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Exploring customer-based airline brand equity: evidence from Taiwan.


Although branding management is important to an airline company, the existing literature on brand equity within the airline industry is sparse sparse - A sparse matrix (or vector, or array) is one in which most of the elements are zero. If storage space is more important than access speed, it may be preferable to store a sparse matrix as a list of (index, value) pairs or use some kind of hash scheme or associative memory. . This study proposes an airline brand equity model from the customer's perspective and operationalizes the airline brand equity with four dimensions: brand awareness, brand image, perceived quality, and brand loyalty. In addition, the inter-relationships among four dimensions and their influences on brand equity are investigated empirically. Using an empirical survey data of Taiwanese air passengers', the results reveal that brand loyalty, among other brand equity components, is the main determinant determinant, a polynomial expression that is inherent in the entries of a square matrix. The size n of the square matrix, as determined from the number of entries in any row or column, is called the order of the determinant.  of brand equity, and a causal causal /cau·sal/ (kaw´z'l) pertaining to, involving, or indicating a cause.


relating to or emanating from cause.
 relationship between perceptual and behavioral dimensions is confirmed in terms of inter-relationships among brand equity components. Managerial implications in brand management and customer relationship management to the airline industry are provided.

The importance of brand equity to the service industry in terms of marketing and business management has been addressed recently by both academics and practitioners, but the research of brand equity on the airline industry is still sparse and requires more attention. Chen and Chang (2008) address the importance of customer-based brand equity in the airline industry and explore the relationships between brand equity and their consequences--namely, brand preference and purchase intentions. Their findings confirm the positive effects of customer-based brand equity on brand preference and purchase intentions. More specifically, better airline brand equity results in customers' higher preference on an airline and further leads to a higher likelihood of purchase intentions via the mediating effect of brand preference.

Despite airlines making great efforts to establish and maintain their brand equity in practice, an appropriate measurement of brand equity for the airline industry lacks a general consensus. This is especially so as the interrelationships between the components of airline brand equity and the effects of components on overall brand equity are of great importance. In general, customer-based brand equity consists of four main components: brand awareness, perceived quality, brand image, and brand loyalty (Chen and Chang 2008). Among them, the first three components belong to perceptual brand equity, while the last component refers to behavioral brand equity (Cobb-Walgren, Ruble and Donthu 1995; Yoo and Donthu 2001). Additionally, a causal relationship is believed to occur when perceptual brand equity has positive effects on behavioral brand equity. However, the inter-relationships among the components of perceptual brand equity and what influences perceptual brand equity in terms of components on behavioral equity are issues requiring more research.

The objective of this study are threefold: First, explore the inter-relationships among the components of perceptual brand equity, i.e., brand awareness, brand image, and perceived quality in the airline industry; second, investigate the influences of components of perceptual brand equity on brand loyalty based on the perception-behavior causal hypothesis; and third, examine the relationships between the components of brand equity, perceptual and behavioral, and overall brand equity. This research uses a sample of data collected from Taiwanese air passengers who take international flights by a questionnaire survey in order to conduct the empirical analysis. The structural model between constructs is constructed and examined by employing the structural equation modeling Structural equation modeling (SEM) is a statistical technique for testing and estimating causal relationships using a combination of statistical data and qualitative causal assumptions.  (SEM) approach.


Brand equity, which refers to the incremental utility or value added Value Added

The enhancement a company gives its product or service before offering the product to customers.

This can either increase the products price or value.
 to a product by its brand name (Keller 2003), has been deemed as primary capital for many industries. Due to characteristics such as intangibility, inseparability in·sep·a·ra·ble  
1. Impossible to separate or part: inseparable pieces of rock.

2. Very closely associated; constant: inseparable companions.
, heterogeneity het·er·o·ge·ne·i·ty
The quality or state of being heterogeneous.


the state of being heterogeneous.
, and perishability per·ish·a·ble  
Subject to decay, spoilage, or destruction.

Something, especially foodstuff, subject to decay or spoilage. Often used in the plural.
 embedded Inserted into. See embedded system.  in services, the service industries have recently paid more attention to the importance of brand equity to their performance and hence have devoted great efforts to establish unique brand equity for their companies. Strong brands can increase customers' trust from an invisible purchase and enable customers to better visualize and understand intangible products (or services). Rather than management strategies, many western companies have re-evaluated the longstanding brand power for short-run performance. In addition, brand management has played an important role in forming a corporate strategy (Kim and Kim 2005). On the other hand, researchers have also had to focus to a considerable extent on brand equity. According to according to
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

 Yoo and Donthu (2001), the related issues on brand equity include the positive effect of brand equity on a company's future profits and long-term cash flow, a consumer's willingness to pay Willingness to pay (WTP) generally refers to the value of a good to a person as what they are willing to pay, sacrifice or exchange for it. See also
  • Becker-DeGroot-Marschak method
 premium prices, merger and acquisition decision making, stock prices, sustainable competitive advantage, and marketing success. However, understanding brand equity has been hampered due to a lack of consensus on the measurement of brand equity.

