Consumer based brand equity and financial performance: a study of the commercial banks in Kenya

Abstract

The study sought to investigate whether there is a correlation between Consumer Based Brand Equity and Financial Performance in service brands. The study was to investigate the impact of building brand equity dimensions namely: Brand Loyalty, Brand Awareness, Perceived Quality and Brand Image, on financial performance of the large banking institutions in Kenya. To achieve this, the objective was formulated and tested. Primary data was collected from 350 respondents who are account holders of the 10 large banks using semi-structured questionnaires. Analysis of the data showed that banks must significantly consider brand loyalty, perceived quality and brand image when attempting to establish definite brand equity from the customer's viewpoint. Although brand awareness is not loaded highly as a consumer based brand equity factor, it was found to be significantly related to financial performance. Brand image and brand loyalty also significantly affected financial performance. The critical role of brand loyalty, brand awareness, and brand image was strongly demonstrated. In deed, a review of detailed measures constituting these three variables shows that most measures help to differentiate high and low performance banks. We conclude that consumer based brand equity can yield significant improvement in financial performance of service brands and positively impact return to shareholders. This improves the brands competitive advantage.

The study recommendations that activities geared towards building brand loyalty, brand image, awareness and perceived quality be enhanced by service brands through organisation's marketing departments, and implemented and managed in.such away that maximum benefits are achieved.