The effect of strategic factors and the role of relationship quality as mediator on brand equity of automotive industry

Building brand equity in today’s competitive markets is important for organizations. A number of strategic factors such as advertising, product innovation, product
quality, and country of origin have affected brand equity significantly. Equally important is the role of relationship quality in building brand equity. Although past researches have examined the effect of these strategic factors on brand equity, only limited research has investigated the role of relationship quality as a mediator between such strategic factors and brand equity. This research was planned to fill this gap by investigating the effect of the said mediating variable between strategic
factors and brand equity. This research focuses on brand equity, relationship quality and the strategic factors of the automotive industry in Malaysia. The data was collected through questionnaires which were distributed to passenger car users in Malaysia. The research employed systematic sampling technique and structural equation modeling (SEM) using the AMOS software to draw inferences and make
conclusions. The results indicated that product innovation and country of origin had significant positive effects on brand equity. However, product quality had a negative effect on brand equity. Moreover, the effect of advertising on brand equity was insignificant. It was also found that relationship quality had a significant positive effect on brand equity. The results also revealed that relationship quality mediated the relationship between strategic factors and brand equity. The results of this research have further strengthened the theory and related literature on brand equity
and put forward recommendations for car manufacturers about the best approaches to
build brand equity by using strategic factors as independent variables and relationship quality as mediating variable. Future research is recommended to integrate other strategic factors which may strengthen the theory besides enabling management to make better decisions.