In his Equity Engine model of brand equity, Morgan (2000) identifies two classes of equity components: functional performance and affinity, which are emotional and intangible. The former is category-specific, while the latter is not. More specifically, the affinity component is the set of "universal rules" for the emotional side of branding that transcends any category. Furthermore, the affinity component is represented by three factors: authority (such as brand heritage, trust, and innovativeness), identification (such as bonding, caring, and nostalgia Nostalgia

village of narrator and family. [Fr. Lit.: Remembrance of Things Past]

Give My Regards to Broadway

singer sends well-wishes to home town. [Am. Pop.
) and approval (prestige, acceptability, and endorsement).

Brand equity can be defined in many contexts. According to Kim and Kim (2005), the main contexts include the added value Added value in financial analysis of shares is to be distinguished from value added. Used as a measure of shareholder value, calculated using the formula:

Added Value = Sales - Purchases - Labour Costs - Capital Costs
 endowed en·dow  
tr.v. en·dowed, en·dow·ing, en·dows
1. To provide with property, income, or a source of income.

 by the brand name (Farquhar 1989); brand loyalty, brand awareness, perceived quality, and brand association (Aaker 1991); differential effect of brand knowledge on consumer response to the marketing of the brand (Keller 1993); incremental utility (Simon and Sullivan 1993); total utility (Swait et al. 1993); and the difference between overall brand preference and multi-attributed preference based on objectively measured attribute levels (Park and Srinivasan 1994). In sum, brand equity can be defined as the incremental value of a product due to the brand name.

The literature has built up three main perspectives of brand equity: the financial perspective, the customer-based perspective, and the combined perspective (Keller 1993). The financial brand equity is based on the incremental discounted future cash flows that result from a branded product' s revenue over the revenue of an unbranded product. On the other hand, the customer-based brand equity is defined as the differential effect of brand knowledge on a customer' s response to the marketing of the brand (Keller 1993). The combined perspective incorporates both financial brand equity and customer-based brand equity. For a summary of previous research on brand equity, one may refer to Kim and Kim (2005).

This study focuses on the customer-based perspective of brand equity hereafter In the future.

The term hereafter is always used to indicate a future time—to the exclusion of both the past and present—in legal documents, statutes, and other similar papers.
. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[]

As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh.
 with Aaker (1991, 1996), Cobb-Walgren et al. (1995), and Yoo and Donthu (2001), the operationalizations of customer-based brand equity are divided into two categories: consumer perception and customer behavior (e.g., brand loyalty). Although some researchers define customer-based brand equity by only perceptual dimensions, Aaker (1991)'s definition of customer-based brand equity, which has been broadly accepted and employed by many researchers, includes both perceptual and behavioral dimensions. "Consumer-based" means a measurement of perceptual and/or behavioral brand equity at the individual consumer level through a consumer survey. Collectively, brand equity consists of four dimensions: brand awareness, perceived quality of brand, brand image (or associations), and brand loyalty (Aaker 1991, 1996). These dimensions may be used to explore the findings of marketing and consumer behavior research in relation to brand equity (Yoo and Donthu 2001). This study hypothesizes both perceptual and behavioral categories as the components of brand equity and a causal relationship between perceptual and behavioral dimensions. There are some advantages of taking both perceptual and behavioral dimensions into account when measuring brand equity, Consumer perceptions are clearly an antecedent ANTECEDENT. Something that goes before. In the construction of laws, agreements, and the like, reference is always to be made to the last antecedent; ad proximun antecedens fiat relatio.  to behavioral manifestations of brand equity. Although behavioral measures of purchase reflect the existence of equity, they fail to reveal the factors actually driving equity without measuring the perceptual dimension of brand equity (Cobb-Walgren et al. 1995).

