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Consumer-
Creating consumer-based brand based brand
equity for customers by brand equity

experience
Evidence from Iran banking industry 1443
Davood Feiz Received 12 March 2019
Revised 8 August 2019
Faculty of Economic, Management and Administrative Sciences, Semnan Accepted 17 August 2019
University, Semnan, Iran, and
Hadi Moradi
Semnan University, Semnan, Iran

Abstract
Purpose – The purpose of this paper is to investigate the effect of brand experience on brand equity
dimensions in the perspective of customers (including brand identification, physical quality, staff behavior
quality, brand awareness, ideal self-congruence and life style-congruence) on brand satisfaction and loyalty in
Iranian banking industry.
Design/methodology/approach – The author designed the conceptual model of the research based on
the existing relationships between the research variables and the proposed hypotheses. By a questionnaire,
the opinion of 288 customers and clients of selected branches of Melli and Tejarat banks were collected in two
Provinces, including East and West Azerbaijan Provinces. The research hypotheses were tested using
structural equation modeling.
Findings – The results of the paper showed that the brand experience directly affected all dimensions of
brand equity. Also, the results indicated that except for lifestyle congruence, other dimensions of equity
directly affected the customers’ brand satisfaction.
Originality/value – This paper is significant, because it addresses the experience relationships and brand
equity with the perspective of the customers of banks in an Islamic country, which affects the development of
branding literature.
Keywords Brand equity, Banking
Paper type Research paper

