A STUDY OF BRAND EQUITY AND INSTITUTIONAL IMAGE BETWEEN TWO HIGHER EDUCATIONAL

INSTITUTIONS

Lai HueyYih

HF 5415.3 L185 lOll Corporate Master in Business Administration

2012

Pusat Khidmat Maklumat Akademik UNlVERSm MALAYSIA SARAWAK

P.KHIOMAT MAKLUMAT AKAOEMIK

11111 1llllli'iiill 11111111 1000245998

A STUDY OF BRAND EQUITY AND INSTITUTIONAL IMAGE BETWEEN TWO HIGHER EDUCATIONAL

INSTITUTIONS

LAIHUEYYIH

A dissertation submitted in partial fulfillment of the requirements for the degree of Corporate Master in Business Administration

Faculty of Economics and Business UNIVERSITI MALAYSIA SARA W AK

2012

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APPROVAL PAGE

I certify that I have supervised and read this study and that in my opinion it confonns to

acceptable standards of scholarly presentation and is fully adequate, in scope and quality, as a

research paper for the degree of Corporate Master in Business Administration

Prof. Dr Ernest Cyril De Run Supervisor

This research paper was submitted to the Faculty of Economics and Business, UNIMAS and

is accepted as partial fulfillment of the requirement for the degree of Corporate Master in

Business Administration.

Prof. Dr Shazali Abu Mansor Dean, Faculty of Economics and Business

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STATEMENT OF ORIGINALITY

The work described in this Research Paper, entitled • I

I "A STUDY OF BRAND EQUITY AND INSTITUTIONAL IMAGE

BETWEEN TWO HIGHER EDUCATIONAL INSTITUTIONS"

is to the best of the author's knowledge that of the author except

where due reference is made.

~~VL-Date LAIHOtYYIH

(10031734)

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ABSTRACT

A STUDY OF BRAND EQUITY AND INSTITUTIONAL IMAGE

BETWEEN TWO HIGHER EDUCATIONAL INSTITUTIONS

By

LAIHUEYYIH

( ThiS study aims to investigate the brand equity and institutional image of two higher

educational institutions to determine if there is a difference between both variables between . the two higher educational institutions. Apart from that, it is also the interest of the study to

find out if there is a difference in parents' and students' view on brand equity and institutional

image The results revealed that brand equity and institutional image between both institutions

are different. Results also revealed that parents and students have different perception towards

the brand equity and institutional image of institutions. Implications towards marketing of the

institutions shall be considered . ..

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ABSTRAK

KAJIAN MENGENAl EKUITI JENAMA DAN IMEJ INSTITUSI ANT ARA DUA INSTITUSI PENDIDlKAN TINGGI

Oleh

LAIHUEYYIH

Kajian ini mengkaji mengenai ekuiti jenama dan imej institusi antara dua institusi pendidikan

tinggi untuk menentukan samada perbezaan wujud antara kedua-dua pembolehubah di antara

kedua-dua institusi pendidikan tinggi yang di~aji. Di samping itu, kajian turut mengkaji

samada perbezaan wujud antara persepsi ibu-bapa dan pelajar terhadap ekuitijenama dan imej

institusi. Dapatan kajian menunjukkan bahawa ekuiti jenama dan imej institusi antara kedua­

dua institusi pendidikan tinggi adalah berbeza. Keputusan turut menunjukkan bahawa persepsi

ibu-bapa dan pelajar terhadap ekuiti jenama dan imej institusi adalah berbeza. Implikasi

terhadap pemasaran institusi pendidikan tinggi harus dipertimbangkan.

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ACKNOWLEDGEMENT

Thousands of gratitude should be addressed to many people who have contributed in making

this research paper a success. To the following individuals, I am grateful for their valuable

contributions.

First and foremost, I would like to address my appreciation to Prof. Dr Ernest Cyril De Run.

As the supervisor for my study, he provided me with multiple expert advice and assistance in

carrying out the research. I am grateful for his great patience and guidance which has brought

me thus far.

I would also like to thank the respondents who willingly spare their time to answer my

questionnaire. Their cooperation has given me sufficient data to be analyzed. Without their

cooperation, I would not have been able to continue with the research.