Brand awareness is "the ability for a buyer to recognize or recall that a brand is a member of a certain product category" (Aaker 1991) and consists of both brand recognition and recall (Keller 1993). Awareness is argued as being a first and necessary, but not sufficient, step leading to trial and repeat purchases, because the effect of awareness results at best in product curiosity (Konecnik and Gartner 2007). Perceived quality is "the consumer's judgment about a product's overall excellence or superiority" (Zeithaml 1988) and therefore based on consumers' subjective evaluations on a combination of products, services, and experiences. Perceived quality has been widely agreed to be a vital element affecting consumer behavior. The consumer's opinion about the product's quality and its attributes with regard to its expected performance forms the measurement scale indicator of the brand quality perceived by individuals (Villarejo-Ramos and Sanchez-Franco 2005). Brand image is "a set of brand association that are anything linked in memory to a brand, usually in some meaningful way" (Aaker 1991) and can be defined as perceptions of an organization reflected in the associations held in consumer memory (Leone et al. 2006). Finally, brand loyalty is defined as "the attachment that a customer has to a brand" (Aaker 1991). Brand loyalty plays an outstanding role in generating brand equity not only because of its capacity to keep a customer loyal, but also because that customer's loyalty extends to brands in the company's portfolio (Villarejo-Ramos and Sanchez-Franco 2005).

In a study on destination brand equity, Konecnik and Gartner (2007) apply the three main components of image--namely, cognitive, affective affective /af·fec·tive/ (ah-fek´tiv) pertaining to affect.

1. Concerned with or arousing feelings or emotions; emotional.

, and conative--based on destination image research by Gartner (1993) so as to operationalize the dimension of brand equity (see Figure 1 ). The cognitive component constitutes awareness that is associated with what someone knows or thinks they know about a brand (destination). The affective component is built upon how one feels about this knowledge. The conative co·na·tion  
n. Psychology
The aspect of mental processes or behavior directed toward action or change and including impulse, desire, volition, and striving.
 component is then the action stage that relates to how one acts on the information and how they feel about a brand (destination). Konecnik and Gartner (2007) argue that brand awareness mostly influences the cognitive component and brand equity cannot be created without brand awareness. The dimensions of perceived quality and brand image influence the affective component more when attitudes and feelings toward what is known, i.e., brand awareness, are assessed. Finally, brand loyalty, attitudinal or behavioral, is pertinent to the conative component. Following the causal path of cognitive [right arrow] affective [right arrow] conative [right arrow] brand equity and based on past studies, the interrelationships between variables are hypothesized. The eight hypotheses with a conceptual model (see Figure 2) are proposed as follows:

H1: Brand awareness has a positive effect on perceived quality.

H2: Brand awareness has a positive effect on brand image.

H3: Perceived quality has a positive effect on brand image.

H4: Perceived quality has a positive effect on brand loyalty.

H5: Perceived quality has a positive direct effect on overall brand equity.

H6: Brand image has a positive effect on brand loyalty.

H7: Brand image has a positive direct effect on overall brand equity.

H8: Brand loyalty has a positive effect on overall brand equity.



The purposes of this study are to examine an airline brand equity model of the international passengers in Taiwan based on four dimensions of brand awareness, brand image, perceived quality, and brand loyalty, and to probe the inter-relationships among four dimensions and their influences on brand equity. This section provides an overview of the research methods that are used to answer the proposed research hypotheses introduced. The questionnaire design is described first, followed by an explanation of our research approach and respondent In Equity practice, the party who answers a bill or other proceeding in equity. The party against whom an appeal or motion, an application for a court order, is instituted and who is required to answer in order to protect his or her interests.  profile as well as empirical data analysis.


Questionnaire Design

The questionnaire was designed as a survey instrument including all constructs of the proposed model to investigate the hypotheses of interest. The questions in the questionnaire are based on a review of the literature and specific airline industry characteristics. A pre-test was carried out with randomly selected air passengers at the Tainan airport Tainan Airport (Traditional Chinese: 臺南機場; formally "臺南航空站") (IATA: TNN, ICAO: RCNN  in southern Taiwan. Based on feedback from a pilot sample of thirty air passengers, the survey instrument was revised and finalized See finalization.  to improve clarity and content validity content validity,
n the degree to which an experiment or measurement actually reflects the variable it has been designed to measure.
 of the questionnaire.

