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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 3, NO 8

Impact of Brand Awareness, Perceived Quality and Customer Loyalty on Brand

Profitability and Purchase Intention: A Resellers View

Nazia Yaseen
Foundation University Islamabad
Mariam Tahira
Foundation University Islamabad
Amir Gulzar, (Corresponding Author)
Assistant Professor
Foundation University Islamabad
Ayesha Anwar
Foundation University Islamabad

Abstract
The study is to investigate resellers point of view about the impact of brand awareness, perceived quality and
customer loyalty on brand profitability and purchase intention. Further the study is also focused on finding out
the mediating role of purchase intension on the relationship of brand awareness and profitability, perceived
quality and profitability and brand loyalty and profitability. The study was causal in nature and data was
collected from 200 resellers. The results showed insignificant impact of brand awareness and loyalty whereas
significant impact of perceived quality on profitability. Further the results revealed significant impact of brand
awareness, perceived quality and loyalty on purchase intention. Sobel test for mediation showed that purchase
intension mediates the relationship of the perceived quality and profitability only.
Keywords: Impact ; Brand Awareness; Perceived Quality ; Customer Loyalty ; Brand Profitability ; Purchase
Intention; Resellers View
1. Introduction
In recent times, the increase of buyer awareness has made buyers want to pay for their recognizable and
constructive brand. Thus, it is important for businesses to create attraction in their brands to be in better position
than their competitors. This is evident that the consumers disseminate and always willing to acquire a product,
so here the brand awareness is always a vital factor to manipulate the buying decisions and purchase intensions
(Macdonald and Sharp, 2000). Retailer as well as purchase behavior of consumer slants if a product comprises
of elevated alertness regarding the brand (Grewal, Monroe & Krishnan, 1998).Profitability performance tends to
have positive relationship with brand awareness. Profitability performance is a monetary input of brand to the
revenue of the retailer. The fundamental reason is that superior plane of responsiveness will direct to elevated
buying behavior. Cutomers having no knowledge of the brand will have no intension of buying it either. High
brand awareness can influence the retailers or resellers purchase decision (Grewal, Monroe & Krishnan, 1998).
The purchase decision is also influenced by the perceived quality which is also an aspect of brand value that
makes consumers pay for certain products or services (Aaker, 1991; Zeithaml, 1988). apparent value can assist
buyers for skewed verdict on the whole product set that make a product hold a most significant partiality and
also its turn into a sharp product in patrons mind as well as also increase the interest of retailer to give best
place to the specific product in market space. (Aaker,1991). Many researches have inspected the effects of
professed excellence on productivity (e.g. Jacobson and Aaker, 1987).
Though, only brand alertness and professed quality do not pledge of purchase and specifically repurchase
intensions. The importance of brand loyalty cannot be ignored. Where brand awareness and perceived quality is
necessary for the purchase of the brand, the loyalty is guarantee of purchase as according to Oliver (1997),
brand loyalty plays a vital role in purchase, repurchase and switching behavior. So all three are significant for
the purchase and purchase intentions. Aaker and Jacobson, (1994) concluded that towering level of brand
loyalty considerably augment sales of a brand as well as increase the economic value of the brand. Loyal buyers
are not as much of have an effect on them by price rivalry. Superior sales are to boost product productivity,
calculating nix uneven boost in expenses. Moreover loyalty is also important due the fact that the price to catch
the attention of a new customer considerably. (Reichheld and Sasser, 1990; Barsky, 1994).
The brand profitability that upholds (i) a product or manufacturing goods as the income that it attract, and are
used to make sure its stamina and growth to further better recognize how this production profitability is affected
(Donna Sundblad, 2005) and (ii) the outcome all of these brand awareness, perceived quality, brand loyalty and
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brand profitability that further give help to generate a plan to make purchase intention which is basically a
degree of preparation a specific good or services in the future.
1.1 Problem Statement
The study is to investigate the impact of brand awareness, perceived quality and brand loyalty on brand
profitability with mediating effect of purchase intentions.
1.2 Knowledge gap
There is vast literature available on the impact of brand awareness (Keller, 1993; Macdonald & Sharp, 2000),
perceived quality and loyalty (Dodds et al., 1991) and with respect to profitability and purchase intensions,
(Aaker and Jacobson, 1994) from the consumer and company perspective. The literature is lacking in the
knowledge of how above said dimensions influence reseller to have a preference for one brand over others. The
current study is focused on how reseller is influenced by the brand awareness, perceived quality, brand loyalty,
profitability and purchase intensions to fill such gap. Further the study is focused on the relationship of brand
awareness, perceived quality and loyalty to purchase intensions and profitability resellers point of view.
1.3 Objective of the Statement
These are the objectives of the statement:
To find out the influence of brand awareness, perceived quality, brand loyalty and purchase
intentionsonbrandprofitability
Tofindoutwhetherpurchaseintentionmediatestherelationbetweenbrandawarenessandbrand
profitability.
Tofindoutwhetherpurchaseintentionmediatestherelationbetweenperceivedqualityandbrand
profitability.
To find out whether purchase intention mediates the relation between brand loyalty and brand
profitability.
1.4 Practical Implications
The study would be helpful to understand how resellers are influenced with respect to brand awareness,
perceived quality and brand loyalty while considering the purchase intensions and profitability. Companies can
influence resellers positively by focusing on the results of the study.
2 Review of Literature
Ability of a retailer and consumer to organize and recall a brand is known as brand awareness (Aaker, 1996).
Brand recall means when retailer as well as consumers watch a manufactured goods set, they can evoke a
product name completely, and brand acknowledgment signify retailer and customers also has capability to
recognize a brand when it is prompt. Hoeffler & Keller (2002) identified intensity and width as measures of
brand awareness. If a product has brand concentration and size simultaneously, then firstly the retailer and then
consumers will think of a particular brand whenever going for buying if product has huge awareness.
Furthermore, brand name is very important factor in building a image of the brand (Davis, Golicic & Marquardt,
2008). A brand name offers a character that will help retailer and consumers to spot service providers and to
expect the outcomes of the service (Turley & Moore, 1995). Brand consciousness will have an impact on buying
purpose as customers have a tendency to pay money for a known and famous product (Keller, 1993; Macdonald
& Sharp, 2000). Brand consciousness makes customers to be aware with a product from a creation group line
and then build an intension of purchase (Percy & Rossiter, 1992). A product with high brand awareness will
obtain more retailers as well as consumer fondness because it has increased market share and quality belief
attached with it (Dodds et al., 1991). Kan (2002) therefore suggests more brand awareness will lead to increased
profitability evaluation.
From the above discussion the following hypothesis may be inferred:
H1. Brand awareness significantly influences the purchase intension.
H2. Brand awareness significantly influences the profitability.
H3. Purchase intension mediates the relationship of brand awareness and profitability.

