The purpose of this paper is to determine if the traditional approach to measuring brand equity applies to online companies.
This objective is pursued by: developing a measurement model of brand equity for online businesses; and testing the nomological validity of the model using structural equation modelling.
This study finds partial support for the application of the offline brand equity theoretical framework based on brand awareness, brand associations and loyalty for online companies. Brand loyalty and brand value associations directly create brand equity.
The study is cross‐sectional, the indicators or observable variables used in this study may not be deemed comprehensive enough, no interaction effects have been incorporated, and finally, the research study was based on a few online business retailers.
The results support the view that a consumer's perceived sense of value resulting from a transaction with an online business develops loyalty. Also, brand‐trust association and brand awareness indirectly contribute to creating brand equity through their influence on loyalty. Loyalty is by far the most important source of brand equity because of its direct influence and mediating role in creating brand equity.
While many studies have identified and ratified the importance of brand equity dimensions among traditional firms, few have tested the model with online companies.
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