Quantifying the contribution of service excellence to brand equity

The South African fast food market is such a market, and in this article I quantify the importance of service and explore what this means for potential brand growth strategies.

The efficacy of the Ask Afrika Brand Equity Model

As I've developed and refined the model over the years I've found it mirrors market shares. This makes it useful in practice, not just theory. The market reported on in this article, the fast food market, is no exception to this rule.

Creating brand equity

The Ask Afrika Brand Equity Model measures seven key sources of brand equity - brand awareness, product, service, price, functional benefits, symbolic benefits and experiential benefits. What a customer or potential customer believes about a company in each of these key areas determines the success or failure of the brand. No amount of marketing budget thrown at the brand can compensate for failure in these areas.

The model provides key insights into how a brand performs in these areas - in other words its brand positioning. The model provides a high level of detail in each area, allowing action to be taken on specific issues. In addition the model indicates:

• The salience (dominance) of your brand in the customer mind
  
• The uniqueness of your brand's positioning
  
• The substitutability of competitor brands for your brand
  
• The extent to which different segments value the different sources of brand equity
  
• Simulations to determine the impact of changes in positioning on brand equity
  
• The ability of the brand to extend into new markets

What is the contribution of service excellence to brand equity?

In the fast food market the model clearly shows that service excellence contribution to brand equity is larger than any other source. On average, 28% of a typical fast food brand's equity can be traced to service excellence. Because service excellence is more important than the other sources of equity, a drop in perceived service quality levels would result in greater market share losses, than if another source of value were to fail. In a repertoire market, such as the restaurant market, the punishment would be swift. In other markets, such as banking, where barriers to switching between brands exist, it would take longer for the effects to be felt.

Figure 1: The contribution of service and other areas to brand equity in the SA Fast Food market

The practical implications for fast food brands: Two possible brand growth strategies

What can South African fast food chains do to improve their brand equity? Given the value service excellence has to consumers in this particular market, could a weaker brand distinguish itself by improving service quality further?

An analysis of the five leading brands in the market revealed that they were very poorly differentiated in terms of service quality (see figure 2). Service quality received the second lowest differentiation score, performing only slightly better than product as a source of brand value.

If one of the brands was able to improve service quality to a perceptible degree, it would stand to gain market share.

The fact that attributes, such as price, were already well differentiated means that less potential exists for improvement in these areas.

However, another very simple yet effective path can be followed - improved awareness. For instance, if brand A positions itself as a low price brand, lowering price even further (i.e. a differentiation strategy) is not necessarily the correct path to follow. If however it was discovered that only half the target market associated the brand with low price, then pursuing an advertising campaign to increase low price awareness, would increase the overall brand equity.

Figure 2: The extent to which fast food brands are differentiated in each area