Introduction
Currently, based on the Central Bank of the Islamic Republic of Iran, over 35 banks
(including public, private and credit institute) are working in the banking industry. The
increase in the number of financial and banking institutions and the emergence of
applications to do banking and financial affairs made competition harder for banks, and
according to the Central Bank of the Islamic Republic of Iran, many banks and financial
institutions are suffering from loss because of the economic crisis (News agency of the
Islamic Consultative Assembly, Fars News Agency and Banker site). The above conditions
reveal that activists in this industry should seek sustainable competitive advantage. So
maintaining reputation, retaining the current customers, attracting competitors’ customers Journal of Islamic Marketing
and creating trust in potential customers are possible through experience, because it leads to Vol. 11 No. 6, 2020
pp. 1443-1464
customers’ satisfaction and trust. Of course, the story does not end here; in the USA, more © Emerald Publishing Limited
1759-0833
than 400 of Wells Fargo branches were closed by the end of 2018. According to the Guardian DOI 10.1108/JIMA-03-2019-0055
JIMA (2016), during the period 2011-2016, about 1,700 branches of five major British banks were
11,6 closed in the UK (Treanor, 2016). Hulten (2009) claimed that banks must pay special
attention to the brand experience to overcome problems. Using branding strategies and
brand communications, banks can overcome the competitive environment, because survival
and gaining profit in such environments require strong branding. This is because branding
is one of the most important communication tools in marketing communication, and
1444 companies and businesses have come to the conclusion that the real value is distinctive from
physical and tangible assets, and the true value is in the minds of potential buyers (Feiz,
et al., 2015b). Motameni et al. (2012) argued that commercial branding is an effective and
efficient method of creating a distinction in the market, which has become a strategy facing
marketing managers because of creating and managing marketing commercial branding.
Strengthening, upgrading and expanding brands are effective strategies for business
growth (Cifci et al., 2016) such that companies can efficiently use existing brands to reduce
the cost of introducing new products and increase their probability of acceptance on behalf
of potential customers and vendors and distribution channels. The brands help to
differentiate from competitor (Li, 2010; Molina et al., 2009), develop loyalty (Reisenwitz and
Gupta, 2011), reduce marketing costs, increase word-of-mouth (WOM), promote demand
higher prices, reduce switching cost (Hsieh and Li, 2008), increase barriers to market entry
and lead to long-term relationships with customers. Consumer-based brand equity (CBBE) is
crucial for creating customer equity, distinguishing brands, evaluating brand performance
and gaining competitive advantage (Zhang et al., 2010; Sun et al., 2014). According to Keller
(1993), the strong brand equity is obtained when customers identify brands, and there is
desirable brand identification and loyalty. Intensification of competition, increasing
customer demand and expectations are examples of the challenges facing service
organizations to survive in the current growing competition where creating and maintaining
equity can be used in this regard as a strategy (Feiz et al., 2016).
Bairrada et al. (2018) believed that companies are continually seeking strategies to create
strong emotional nodes with their customers. Previous research (Ekinci and Hosany, 2006;
Hwang and Wen, 2009; Brakus et al., 2009; Osman et al., 2009; Li et al., 2009; Baek et al., 2010;
Ramanathan and Ramanathan, 2011; Prentice, 2013) indicated that brand experience is a
vital factor in marketing and brand communication management. Jung and Soo (2012) and
Chang and Chieng (2006) stated that brand experience is fundamental in creating a
relationship between customers and brands. Brand experience is the latest source of
sustainable distinction and a new competitive field. The result of a lasting mutual
experience is an increase in customer satisfaction and tendency to purchase-related
behaviors (Hwang and Han, 2016a). Because of the existence of lots of available options in
the market, the McKinsey (2016) report highlights the importance of customer experience in
the business. A recent study found that of 1,000 marketing managers surveyed, almost 59
per cent believed that brand experience is a method of creating continuous relationships
with customers. More than one third of them believed that they will reserve between 21 and
50 per cent of their marketing budget to brand experience in the next five years (Andreini
et al., 2018). Deloitte (2017) indicated that if customers have a positive experience of service,
then they will repeatedly refer to it by 60 per cent (Kim et al., 2018). According to Iglesias
et al. (2018), brands should create pleasant experience for customers to distinguish
themselves and enjoy a strong competitive position. In the perspective of Markovic et al.
(2018), this challenge is critical for brands, especially in the service sector, due to the nature
of service distinction (such as intangibility, inseparability from the service provider and
being non-storable) is far more important, because there are many contact points for contact
and experience between the brand and the customers. According to Gilmore and Pine (2002),
the need for sustainable experience for customers in the service industry emerged when Consumer-
companies failed to differentiate their offerings by high-quality services from competitors. based brand
Researchers (Brakus et al., 2009; Iglesias et al., 2011; Lin, 2015) believed that brand
experience was effective and vital in improving customer–brand relationships and
equity
reinforcing perceptual value.
However, literature and research survey revealed that little research was conducted,
especially on brand experience in the banking industry. For instance, Loureiro and
Sarmento (2018) in Portugal investigated the effect of experience on brand equity through 1445
sentimental variables. Also, the research of Altaf et al. (2017) in Malaysia and Pakistan
investigated the effect of brand experience on brand equity dimensions according to Aaker
(1991) model. According to Nam et al. (2011), Aaker’s (1991) model solely focuses on the
functional aspects of the brand and disregards the symbolic use of brands. In this regard,
Nam et al. (2011) introduced three brand-related symbols for service sector (including
quality of employee behavior and physical quality, brand identification, self-congruence and
lifestyle congruence), which was investigated by Cifci et al. (2016), who added new
dimensions to it. According to Nam et al.’s (2011) and Cifci et al.’s (2016) models, we can
mention the weakness of the research conducted by Altaf et al. (2017) that their model
neglects the symbolic dimensions of the brand that is currently important for customers.
Based on the complementary model of Cifci et al. (2016), the present research explores brand
experience effect on the formation of CBBE in the banking services industry of Iran.
Investigating the above studies indicated that studies used Brakus et al.’s (2009) four-
dimensional model to measure the brand experience, while this study will use Nysveen
et al.’s (2013) five-dimensional model that they introduced for services industry brand
experience. A review of previous research indicates that they have used the model of Aaker
(1991), while many studies have used this model for brands active in the product sector. Cifci
et al. (2016) indicated that research using Aaker’s (1991) model in the service sector is limited
and that research shows that this model has poor validity for service organizations (Boo
et al., 2009). Nam et al. (2011) and Cifci et al. (2016) argued that Aaker’s (1991) model was not
appropriate for service sector because it neglected services inherent characteristics
(inseparability, heterogeneity, perishability and intangibility). Hence, there is uncertainty as
to whether the findings of Nam et al. (2011) and Cifci et al. (2016) are valid when the CBBE
model is applied to other service sectors and national cultures. The main duty of the
marketing manager is to identify the similarities and differences and to utilize them in the
marketing planning process to align the strategies, products and marketing programs with
the significant cultural differences. Therefore, this study’s aim is investigating the
relationship and the effect of the brand experience with the brand equity dimensions from
Iran banking customers’ viewpoint to provide managers with a path toward maintaining
and increasing the level of customer satisfaction and loyalty in Islamic banking.

Features of Iran banking

In the 1970s, Islamic banks started their operation. In 1975, Development Islamic Bank (DIB)
and Islamic Development Bank (IDB) were established (Lone and Bhat, 2018). Islamic
banking is categorized as systemically important in 12 jurisdictions where the market
shares have reached 15 per cent. Collectively, these 12 jurisdictions account for 92 per cent of
the global Islamic banking assets. The largest are Iran (34.4 per cent of global Islamic
banking assets), Saudi Arabia (20.4 per cent), United Arab Emirates (UAE) (9.3 per cent),
Malaysia (9.1 per cent), Kuwait (6.0 per cent) and Qatar (6.0 per cent) (Islamic financial
services industry stability report, 2018). The Islamic money-related framework is network
arranged, and one of the fundamental objectives of Islamic budgetary establishments is to
JIMA accomplish financial equity (Lone and Alshehri, 2015). Iranian banks use “provisional”
11,6 interest-based transactions but retain the accounting standards of conventional banking
(Reuters, 2018). In 2009, Iranian banks accounted for about 40 per cent of total assets of the
world’s top 100 Islamic banks. Three of the leading four Islamic banks are based there;
Bank Melli Iran, with assets of $45.5bn came first, followed by Saudi Arabia’s Al-Rajhi
Bank and Bank Mellat with $39.7bn (Wikipedia.org). Iran’s banking system was
1446 transformed to be run on an Islamic interest-free basis and operating fully Shariah-
compliant banking system. All of Iranian banks should follow Islamic banking principles;
that is where usury (or Riba) is prohibited (Hadian, 2018). Iran financial institutions include:
1) government and non-government banks; 2) money dealers; 3) the credit organization; and
4) cooperative funds and credit firms (Shahchera, 2013). As Lone and Bhat (2018) stated that
Islamic banks can endure and contend well even without utilizing the “Islamic” tag on the
off chance that they actualize the prime standards of Islamic banking and work on
improving the components featured, Islamic banking does not use in this study.

