The Effects of Brand Equity on Customer Loyalty Towards Soft Drinks at Tuskys Supermarket, Eldoret

Abstract

The purpose of this study was to assess the effects of brand equity on sales performance of soft drinks companies, a case of Tuskys supermarket, Eldoret. The main objective was to assess the effects of brand equity on sales performance whose specific objective were: to assess the effect of brand equity on customer satisfaction, to investigate the effect of brand equity on customer retention and to analyze the relationship of brand equity on customer loyalty. The study will benefit companies producing soft drinks as it will provide a basis for decisions necessary to enable them to carry out product modification aimed at improving the market performance of their products. The research adopted the Keller and Lehmann (2003) model theory of Brand Value Chain which states that consumer mindset consists of multi-dimensional attributes including brand awareness and experiences. Customer mindset is likely to result in the market place performance such as increased customer loyalty and market share. There are three variables in the conceptual framework, the dependent, independent variables and the intervening variable. Brand equity is the independent since it is manipulated to see the effects that it will have on customer satisfaction, customer loyalty and customer retention which are the dependent variables. A descriptive research design was employed to determine the effect of brand equity on sales performance. A target population of 1000 was selected. A sample of 300 was then selected. The questionnaire was used as instruments of data collection. Data was analyzed through descriptive statistics. Data was presented through frequency tables and percentage. The major findings of the study were that Coca cola product is doing well because most customers are aware of its existence and this is as a result of advertising of its products that is done every day through the different media, making the customer prefer its brand as compared to the other. The signs of customers being loyal to a company’s product can be exhibited through presence of repeat purchase, increased in sales volume, increased in profits and improved market share. These signs are physical and therefore management can easily know which position it falls among the other brands in the market. The common effects of brand equity on sales performance is that when a product is tailored to suit the needs of customers and the customers become aware of this products through advertising, definitely it will lead to its good performance and beat the other products in the market. The challenges soft drink producing companies face include lack of management goodwill, competition from other soft drink producing companies and ineffective human resource policies. These challenges emanate from the top management and therefore can be addressed effectively if management provides finance to assist in advertising the company’s product.