The survey questionnaire consists of six sections. The first section is designed to obtain each respondent's attitudes toward an airline's brand awareness with a three-item, 5-point Likert-type scale based on Aaker (1996) and Yoo et al. (2000). The second section deals with the measurement of perceived airline quality with a twenty-one-item, 5-point Likert-type scale following Park (2007) and Park, Roberston, and Wu (2004). The perceived quality scale was structured by six dimensions: inf-light service (five items), reservation-related service (two items), airport service (four items), reliability (three items), employee service (five items), and flight availability (two items). The third section is designed to understand each respondent's perception of airline brand image with a three-item, 5-point Likert-type scale based on Park (2007). The fourth section deals with the measurement of airline brand loyalty with three items using a 5-point Likert type scale based on Park, Roberston, and Wu (2004), and Yoo et al. (2000). The fifth section identifies each respondent's overall perception of airline brand equity with a four-item, 5-point Likert-type scale drawn from previous studies (Yasin, Noor, and Mohamad 2007; Yoo, Donthu, and Lee 2000). The items of each construct are stated in the Appendix. Respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy.  are asked to indicate their agreement level of each item of the first five sections on the 5-point Likert scale Likert scale A subjective scoring system that allows a person being surveyed to quantify likes and preferences on a 5-point scale, with 1 being the least important, relevant, interesting, most ho-hum, or other, and 5 being most excellent, yeehah important, etc  anchored by "strongly disagree (=1)" to "strongly agree (=5)." The sixth section reports respondents' demographic information and trip behavioral information with seven items--gender, age, marital status marital status,
n the legal standing of a person in regard to his or her marriage state.
, education level, occupation, monthly income, and trip purpose--via a categorical That which is unqualified or unconditional.

A categorical imperative is a rule, command, or moral obligation that is absolutely and universally binding.

Categorical is also used to describe programs limited to or designed for certain classes of people.

Data Collection

A self-administered questionnaire survey was conducted at Taoyuan International Airport in Taiwan during February 2008. This study adopts the convenience sampling approach due to an unknown population of air passengers. International passengers were invited to participate in the survey and assured of confidentiality in reporting before a questionnaire was delivered. Three hundred questionnaires were distributed and 249 valid samples were obtained after excluding the incomplete ones, yielding an 83.0 percent response rate.

The respondent data consist of almost an even share of male (50.6 percent) and female (49.4 percent) respondents. The great majority of the respondents are aged between 26 and 35 years old (37.4 percent). Of the sample, 58.6 percent are single, 43.8 percent are white-collar, and 86.3 percent hold a university degree or higher. The great majority of the respondents (37.8 percent) have monthly income between NT$30,000 (or US$985) and NT$60,000 (or US$1,970). Most of the respondents are flying for leisure purposes (57.8 percent).

Data Analysis

In line with the two-step approach proposed by Anderson and Gerbing (1988), a measurement model was tested before testing the structural model. Confirmatory factor analysis In statistics, confirmatory factor analysis (CFA) is a special form of factor analysis. It is used to assess the the number of factors and the loadings of variables.  (CFA) and structural equation modeling (SEM) analysis were used to check construct validity construct validity,
n the degree to which an experimentally-determined definition matches the theoretical definition.
 and the goodness-of-fit indices for the measurement and structural models and to further examine the relationships among constructs under investigation.


Measurement Model

Since the scale of perceived quality in this study was adopted from Park (2007) and Park et al. (2004), a confirmatory factor analysis was conducted to ensure the factor structure of perceived quality that consists of twenty-one items under six dimensions. One item of flight availability dimension was deleted Deleted

A security that is no longer included on a specified market. Sometimes referred to as "delisted".

Reasons for delisting include violating regulations, failing to meet financial specifications set out by the stock exchange and going bankrupt.
 due to its standardized factor loading being less than 0.5. According to the indices of goodness-of-fit, the perceived value scale reveals a well-structured dimensionality. Due to the space limit, the CFA results of perceived quality are not reported here, but are available from the authors upon request. The subsequent analysis uses the summated variables of perceived quality calculated from the means of the items for each dimension as indicators of perceived quality in the conceptual model.

Before conducting the path analysis, this study examines the validity and reliability of the constructs by confirmatory factor analysis. According to the goodness-of-fit indices from CFA, the measurement model proves parsimonious par·si·mo·ni·ous  
Excessively sparing or frugal.

. More specifically, although the Chi-square statistic statistic,
n a value or number that describes a series of quantitative observations or measures; a value calculated from a sample.


a numerical value calculated from a number of observations in order to summarize them.
 ([chi square chi square (kī),
n a nonparametric statistic used with discrete data in the form of frequency count (nominal data) or percentages or proportions that can be reduced to frequencies.
] = 330.6, d.f. = 142) is significant, the ratio of the Chi-square value to degrees of freedom ([chi square]/d.f. = 2.33) is less than the cut-off value of 3 suggested by Bagozzi and Yi (1988). Furthermore, other indices such as CFI CFI
cost, freight, and insurance
 (0.95) and NNFI NNFI Non-Normed Fit Index (statistics)  (0.97) are greater than the recommended value of 0.9. The root-mean-square error of approximation approximation /ap·prox·i·ma·tion/ (ah-prok?si-ma´shun)
1. the act or process of bringing into proximity or apposition.

