The Impact of Brand Equity on Brand Loyalty: The Mediating Role of Customer Satisfaction

The study investigates the impact of brand equity on brand loyalty with the mediation of customer satisfaction in restaurant sector of Lahore, Pakistan. The study uses seven dimensions of brand equity, which include physical quality, staff behavior, ideal selfcongruence, brand identification, life style-congruence, trust and environment. Questionnaire has been used to collect the data from the customers using restaurants as a choice for their food demand. The data has been collected from 400 respondents and analyzed through SPSS and AMOS. All hypotheses have been supported except last hypothesis which has been partially supported. The effect of life style-congruence and environment has not been fully mediated by customer satisfaction and has proved insignificant, therefore these two variables have been dropped from modified model fit. It has found that the effect of physical quality, staff behavior, ideal self-congruence, brand identification and trust on brand loyalty has been fully mediated by customer satisfaction in case of Lahore. The study will enable the managers to change policies and to train the staff so they can satisfy the customers which in turn would make customers loyal with the organization. The study is limited only to the fast-food restaurants situated in the city of Lahore only. Future studies can be conducted across different type of businesses and cultures. This paper provides a basis to study the effect of trust on brand loyalty with mediation of customer satisfaction and offers practical help for managers to train employees which could enhance customer satisfaction and loyalty.