Appreciation shall also be addressed to those in the Faculty of Economics and Business,

UNIMAS. Their dedications in carrying out their responsibilities made this course a success

... thus giving me an opportunity to better equip myself with knowledge.

My sincere gratitude shall also go to the other individuals which I have not named. Their

contributions have led me to a success in completing the research paper.

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Pusat Khidmat Maklumat Akademik UNI VERSlTI MALAYSIA SARAWAK

TABLE OF CONTENTS

Page

Approval Page 11

Abstract lV

Acknowledgements Vl

List of Tables Xl

Statement of Originality iii

Abstrak v

List of Figures xiii

Chapter 1 INTRODUCTION

1.1 Introduction

1.l.l Brand Equity 2

1.1.2 Institutional Image 3

1.1.3 Brand Equity, Institutional Image and Higher

Educational Institutions 3

1.2 Theoretical Framework 5

.' 1.2.1 Theory of Planned Behavior 6

1.2.2 Predicting Intentions: Attitudes, Subjective Norms and

Perceived Behavioral Control 6

1.3 Problem Statement 9

1.4 Research Objectives 10

1.4.1 General Objectives 10

1.4.2 Specific Objective(s) 11

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TABLE OF CONTENTS (CON'T)

1.5 Rationale of the Study

1.6 Research Scope

1.7 Limitations of the Research

1.8 Summary

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Chapter 2 LITERATURE REVIEW

2.1 Introduction

2.2 Brand Equity

2.2.1 Brand Equity and Education

2.3 Institutional Image

2.3.1 Institutional Image and Education

Chapter 3 RESEARCH METHODOLOGY

3.1 Introduction

3.2 Conceptual Framework

3.3 Population

'" 3.4 Sample

3.5 Research Design Overview

3.6 Main Research Instrument

3.7 Research Measurements

3.8 Data Collection Method

3.9 Data Analysis

3.10 Research Hypotheses

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TABLE OF CONTENTS (CON'T)

Chapter 4 FINDINGS

4.1 Introduction 32

4.2 Profile of Respondents 32

4.3 Reliability of Variables 33

4.4 Means of Variables by Categories 34

4.5 Findings of ANOV A 35

4.6 Findings ofT-Test 35

4.7 Summary of Findings 39

Chapter 5 DISCUSSIONS OF FINDINGS

5.1 Introduction 43

5.2 Difference between Both Institutions 43

5.3 Difference between Parents and Students for Each Institution 45

5.4 Difference between Parents and Students between Each Institution 46

5.5 Summary 48

.' Chapter 6 CONCLUSIONS

6.1 Introduction 49

6.2 Conclusion 49

6.3 Managerial Implication 50

6.4 Theoretical Implication 51

6.5 Future Studies 52

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TABLE OF CONTENTS (CON'T)

REFERENCES 54

APPENDIX I: Sample Questionnaire (UNlMAS - Parents) xiv

APPENDIX II: Sample Questionnaire (UNIMAS - Students) xviii

APPENDIX ill: Sample Questionnaire (KLT - Parents) xxii

APPENDIX IV: Sample Questionnaire (KLT - Students) xxvi

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LIST OF TABLES

Page

Table 4.1 Respondents Profile 33

Table 4.2 Reliability of Variables 33

Table 4.3 Means of Variables by Category for Each Institution 34

Table 4.4 Means of Variables by Category for Institutions, Students

and Parents 34

Table 4.5 ANOVA of Variables by Category of Respondents 35

Table 4.6 T -Test of Variables for Small Institution versus Large Institution 35

Table 4.7 T-Test of Variables for Small Institution Students versus

Small'Institution Parents 36

Table 4.8 T-Test of Variables for Large Institution Students versus

Large Institution Parents 36

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LIST OF TABLES (CON'T)

Page

Table 4.9 T-Test of Variables for Small Institution Students versus

Large Institution Students 37

Table 4.10 T-Test of Variables for Small Institution Parents versus

Large Institution Parents 38

Table 4.11 Summary of Results Obtained by Category of Respondents

(From T-Test Analysis) 39

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LIST OF FIGURES

Page

Figure 1.1 Theory of Planned Behavior 8

Figure 3.1 Conceptual Framework for Behavioral Intention 21

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CHAPTER 1

INTRODUCTION

Ll Introduction

Business environment has become more competitive today. Each business is continuously

trying to design marketing strategy in order to sustain in the competitive environment. In

order to be competitive, fIrms are increasing their efforts in the creation and development of

brands (Rio, Vazquez & Iglesias, 2001). Rising from this phenomenon is the importance of

branding. Branding has emerged as a top management priority in the last decade due to the

growing realization that brands are one of the most valuable intangible assets that fIrms have