apparent excellence is a user verdict on the total creation advantages and negativity towards quality of the
product (Dodds et al., 1991). Aaker (1991) dibates that apparent eminence can prove the outstanding
segregation of a creation or a service and results in being most preferred in consumers thinking. Manufacturers,
retailer and consumers have always different analysis on the decision regarding the quality magnitude (Aaker,
1996). Though patrons have enough information, they may be inadequate in point in time and stimulation to do
added decision, and in the closing stages they can only choose minor vital information and make any decision
on quality (Wan, 2006). Perceived quality can be influenced by concerns such as past experience, education
picked out jeopardy and provisional variables such as purchase cause, pay for state, occasion force, and
community settings of customers (Holbrook & Corfman, 1985). Garretson and Clow (1999) propose that
recognized class will sway customer trade idea, and Monore (1990) shows that choosen out quality will
optimistically control buy purpose through apparent value. If a manufactured goods has superior make alertness
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it will have a superior market split and a improved eminence appraisal and lastly lift the brand profitability
(Dodds, et al., 1991; Grewal, et al., 1998).
Following hypothesis may be inferred from the above discussion:
H4. Perceived quality significantly influences the purchase intension.
H5. Perceived quality significantly influences the profitability.
H6. Purchase intension mediates the relationship of perceived quality and profitability.
H7. Purchase intension significantly influences the profitability.

