The Influence of Customer-Based Brand Equity on Customer Satisfaction and Brand Loyalty: Evidence from South African Mobile Telecommunications Industry

Abstract

The South African mobile telecommunications environment has become increasingly competitive, with non-traditional players like FNB and Mr Price joining the fold. Therefore, to succeed and ensure survival in such an industry, it is imperative for mobile operators to build brand equity as it ensures customer retention, repeat purchase patronage and safeguards the customer base from competitive activity. In this regard, this study examined the influence of customer-based brand equity on customer satisfaction and brand loyalty in South Africa’s mobile cellular services. To this end, the influence of perceived quality, brand awareness, brand associations on customer satisfaction and brand loyalty in the South African mobile telecommunications industry was investigated. A quantitative approach was undertaken with data collected by a survey from 240 Generation Y respondents through a structured self-administered questionnaire. Reliability and validity tests were performed to validate the scales used in the study. Correlation analysis and multiple regression analysis were performed to ascertain the influence and nature of relationships between the dimensions of brand equity and customer satisfaction as well as between customer satisfaction and brand loyalty. Significant positive relationships were established between perceived quality, brand awareness, brand associations and customer satisfaction as well as brand loyalty. Perceived quality had the strongest influence on customer satisfaction, followed by brand awareness and brand association respectively. Results also showed a significant positive relationship between customer satisfaction and brand loyalty. The implication from the findings was that service providers of mobile telecommunications in South Africa should focus on customer satisfaction and its antecedents to develop a cadre of loyal customers. Brand managers should place significant effort primarily on building brand equity and brand equity dimensions, which have high importance towards customer satisfaction and ultimately brand loyalty.

Keywords

• Branding,Customer-Based brand equity,Brand loyalty,Mobile telecommunications services; Generation Y

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