Brand Equity on Purchase Intention Consumers’ Willingness to Pay Premium Price Juice

Abstract

Building the brand equity becomes an important source of differentiation. The company needed to improve competition, because the brand equity is very important to strengthen the company's reputation.However, there are only few studies on beverage value from the consumers' standpoint. And most of the researches had focused in the variables of marketing mix influencing consumers, such as price, communication, distribution or advertising. Congruence with this issue, the research have two objectives, the first objective is understanding consumer mind through brand equity in purchasing a product and willingness to pay premium price. The second is how the strategy should be done by a newcomer to the juice category. Based on sample of 330 consumers, Structural Equation Modeling is used to test hypotheses. The research shows that brand loyalty of juice is the most important dimension to build brand equity. In addition, a positive significant effect is found for brand awareness and association. Meanwhile, weak support is found for the perceived quality dimensions.Empirical support to the effect of juice's brand equity impacts on the consumers' purchase intention and willingness to pay premium price. This research brings relevant implication to the manager of juice production that should consider the relative importance of brand equity dimensions in their overall brand equity evaluationsin creating the consumers' purchase intention and willingness to pay premium price.