2. a numerical value of limited accuracy.
 (RMSEA) is 0.07, which is less than 0.10 (Hair et al. 2006).

The adequacy of each multi-item scale in capturing its respective construct is subsequently examined. Convergent validity Convergent validity is the degree to which an operation is similar to (converges on) other operations that it theoretically should also be similar to. For instance, to show the convergent validity of a test of mathematics skills, the scores on the test can be correlated with scores  is expected when each measurement's estimated pattern coefficient coefficient /co·ef·fi·cient/ (ko?ah-fish´int)
1. an expression of the change or effect produced by variation in certain factors, or of the ratio between two different quantities.

 on its underlying construct factor is significant. The internal validity Internal validity is a form of experimental validity [1]. An experiment is said to possess internal validity if it properly demonstrates a causal relation between two variables [2] [3].  of the measurement model is examined by calculating the construct reliability and average variance extracted (AVE). As seen in Table 1, the construct reliabilities of the five constructs range from 0.85 to 0.95 and are well above the recommended value of 0.7 (Hair et al. 2006). The AVE of each measure ranges from 0.53 to 0.79, which is more than 50 percent of the variance as suggested by Bagozzi and Yi (1988) and indicates that the variance captured by the construct is greater than the variance due to measurement error (Fornell and Larcker 1981). In addition, as seen in Table 2, a squared root of AVE for each construct is greater than the correlation coefficients of corresponding inter-constructs, confirming discriminant validity Discriminant validity describes the degree to which the operationalization is not similar to (diverges from) other operationalizations that it theoretically should not be similar to.  (Fornell and Larcker 1981). Therefore, the internal validity of the measurement model is adequate. Moreover, a descriptive analysis was run on each construct to measure their means: brand awareness (3.75), perceived quality (3.68), brand image (3.45), brand loyalty (3.55), and overall brand equity (3.38).

Structural Model and Test of Hypotheses

The study takes the simultaneous maximum-likelihood-estimation procedures to examine the hypothesized relationships among brand equity, brand preference, and purchase intentions. Figure 3 reports the goodness-of-fit indices of the final estimated structural model. The chi-square statistic ([chi square] = 338.84, d.f. = 144) is significant; however, the ratio of the chi-square value to degrees of freedom ([chi square]/d.f. = 2.35) is less than 3. Other fit indices, including CFI (0.98), NNFI (0.97), and RMSEA (0.07), indicate that the structural model has a reasonable explanation of the observed covariance Covariance

A measure of the degree to which returns on two risky assets move in tandem. A positive covariance means that asset returns move together. A negative covariance means returns vary inversely.
 among the constructs of interest.

Regarding the hypothesis tests, as shown in Table 3, six out of eight hypothesized relationships are supported in the estimated structural model except for [H.sub.5]: perceived quality [right arrow] overall brand equity and [H.sub.7]: brand image [right arrow] overall brand equity. As shown in Figure 3, brand awareness has significant positive effects on both perceived quality ([[gamma].sub.1] = .40, t-value = 5.30) and brand image ([[gamma].sub.2] = .21, t-value = 3.26). Hence, [H.sub.1] and [H.sub.2] are supported. Furthermore, perceived quality also has significant positive effects on brand image ([[gamma].sub.3] = 0.57, t-value = 7.13) as well as brand loyalty ([[gamma].sub.4] = 0.34, t-value = 5.03), indicating that [H.sub.3] and [H.sub.4] are supported. A significant positive effect of brand image on brand loyalty ([[gamma].sub.6]= 0.58, t-value = 8.81) is also found, and thus [H.sub.6] is supported. Finally, brand loyalty is found to have a significant positive effect on overall brand equity ([[gamma].sub.8] = 0.74, t-value = 8.26), and thus [H.sub.8] is supported.