(KeUer & Lehmann, 2006). Despite commonly being regarded as the look of a product or an

institution, a brand is more than looks but it is also a trustmark, a warrant, and a promise

(Sevier, n.d.). Brands serves several valuable functions such as being the ll:lrkers for the

offerings of a firm, helps to simply choice for customers, promise a particular quality level,

reduce risk and/or engender trust (Keller & Lehmann, 2006). With more fIrms realizing the

importance of brand, fIrms work to make their brand popular and known causing consumers

to be thrown with numerous brand names when it comes to picking a single item. Hence, by

focusing efforts on branding, a fIrm tries to get their product or institution included in the

choice set (Sevier, n.d.).

The service industry also considers brands and branding to be important. Turley and Moore

(1995) noted that the brand has been increasingly recognized as an important determinant of

consumer choice in the service sector. However, it is more difficult to evaluate a service

before experiencing it due to the unique characteristics of a service and different interpretation

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of an experience by individual consumers (Mourad, Enner & Kortam, 2010). Thus, the

importance of brand is to serve as a risk reliever, providing consumers with more confident

assurance and trust (Erdem & Swait, 1998).

1.1.1 Brand Equity

Previous researches made a variety of defmitions to the term brand equity. Brand equity is the

effect of the brand on the consumer response to the marketing activities associated with a

particular product (Keller, 1993). A customer sees brand equity as representation of attributes

such as better product performance, stronger risk reduction, lower information costs and a

positive image of the product (Mourad, Ennew & Kortam, 2010). To a firm, brand equity

represents attributes such as lower fmancial risk, incremental cash flow, higher rent, higher

entry barriers, lower marketing and distribution' costs for extensions and protection from

imitation via trade marketing (De Moji, 1993). For employees, brand equity reflects

uniqueness of company brand associations, brand consistency, brand creditability and brand

clarity (Supornpraditchai et al., 2007). Regardless of any definitions, brand equity in general

has to do with associations on attributes of a brand. Brand equity is significant in assisting

consumers to process information especially when the information is overloaded (Krishan &

Hartline, 200 I). In ord'er for an organization to have a st~ong brand, brand equity plays an

important role where marketers it are provided with an essential strategic bridge from the

organization's past to the future (Keller, 2003).

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1.1.2 Institutional Image

Institutional image, like brand equity, is an important element that helps to attract and retain

customers. As suggested by Kotler and Fox (1995), the image and reputation of an institution

is more essential than quality as potential customers made their choices based on perceived

image. Thus, image can be very influential when it comes to persuading customers to make

the choice. As defined by Bone (2009), an institutional image is the opinions and perceptions

that customers hold on the institution that can become factors that triggers customers to make

the institution as their choice. Barich and Kotler (1991), on the other hand, explained that

institutional image as the overall impression of an organization which exists in the mind of the

consumers. The overall impression is usually generated from the physical and behavioral

attributes of the organization. The institutional image of an organization will not be the same

to all public but differs to different categories' of consumers reflective of their specific

experience with the organization (Gray, 1986). Like brand equity, when properly managed,

institutional image wil) playa critical role in customer's buying intention (Barich & Kotler,

1991). Thus, it can be generally assumed that institutional image is influential in pushing the

brand into the choice set of a customer.

1.1.3 Brand Equity, Institutional Image and Higher Educational Institutions

Education, as part of the service industry, views brand as important. As stated by Jevons

(2006), university branding and reputation management has been of concern for some time in

the USA. Argenti (2000) points out that there are hundreds of ranking scales of business

schools and that these have more effect on admissions, placement, hiring and giving than any

other single variables. Branding is important for educational institutions as branding can add

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value to an education institution's offer and provide more satisfaction for the consumers

(Kotler & Fox, 1995).

