Service Brand Equity in Developing Economies: The Case of Egyptian Banking Sector

Abstract

The brand equity concept is one of the most significant concepts for branding and marketing and its model and measurement have interested many academics and practitioners. Most of the research on brand equity has focused on physical goods, with a dearth of studies on the service sector in general and particularly in the banking sector. The dearth of research in this area appears paradox as branding could be argued to play a distinctive role particularly in the service sector. This is because strong brands increase consumers' trust of the imperceptible purchase and reduce their perceived monetary, social, or safety risk in buying services, which are difficult to evaluate prior to purchase and for which it sometimes takes a long time after purchase to confirm the brand promise. Consequently, many scholars have called for an investigation of brand equity in the service sector. In addition, most of the research on brand equity has focused on developed countries which would suggest a regional focus on developing countries. To sum up, despite the importance of brand equity in the service sector, there is lack of empirical evidence in the service sector in general and specifically in the banking sector, particularly for developing economies. Furthermore, there is lack of studies that examined and compared service brand equity across bank type (local public, local private and foreign banks) to provide a benchmark especially for foreign banks. Contributing to scholarly attempts to fill the gaps in the brand equity literature. this thesis examines consumer-based brand equity (CBBE) in the Egyptian banking sector in general and based on each bank type: public, private and foreign. In addition, the study aims to find out the similarities and differences on brand equity based on bank type. The regional context of the study is Egypt As the largest Arab country and the entry point for the Middle East and Africa Egypt appeared to be of high practical relevance and be a suitable regional research context. Unlike previous researches, a mixed method approach was employed to achieve the research aims. Qualitative data was used to triangulate the quantitative data and gaining a richer understanding of the quantitative findings. Four hundred and sixty-eight self-administered questionnaires were collected by offline and online modes, and 14 semi-structured face-to-face interviews provided details about how consumers perceived consumer-based brand equity in Egyptian banking. Data was analysed using SPSS19. Different types of statistical applications were used, such as descriptive analysis, factor analysis and multiple regressions. Content analysis using NVivo10 software was used to analyse the interview data. The main findings reveal that CBBE is applicable in the Egyptian banking sector. The results show that brand awareness, reliable staff, brand association and brand loyalty are the most effective variables on overall value of brand equity in the Egyptian banking sector, while within public banks, reliable staff, brand association and brand loyalty have the most influence on the overall value of brand equity. However, private and foreign banks share the same variables which affect the overall value of brand equity; these variables are brand awareness, brand loyalty and brand personality. The findings reveal that there is a significant difference between public banks and private and foreign banks; however, there is no significant difference between private and foreign banks. The qualitative findings support and add meaning to the quantitative results. The current research contributes to knowledge in the field of service brand equity research and extend our understanding in developing economics and adding to the debate on the area of brand equity.Furthermore, it contributes methodologically by using mixed methods and mixed modes (offline and online). In addition, the study overcomes the limitations of previous studies in three ways. Firstly, different types of brand association were incorporated and real consumers were approached rather than relying on students’ samples. Secondly, perceived quality was measured using the SERVPERF scale, providing a more comprehensive quality measure than many studies. Thirdly, the data were collected from Egypt, which as a developing country establishes an underresearched regional context. Therefore, as is the case in many developing countries, there were many challenges involved in the data collection process. Based on the results, the study provides a number of pratical contributions: It offers a manageable scale ‘‘tool kit'' for managers in the banking sector, regardless of type of bank, to create, maintain and improve their brand equity. It also provides guidelines that public, private and foreign banks could use to compare their performance with competitors. The study emphasizes the importance of building and developing brand awearness for private and foreign banks. As the service encounter is the “moment of truth” and is one of the most important determinants of brand equity, public banks should place more emphasis on their internal branding as well as on external consumers. Top management should invest in cultivating their brand values to their employees, particularly front-line employees, as they will deliver them to consumers through the service encounter. Another interesting finding with practical relevance was that although the majority of banks in Egypt has online banking services, most of the study respondents did not use them, therefore they might be well advised to collaborate with the Central Bank of Egypt (CBE) to organise a campaign to cultivate trust in the country’s online banking infrastructure and promote the advantages of using it. Online banking could be one of the solutions to overcrowding and long queues in public banks and improve the quality of the service provided which will lead to consumers’ satisfaction and increase the level of brand equity. Most consumers of public banks perceived their banks as the only secure banks guaranteed by the Egyptian government. Similarly to promoting the use of online banking, there is a need to develop a better public awareness of the role of the CBE in supervising all banks in Egypt regardless of their type. This will ensure fair and equal opportunities for all banks, which will foster real competition and hence is argued to affect the quality of the service provided. Despite the research achieved its planned objectives, as any social research, it has certain constraints and limitations. These limitations could offer opportunities for future research to address. Firstly, due the lack of detailed information about the study population, this research used a convenience sample of induvadul commercial bank consumers in the Greater Cairo. Future research could employ probability sampling if possible. Moreover, future studies could cover more cities in Egypt, not only the Greater Cairo area (even though the focus on this area has been discussed and justified in the thesis). Secondly, although the importance of CBBE has been analysed mainly from a consumer perspective it might be useful to examine service brand equity from the points of view of employees (managers and front-line) in banks in order to gain a better and comprehensive understanding from both perspectives. Thirdly, while this study examined and compared CBBE in diffrent bank types (public, private and foreign) in Egypt. It is suggested that a comparison could be made based on the top bank in each types, as this could give more specific recommendations for these banks. Fourthly, due to limitations of time and funds, future reseach could examine and compare CBBE in different services sectors and in different countries. Fifthly, this study focused on commercial banks in Egypt in general without distinguish between Islamic and conventional banks.Therefore, future research could carefully distinguish between Islamic and conventional banks and compare CBBE across them to gain a better understanding of the differences and similarities. Sixthly, it could be worth comparing the CBBE of foreign banks when they operate overseas (e.g., Barclays Bank and HSBC).