Table 4 reports the direct, indirect, and total effects of independent variables on the overall brand equity. The results show that only brand loyalty has a direct effect on overall brand equity while brand awareness, perceived quality, and brand image have indirect effects on overall brand equity. The total effect of individual variables on overall brand equity is calculated from the sum of direct and indirect effects. The total effect of brand loyalty on overall brand equity is 0.74, equaling its direct effect due to no indirect effect. The total effect of brand awareness on overall brand equity is 0.36, equaling its indirect effect from no direct effect. The effect of perceived quality on overall brand equity is 0.64, which consists of a direct effect of 0.l0 and an indirect effect of 0.54. Finally the total effect of brand image on overall brand equity is 0.50, including a direct effect of 0.07 and an indirect effect of 0.43. These results reveal that brand loyalty is the most influential determinant of overall brand equity according to its largest effect. Additionally, brand awareness, perceived quality, and brand loyalty show their effects indirectly through the mediation mediation, in law, type of intervention in which the disputing parties accept the offer of a third party to recommend a solution for their controversy. Mediation has long been a part of international law, frequently involving the use of an international commission,  of brand loyalty. The effect of perceived quality on overall brand equity is greater than those of brand awareness and brand image, indicating the importance of perceived quality in the process of creation of brand equity.



This study adopts both perceptual and behavioral dimensions of brand equity and proposes a relationship model of brand equity involving brand awareness, perceived quality, brand image, and brand loyalty in the airline services context. Following the causal path of cognitive-affective-conative stage that is used to construct a customer-based destination brand equity by Konecnik and Gartner (2007), we construct a customer-based brand equity scale for an airline. The empirical results reveal the adequacy of constructing the causal relationship among various components of brand equity, i.e., brand awareness, perceived quality, brand image, and brand loyalty, based on the cognitive-affective-conative theory. More specifically, this study theorizes brand awareness, perceived quality and brand image, and brand loyalty as cognitive, affective, and conative stages of brand equity creation, respectively. The brand awareness is important because it helps a certain airline become a customer's decision choice set. In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke"
put differently
, if customers are not aware of a certain airline when they search for a certain airline, then it is very unlikely for them to choose this airline. This is in line with Konecnik and Gartner (2007) whereby brand awareness mostly influences the cognitive component, and brand equity cannot be created without brand awareness. Therefore, airlines are advised to look carefully at their brand marketing communication strategy to help maintain customer recognition of an airline's brand-name compared to its competitors.

The affective stage, which includes perceived quality and brand image, represents a customer's evaluations of the purchase experience and the association related to the brand with the airline's tangible and intangible attributes based upon quality perception. A good service quality perceived by customers leads to a good image held in their memory related to an airline. Furthermore, the positive influences of effective perceptions and attitudes toward an airline result in positive conative outcomes, whether attitudinal or behavioral. Positive conative outcomes can form customer loyalty and reflect on their willingness to repurchase re·pur·chase  
tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es
To buy (something) again.

The act of buying something that one previously sold or owned.

Noun 1.
 or recommend this airline to others.

The results pertaining per·tain  
intr.v. per·tained, per·tain·ing, per·tains
1. To have reference; relate: evidence that pertains to the accident.

 to the direct and largest effect of brand loyalty on overall brand equity and only the indirect effects of perceived quality and brand image mediated me·di·ate  
v. me·di·at·ed, me·di·at·ing, me·di·ates
1. To resolve or settle (differences) by working with all the conflicting parties:
 by brand loyalty on overall brand equity imply the crucial role that brand loyalty plays in creating a company's brand equity. According to the perceptual-behavioral causal path, the investments and activities that airlines devote themselves to in facilitating customers' perceptual brand equity in terms of brand awareness, perceived quality, and brand image should clearly link to the ultimate goal of forming brand loyalty. If there is a failure to build customers' brand loyalty, then the investment performance of an airline's branding management implementation is likely to be undesirable.