In Malaysia, number of enrolment of tertiary students has been rapidly increasing due to the

national development (Ahmad, 1998). In response to that, tertiary education institutions in the

country also increased. As of 2009, there are around 600 private higher education institutions

and 20 public universities in Malaysia (Goi & Goi, 2009). With the huge amount of higher

educational institutions in Malaysia, branding becomes important in order to attract more

studepts to enroll to the institutions. Goi and Goi (2009) also pointed out that branding is

powerful in providing competitive advantage. Apart from that, for educational services, a

strong brand reflects a promise of future satisfaction (Berry, 2000). Rebranding which is

debated as one of the most significant brand management practice (Goi & Goi, 2009) has been

extensively practiced by the higher educational institutions in Malaysia in order to create

reputations in the local and international market (Goi & Goi, 2009). By creating and

increasing reputation of the brand, it is hoped that the institutions can be more competitive

and attract more enrolments .

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Pusat I(hjdm· t M 1,1 UNIVERSm HM 3",Umat Akademik

ALAYSfA SARAWAK

1.2 Theoretical Framework

Fishbein (1980) indicated that the theory of reasoned action stemmed from describing how a

consumer leads to a certain buying behavior. The theory of reasoned action states that

attitudes towards buying and subjective norms are the antecedents of performed behavior (Ha,

1998). As quoted by Southey (2011), the theory of reasoned action offers a model that

potentially benefits the prediction of intention to perform a behavior based on a person's

attitudinal and normative beliefs.

The theory of reasoned action takes into consideration the attitude of an individual as well as

the subjective norm of the individual in predicting the individual ' s purchase intention. When

considering the attitude of an individual, it is no just the general attitude of the individual of

the product but also the attitude towards performing that behavior (Lutz, 1991). For example,

even when a person has favorable attitude towards a product, it does not mean that the person

will buy the product. The theory of reasoned action also takes into consideration the

subjective nonn which refers to the social influences in an individual ' s behavior (Lutz, 1991).

This refers to the influence of other people surrounding the individual, the individual ' s

expectations and etc towards the purchase intention. However, due to limitations to the theory,

the theory of reasoned action was later extended by accommodating developments in the

variables and renamed as the theory of planned behavior.

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1.2.1 Theory of Planned Behavior

The limitation to the theory of reasoned action is that the theory did not consider the factor of

willingness of individual in their behavior. By putting this into consideration, the theory of

planned behavior was developed with the similar central factor as the theory of reasoned

action which is the individual's intention to perform a given behavior (Ajzen, 1991). As stated

by Ajzen (1991), intentions capture the influential motivational factors to a behavior. These

motivational factors will indicate the extent of willingness to try and the amount of efforts that

one planned to put in order to perform the action. Therefore, the assumption that can be

inferred is that the greater the intention to perform a behavior, the greater the chance the

behavior is performed. However, it should be clear that the behavior performed is under

volitional control where the individual can decide at will to perform the behavior (Ajzen,

1991 ). At times, individual can perform at will But some behaviors are being controlled by

some non-motivational factors such as available resources. When resources are available,

together with the intention to perform the behavior, the behavior is more than likely to be

perfomled (Ajzen, 1991). Under the theory of planned behavior, besides the two similar

antecedents of intentions i.e. attitude and subjective nonn, it also considered the third

antecedent which is the perceived behavioral control.

1.2.2 Predicting Intentions: Attitudes, Subjective Norms and Perceived Behavioral

Control

The theory of planned behavior proposed three factors leading to intention, namely attitudes

towards the behavior, subjective norm and perceived behavioral control (Ajzen, 1991).

Attitudes towards the behavior refer to whether or not an individual is in favor of the behavior

depending on the individual's evaluation towards the behavior. If an individual is .in favor of

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the behavior, the individual will likely to perform the behavior. The greater is the degree of

favoritism towards the behavior, the greater is the intention, thus the higher the tendency the

behavior is performed and vice versa.

However subjective norms also come to play when deciding on an intention. Subjective

norms, as illustrated by Ajzen (1991), refers to the perceived social pressure to perform the

behavior or otherwise. Taking subjective norms into consideration, thus it could be said that

the degree of an individual in favor of an action is also influenced by helher social pressure

towards the behavior. If the behavior is socially unaccepted or not favored, thus the tendency

of the behavior to be performed becomes lower. However, if the behavior is socially favored,

the behavior stands at a higher chance of being performed.

