pp. Comments here related to departments and products being easy to find. p.. L. Location. product variety. examine consumerbased brand equity and aim to identify its key factors for typical supermarket patrons. It was also apparent that supermarket chains achieving high equity scores did so with . Consumers are impressed with supermarkets that benefit their local community through such as educational or social initiatives. Journal of Marketing. (2004). Vol. For both emotional loyalty and fanaticism. 1..W. K. Product. it’s love”. these supermarkets scored below both regional and specialty stores on both emotional loyalty and fanaticism dimensions. 68 No. Customer reward programs. S.A. C. grocery retailing is a multi-billion dollar industry. Study findings supported earlier research by identifying various key drivers of these brand-equity outcomes: . Customer recall of positive past shopping experiences influences their future patronage and makes them less susceptible to competitor advances. The goal for any retailer should be to determine the ideal combination of factors that maximize consumer-based brand equity and help to successfully confront the challenges posed by rivals. Service. A final sample of 659 was obtained. V. 80. Community involvement. Allaway et al.L. respondents indicated that effort to retain customers is most important. Product. International Journal of Retail & Distribution Management. and Johnson. Journal of Marketing. Rust. The authors distributed a 203 questionnaire to consumers obtained from a mailing list and based in areas where supermarket brands enjoy a strong presence. Vol. The demographic profile of respondents was consistent with the areas where the sample was obtained. and Sparks. 249-63. 109-27. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefits of the material present. Layout.A. Brandweek. In the USA. a willingness to pay higher prices and positive word-of-mouth (WOM) recommendation. pp. Giese. The first is labeled “emotional loyalty” as it reveals a strong attachment to a particular supermarket brand. price and the service provided by the store. Indications are that certain brands focus more on specific areas. The indication here is that consumers are impressed with supermarkets that try hard to build ties with them. Sufficient data was obtained for 22 chains including three nationally recognized brands. Participants reported shopping experience in either conventional or specialty stores but around 70 percent could relate to both types of retail outlet. and Parasuraman. “For shoppers. Berry. Vol. (2004). Corresponding author Arthur W. (1999). Given these developments. product or market-related and include such as quality. Allaway can be contacted at: aallaway@cba. (2005). That findings likewise reveal the relative insignificance of customer rewards shows agreement with other studies. Drivers of equity are essentially universal but the importance afforded to them might vary according to each consumer segment. People believe that stores should formally and informally acknowledge their patronage through reward schemes that might include coupons. The appeal of stores increases when they are within easy reach. equity drivers. However. 10.

National brands rank very low for the two dimensions of customer-based brand equity and most brand equity drivers.com Or visit our web site for further details: www. The authors noted that: . Wal-Mart is considered one exception as it performs poorly in both service and product quality and attains its positioning almost solely through price. Allaway et al conclude that consumer feelings are much stronger towards specialty and regional stores than to national operators. Ultimately. In contrast. improving service levels and maintaining customer relations through training and promotional messages is a more economical option. The four independently ownedones generally performed better and this could be attributed to being of genuine local origin. which is considered key to the chain’s popularity. though. For instance. A combination that also includes good scoring for certain other drivers can help differentiate a brand from the competition.Customer-based brand equity. high ratings were mainly due to product and service drivers. and customer loyalty Arthur W Allaway et al. It suggests that strong positive feelings towards a certain brand type do not necessarily lead to greater patronage. Supplied by Marketing Consultants for Emerald. as can changes to pricing or the quality and range of products offered. Disparity exists among regional brands for both emotional loyalty and fanaticism. Allaway et al.) To purchase reprints of this article please e-mail: reprints@emeraldinsight. Notable findings here included Safeway’s high rating for customer rewards and Wal-Mart’s for price. however. The authors also note that patronage decisions can be influenced by location and the “total number of branded stores” in an area. achieving a high level of consumer-based brand equity requires strong performance in service and product quality.emeraldinsight. warn that an emphasis on certain drivers can be costly. A focus within areas where “both the same and unique brands” operate is another idea. Results indicated that shopping frequency and amount spent was higher for national and regional chains than for specialty brands. Overall. A reason forwarded for this that specialty stores tend to be more expensive and place little emphasis on reward schemes. They do. creating formal loyalty schemes involves significant expense. strong community presence and more nimble than larger rivals. Supermarkets which are regional divisions of national concerns generally rate much lower. Differences in patronage frequency are also related to emotional loyalty but not to the fanaticism dimension. equity drivers. . and customer loyalty in the supermarket industry”. Future studies might include less affluent consumers likely to be greatly influenced by price.com/reprints 204 . Safeway and Kroger likewise rate low on these key drivers but the reward programs driver means that shopping frequency and spend is higher for these chains than for most others with high service and product quality ratings. equity drivers. . believe that the research highlights drivers able to increase consumer-based brand equity. Journal of Product & Brand Management Volume 20 · Number 3 · 2011 · 190 –204 “unique combinations of equity drivers”. ´ (A precis of the article “Customer-based brand equity. For specialty stores. . The authors additionally suggest investigating actual behavior rather than attitudes.