Some antecedents affecting airline brand equity--for example, a company's marketing communications Marketing communications (or marcom) are messages and related media used to communicate with a market. Those who practice advertising, branding, direct marketing, graphic design, marketing, packaging, promotion, publicity, sponsorship, public relations, sales, sales  and price promotion--are not taken into account, but deserve more research efforts in the future. A company's advertising spending, which always represents marketing communications and which makes the brand name be more recognizable by customers, is believed to have a positive influence on both perceived quality and brand image, such that the more resources a company dedicates to enhance a particular brand, the higher the perceived quality and brand image the brand is expected to have. In addition, marketing communications affect perceived quality as they increase the associated value of a brand, which helps in purchase intention (Villarejo-Ramos and Sanchez-Franco 2005). However, in the context of the airline industry, price promotion from competitors is always a disturbance DISTURBANCE, torts. A wrong done to an incorporeal hereditament, by hindering or disquieting the owner in the enjoyment of it. Finch. L. 187; 3 Bl. Com. 235; 1 Swift's Dig. 522; Com. Dig. Action upon the case for a disturbance, Pleader, 3 I 6; 1 Serg. & Rawle, 298.  of brand equity, which is believed to make customers willing to pay premium prices. The recent success of low-cost airlines and their impact on full-service airlines is a typical example. Empirical research Noun 1. empirical research - an empirical search for knowledge
inquiry, research, enquiry - a search for knowledge; "their pottery deserves more research than it has received"
 on how customers trade off between price and brand equity, which consists of a mix of various dimensions and requires financial investment in branding management, is of special importance, but still rather rare. Future research could focus on the issue of a customer' s willingness to pay for an airline "brand equity" by applying revealed and/or stated preference techniques. In addition, if data are available, brand loyalty could be better measured based on actual ticket purchases, rather than on passengers' answers, to minimize the effect of subjective passenger perception. Future research also could incorporate actual behavior data from passengers into the airline brand equity to obtain more insights for airlines' branding management strategies.


Measurement scales (5-point Likert type scale, 1= strongly disagree, 5= strongly agree)

Brand awareness

1. I am aware of this airline.

2. I can recognize this airline among other competing brands.

3. I know what this airline looks like.

Perceived quality

In-flight service

1. Up-to-date aircraft and in-flight facility.

2. Meal service.

3. Seating comfort.

4. Seat space and legroom leg·room  
Room in which to stretch the legs while seated.


space to move one's legs comfortably, as in a car

legroom n

5. In-flight entertainment services.

Reservation-related service

1. Convenience of reservation and ticketing.

2. Promptness and accuracy of reservation and ticketing.

Airport service

1. Check in service.

2. Promptness and accuracy of baggage delivery.

3. Seat allocation.

4. The amount imposed for overweight Overweight

Refers to an investment position that is larger than the generally accepted benchmark.

For example, if a company normally holds a portfolio whose weighting of cash is 10%, and then increases cash holdings to 15%, the portfolio would have an overweight


1. On time performance.

2. Sincere interest in solving problems.

3. Safety record.

Employee service

1. Neat appearance of employees.

2. Employees who are willing to help passengers.

3. Courtesy of employees.

4. Employees who have the knowledge to answer passenger's questions.

5. Give passengers personal attention.

Flight availability

1. Convenient flight schedule.

2. Availability of non-stop flight. *

* Item was removed after CFA

Brand image

1. The airline is a brand leader.

2. Using the airline is a social status symbol.

3. The airline has a good reputation.

4. The airline is recommended by famous people with whom you identify.

Brand loyalty

1. I would consider flying on the airline again in the future.

2. I would recommend this airline to other people.

3. I consider myself to be loyal to the airline.

Overall brand equity

I. Even if another brand has the same features as this airline, I would prefer to fly this airline.

2. If there is another brand as good as this airline, I prefer to fly this airline.

3. If I have to choose among brands of airline, this airline is definitely my choice.

4. If I have to choose an airline I plan to choose this airline even though there other brands as good as this airline.

5. Even if another brand has the same price as this airline, I prefer to choose this airline.


Aaker, D. A., 1991. Managing Brand Equity. New York New York, state, United States
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Mr. Chen is associate professor, Department of Transportation and Communication Management Science, National Cheng Kung University, Tainan, 701, Taiwan; e-mail Mr. Tseng is master student, Department of Transportation and Communication Management Science, National Cheng Kung University, Taiwan.

The authors are grateful to the National Science Council (NSC NSC
National Security Council

Noun 1. NSC - a committee in the executive branch of government that advises the president on foreign and military and national security; supervises the Central Intelligence Agency
), Taiwan, for financial support (NSC 96-2416-H-006-018).
Table 1. Confirmatorv Factor Analysis Results

                                       factor       Error
 Construct         Indicator          loading      variance

Brand                 AW1               0.79         0.38
Awareness             AW2               0.70         0.51
(AW)                  AW3               0.92         0.15

Perceived       PQ1 (In-flight)         0.64         0.59
Quality        PQ2 (Reservation)        0.72         0.48
(PQ)             PQ3 (Airport)          0.79         0.38
               PQ4 (Reliability)        0.76         0.42
                 PQ5 (Employee)         0.77         0.40
               PQ6 (Availability)       0.66         0.56

Brand Image          Image1             0.86         0.26
BI                   Image2             0.88         0.23
                     Image3             0.87         0.24