In addition to attitudes towards the behavior and subjective norms, the theory of planned

behavior also included perceived behavioral control as one of the determinants of intention.

Perceived behavioral control refers 'to the perceived ease or difficulty of performing the

behavior and it is assumed to reflect past experience as well as anticipated impediments and

obstacles' (Ajzen, 1991). As postulated by Ajzen (1991), perceived behavioral control with

behavioral intention c<1:n be used to predict behavioral achievement. From this suggestion, it is

believed that the possibility of a successful performed behavior is positively related with

perceived behavioral control when behavior intention is held constant (Ajzen, 1991). Apart

from that, perceived behavioral control is often used as a substitute to measure the actual

control (Ajzen, 1991). However, perceived behavioral control may not be an accurate

indicator of intention or predictor of behavior when the individual does not have much

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infonnation of the behavior or there are changes in the available resources of the individual or

when there are new elements to be considered for the specific situation (Ajzen, 1991).

Importance of attitudes, subjective norms and perceived behavioral control varies according to

different situations, different behaviors and different individuals (Ajzen, 1991). In some

situations, all three determinants may be important predictors while in some cases, only

attitudes and perceived behavioral control plays the role of predictors of behavior. At times,

only attitudes come into play in determining whether the behavior is to be performed or other

wise.

Attitude Toward Act or Behavior

Subjective Behavioral Behavior Nonn Intention

Perceived Behavioral Control

Figure 1.1 Theory of Planned Behavior

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1.3 Problem Statement

Based on the theory of planned behavior, it is inevitable that attitudes towards the behavior is

a determinant of behavioral intention. Past researches have been done to examine the

relationship or impact of brands towards consumer attitudes and purchase intention. Banyte,

Joksaite and Virvilaite (2007) concluded in their studies that 'attitude could be formed or

affected by intangible attributes ofa brand'. In the study of brands, brand equity is particularly

relevant to consumer choice (Mourad, Ennew & Kortam, 2010). Mourad, Ennew and Kortam

(2010) also noted that brand equity is used as a measurement both by the organization and

consumer to evaluate the value of brand. From the perspective of a consumer, brand equity

stems from desirable attributes of the brand towards the consumer and it stands as a

foundation to build emotional bond with the consumer (Teas & Grapentine, 1996). Generally,

it can be assumed that brand equity which is viewed as measurements to attributes of a brand

may influence the attitudes of a consumer towards the brand and ihus influencing intention

behavior.

As brand equity is related to attitude towards brand, image is also related to attitude towards

brand. Researches have been done on the effect of country image towards the attitude towards

a brand (e.g.: Pappu, Quester & Cooksey, 2007). Consumers possess different attitude towards

products from different country based on the image of the country. Corporate image or

institutional image is also being researched on their influence or relationship towards attitudes

of consumers (e.g.: Nguyen & LeBlanc, 2001; Alves & Raposo, 2010). Institutional image

which also includes institutional reputation considering that reputation is the outcome of the

process of building an image is 'an aggregation process which incorporates numerous

information used in the consumer's perception of the organization' (Nguyen & LeBlanc,

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2001). According to Nguyen and LeBlanc (2001), a consumer may already have certain

perceptions towards the institution even before having any personal experience or contact

with the institution as these perceptions may come from their evaluation towards information

gathered from the public, advertisement and etc. Nguyen and LeBlanc (2001) also noted that

consumers will rely on their perception of the institutional image which will form their

attitude towards the institution and determine their behavioral intention. This is especially

relevant to the service industry where consumers have to judge an institution and decide on

their intention before experiencing the service.

With related researches revealing the relationship of brand equity and institutional image on

the attitude of the consumers towards a product, institution or a brand, it is in the interest of

this study to investigate the brand equity and institutional image of higher educational

institutions with relevant to the consumers of higher educational institutions i.e. students and

parents.

1.4 Research Objectives

The main purpose of this study as well as its specific aims is discussed in further detail in the

following sections.

1.4.1 General Objective

The main purpose of this study is to investigate the perception of consumers towards the

brand equity and institutional image of higher education institutions. Comparison is done to

determine whether there is a difference between the brand equity and institutional image

between two institutions in the eyes of the consumers. This study also compares between

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