Brand devotion signifies product fondness that users wont think of supplementary brands when they acquire a
manufactured goods (Cavero & Cebollada, 1997). Brand faithfulness assures the repurchase of the identical
brand (Oliver, 1999). Product faithfulness comprises performance features and approach factors. Behavior
devotion symbolizes repurchase activities, and devotion loom potrays psychosomatic pledge to a product
(Assael, 1998; Oliver, 1999). Bloemer and Kasper (1995) suggest that a genuine brand devotion should include
brand penchant and repurchase a behavior that is in attendance in a extended phrase promise, product
compulsion and psychosomatic dispensation (choice making alongwith assessment). Parasuraman and Grewal
(2000) suggest that the added optimistic retailer contract observations are, the powerful buyer fidelity is. Brand
loyalty is a repurchase promise that vow regulars will repurchase their constructive brands in the future, and
they will not change their loyalty under whichever condition (Oliver, 1999). Consumers must have encouraging
feelings as well as complete pleasure toward brand, and then they will create purchase purpose and give
supremacy to brand loyalty which further enhances brand profitability (Assael, 1998; Wang and Kan, 2002).
The following hypothesis may be inferred from the above discussion:
H8. Brand loyalty significantly influences the purchase intension.
H9. Brand loyalty significantly influences the profitability.
H10. Purchase intension mediates the relationship of brand loyalty and profitability.
Following is the hypothetical diagram of the relationship of variables:

Brand awareness
Purchase intention

Perceived quality

Brand profitability
Customer loyalty
Source: Researchers proposed model
3. Research Methodology
The study is cross sectional in nature and follows the causal research design. The data was collected from 200
retailers about the two brands i.e. LOreal and Garnier. The retailers were selected to collect the data as the
study was focused on resellers view. Convenience sampling technique was used to collect the data. Self
administered questionnaire was used for the data collection which was adopted form the study of Artur Baldauf,
Karen S. Cravens, Gudrun Binder, (2003).
3.1 Reliability for the instrument
Alpha reliability value for all variables stands more than 0.7 showing the internal consistency of the
questionnaire.

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4. Data Analysis and Discussion

Correlation and regression analysis were used to analyze the data and to measure the hypothesis which were not
mediation based. Sobel test was used to check the mediation and measure the hypothesis of mediation.
Correlation analysis was used as a prerequisite of Sobel test.
4.1 Hypotheses Testing
Table 4.1 Regression Analysis of Brand Awareness, Perceived Quality, Customer Loyalty, Purchase
Intension and Profitability
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 1.463 .350 4.178 .000
brandawareness .117 .076 .107 1.538 .126
perceivedquality .177 .071 .176 2.481 .014
customerloyalty .099 .074 .092 1.348 .179
purchaseintension .189 .043 .294 4.356 .000
a. Dependent Variable: profitability
source: Field Data

Table 4.2 Regression Analysis of Brand Awareness, Perceived Quality, Customer Loyalty and Purchase
Intension
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) .855 .573 1.492 .137
brandawareness .269 .123 .159 2.182 .030
perceivedquality .212 .116 .146 2.028 .054
customerloyalty .290 .119 .174 2.437 .016
a. Dependent Variable: purchaseintension
source: Field Data

Table 4.3 Regression Analysis Purchase Intension and Profitability

Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 2.725 .165 16.521 .000
purchaseintension .250 .042 .389 5.922 .000
a. Dependent Variable: profitability
Source: Field Data

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Table 4.4 Sobel Test for the mediation of purchase intensions