Brand               Loyalty1            0.90         0.18
Loyalty             Loyalty2            0.94         0.12
(BL)                Loyalty3            0.82         0.33

Overall               OBE1              0.94         0.12
Brand Equity          OBE2              0.89         0.21
(OBE)                 OBE3              0.89         0.21
                      OBE4              0.80         0.36

                                     Construct    variance
                                    reliability   extracted
 Construct         Indicator           (CR)         (AVE)

Brand                 AW1              0.85         0.66
Awareness             AW2
(AW)                  AW3

Perceived       PQ1 (In-flight)        0.87         0.53
Quality        PQ2 (Reservation)
(PQ)             PQ3 (Airport)
               PQ4 (Reliability)
                 PQ5 (Employee)
               PQ6 (Availability)

Brand Image          Image1            0.90         0.76
BI                   Image2

Brand               Loyalty1           0.92         0.79
Loyalty             Loyalty2
(BL)                Loyalty3

Overall               OBE1             0.93         0.78
Brand Equity          OBE2
(OBE)                 OBE3

Table 2. Correlation Matrix of Constructs

Construct          Mean       S.D.        BA         PQ         BI

Brand              3.75       0.88       0.81
Awareness (BA)

Perceived          3.68       0.54       0.40       0.73
Quality (PQ)

Brand Image        3.46       0.82       0.44       0.65       0.87

Brand Loyalty      3.55       0.87       0.39       0.72       0.81

Overall Brand      3.38       0.91       0.36       0.68       0.73
Equity (OBE)

Construct           BL        OBE

Awareness (BA)

Quality (PQ)

Brand Image

Brand Loyalty      0.89

Overall Brand      0.86       0.88
Equity (OBE)

Note: The values at diagonal are square roots of average variance

Table 3. Hypothesis Tests

                          Path                             Estimate

H1: Brand Awareness [right arrow] Perceived Quality          0.40
H2: Brand Awareness [right arrow] Brand Image                0.21
H3: Perceived Quality [right arrow] Brand Image              0.57
H4: Perceived Quality [right arrow] Brand Loyalty            0.34
H5: Perceived Quality [right arrow] Overall Brand Equity     0.10
H6: Brand Image [right arrow] Brand Loyalty                  0.58
H7: Brand Image [right arrow] Overall Brand Equity           0.06
H8: Brand Loyalty [right arrow] Overall Brand Equity         0.74

                          Path                             t-value

H1: Brand Awareness [right arrow] Perceived Quality        5.30 **
H2: Brand Awareness [right arrow] Brand Image              3.26 **
H3: Perceived Quality [right arrow] Brand Image            7.13 **
H4: Perceived Quality [right arrow] Brand Loyalty          5.03 **
H5: Perceived Quality [right arrow] Overall Brand Equity   1.54
H6: Brand Image [right arrow] Brand Loyalty                8.81 **
H7: Brand Image [right arrow] Overall Brand Equity         0.84
H8: Brand Loyalty [right arrow] Overall Brand Equity       8.26 **

                          Path                                test

H1: Brand Awareness [right arrow] Perceived Quality        Supported
H2: Brand Awareness [right arrow] Brand Image              Supported
H3: Perceived Quality [right arrow] Brand Image            Supported
H4: Perceived Quality [right arrow] Brand Loyalty          Supported
H5: Perceived Quality [right arrow] Overall Brand Equity    Rejected
H6: Brand Image [right arrow] Brand Loyalty                Supported
H7: Brand Image [right arrow] Overall Brand Equity          Rejected
H8: Brand Loyalty [right arrow] Overall Brand Equity       Supported

** p<0.05.

Table 4. Direct. Indirect. and Total Effects of Brand Equity

             Path                     Effect        Estimates   t-value

Brand Awareness [right arrow]     Indirect effect     0.36      6.52 **
  Overall Brand Equity             Direct effect       --
                                   Total effect       0.36      6.52 **

Perceived Quality [right arrow]   Indirect effect     0.54      7.16 **
  Overall Brand Equity             Direct effect      0.10        --
                                   Total effect       0.64      8.26 **

Brand Image [right arrow]         Indirect effect     0.43      6.14 **
  Overall Brand Equity             Direct effect      0.07        --
                                   Total effect       0.50      7.05 **

Brand Loyalty [right arrow]       Indirect effect      --         --
  Overall Brand Equity             Direct effect      0.74      8.26 **
                                   Total effect       0.74      8.26 **
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Author:Chen, Ching-Fu; Tseng, Wen-Shiang
Publication:Transportation Journal
Date:Jan 1, 2010
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