Sobel Test Statistics Std. Error p-value

Perceived Quality and 1.96224816 0.02700984 0.0497336

Profitability
Mediator: Purchase Intension
Source: Field Data
The first hypothesis of the study was brand awareness significantly influences the purchase intension.
Regression analysis (table 4.2) showed that there was a significant influence of brand awareness on purchase
intension with a beta value .146 showing the strength of the relationship i.e. almost 15%. The study is in line
with the findings of Macdonald & Sharp, (2000) who concluded that brand awareness plays a positive role on
the purchase intensions. Second hypothesis of the study was brand awareness significantly influences the
profitability. According to regression analysis (table 4.1) there is no significant relationship between brand
awareness and the profitability. So the null hypothesis is accepted. The possible reason may be that retailers are
not concerned with the awareness rather they just concerned with their profits or it could be that both of the
brands which were taken for the study were already known brands so no impact of awareness could be identified
on profitability. Third hypothesis was that purchase intension mediates the relationship of brand awareness and
profitability. As no influence of awareness on profitability is identified so mediation test could not be run as it is
a prerequisite of mediation that there must be an influence of independent variable on the dependent for the
calculation of mediation. The fourth hypothesis of the study was perceived quality significantly influences the
purchase intension. Regression analysis (table 4.2) showed that there was a significant influence of perceived
quality on purchase intension with a beta value .159 showing the strength of the relationship i.e. almost 16%.
The study is in line with the findings of Garretson and Clow, (1999) who concluded that perceived quality plays
a positive role on the purchase intensions. The fifth hypothesis of the study was perceived quality significantly
influences the profitability. Regression analysis (table 4.1) showed that there was a significant influence of
perceived quality on profitability with a beta value .176 showing the strength of the relationship i.e. almost 18%.
The findings are in line with the study of Grewal, et al., (1998) who concluded that perceived quality is
responsible for the increase in market share and the profitability. The sixth hypothesis of the study was purchase
intension mediates the relationship of perceived quality and profitability. The Sobel test (table 4.4) proved the
alternate hypothesis with p-value less than .05 i.e. purchase intension mediates the relationship of perceived
quality and profitability. The seventh hypothesis was that purchase intension significantly influences the
profitability. Regression analysis (table 4.3) showed that there was a significant influence of purchase intension
on profitability with a beta value .389 showing the strength of the relationship i.e. almost 39%.
The eighth hypothesis of the study was brand loyalty significantly influences the purchase intension. Regression
analysis (table 4.2) showed that there was a significant influence of brand loyalty on purchase intension with a
beta value .174 showing the strength of the relationship i.e. almost 17%. The study is in line with the findings of
Bloemer and Kasper (1995) who concluded the positive role of the brand loyalty to purchase intension. The
ninth hypothesis of the study was brand loyalty significantly influences the profitability. According to regression
analysis (table 4.1) there is no significant relationship between brand awareness and the profitability. So the null
hypothesis is accepted. The possible reason may be that retailers are not concerned with the loyalty even and
just concerned if customers are purchasing or not. So retailers are just concerned with the purchase intension.
Tenth hypothesis was that purchase intension mediates the relationship of brand loyalty and profitability. As no
influence of loyalty on profitability is identified so mediation test could not be run as it is a prerequisite of
mediation that there must be an influence of independent variable on the dependent variable for the calculation
of mediation.
4.2 Conclusion and Recommendations
It is obvious from the study that retailers are more concerned with the purchase intensions of the customers and
quality of the brand. So to attract the retailers the brand managers have to work more on enhancing the purchase
intensions and quality so that more and more customer demands the brand (follow pull strategy). Moreover
purchase intention also mediates the relationship of the quality and profitability so the brand manager must also
focus on such relationship to get more desirability from retailers to demand their products.
4.4 Limitations
1. A sample of 200 may be small. A larger sample may conclude better results.
2. Data was collected only from retailers.
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