Literature review
Brand loyalty
Guaranteeing the business survival is subject to the creation of a recurring business through
customer loyalty. Brand loyalty refers to the desire of customers to re-purchasing services or
products of a brand (Choi et al., 2017). Narteh (2018) showed brand loyalty have an effect on
firm’s performance. Customers’ brand loyalty is the ultimate goal of all businesses, through
which all companies and customers can benefit. As seen, only 5 per cent increase in
customer returns will increase profits by 25-85 per cent (Nikhashemi and Valaei, 2018).
Eakuru and Mat (2008) considered customer loyalty as an index of business success and
survival. Dick and Basu (1994) introduced customer loyalty as “the power of the relationship
between related attitudes of individuals and repetitive support.” According to Motameni
et al. (2012), brand loyalty is a hallmark of brand equity, and the research results of Yoo et al.
(2000), Atilgan et al. (2005); Yasin et al. (2007), Tong and Hawley (2009); and Lin and Chang
(2003) suggest that loyalty is an important factor in the formation of brand equity. Cai and
Hobson (2004) proposed an integrated approach to brand loyalty by taking into account
brand experience.

Brand satisfaction
The key to survival and long-term profitability is in satisfying customers (Pappu and
Quester, 2006) and making the satisfied customer to loyal customer, because the satisfied
customer will return to the place where he was satisfied and will repeat his purchase
and dissatisfied customer will obviously turn to competitors (Feiz et al., 2015b). Satisfied
customers are less sensitive to price and less affected by behavior advertising (Dimitriades,
2006). According to Del Bosque and San Martin (2008), satisfaction is not merely cognitive
but also sensational. Voeloutsou et al. (2005) stated that satisfaction is the total satisfaction
of specific interactions with the service provider. The specific interactive satisfaction varies
from experience to the other experiences with altering the mean satisfaction, that is,
satisfaction is a better predictor of loyalty and business performance (Johnson et al., 2006).
Nam et al. (2011) show that customer satisfaction is a mediator variable between loyalty and
brand equity. Satisfaction is an effective response and is the result of the customer’s
experience and evaluation of brand performance (expectations and actual perceptual result).
Previous research (McDougall and Levesque, 1994; Back and Parks, 2003; Faullant et al.,
2008; Nam et al., 2011) indicated the relationship and the effect of satisfaction on loyalty.
 H1. Brand satisfaction has a direct and positive effect on brand loyalty. Consumer-
based brand
Consumer-based brand equity equity
Branding and brand management has existed since a long time, though brand equity is still
a key concept for many organizations established in the past 20 years. The emergence of
brand equity increases the importance of marketing strategies and provides a focal point for
researchers and marketers (Moradi and Zarei, 2012). There is a significant consensus among 1447
brand equity definitions that equity is the value of product enhancement with respect to the
brand (Feiz et al., 2015a). The concept of brand equity covers a wide level because the
experience, feelings and what the customer learns about a brand in the long term pertains to
the concept of equity (Moradi and Zarei, 2012).
Researchers (Myers, 2003; Keller, 2003) argue that brand equity is directly related to the
organization’s success, because the formation of brand equity provided high profit and
quite low cost for companies. Equity can increase cash flow, distinguish products to achieve
sustainable competitive advantage, create opportunities for brand extensions, gain more
support from shareholders, protect companies, have high profit margin, have high effective
marketing communications and have the ability to better attract the staff (Motameni et al.,
2012). Thus, according to Thanh (2012), it can be considered as one of the most valuable
intangible assets of businesses. Brand equity can be investigated from two different aspects,
that is, the financial perspective and the perspective of customers. Clare et al. (2011)
investigated the importance of investigating the customers’ perspective.
The brand equity models introduced by Aaker (1991) and Keller (1993) were extensively
investigated and validated (Buil et al., 2013). Based on the four-dimensional models (Aaker,
1991), Yoo et al. (2000) presented a scale for measuring brand equity in the customer’s
perspective, which was rapidly and widely used in the products used by the researchers, but
this scale was less used in the service sector and the results of using these measures
indicated their weakness (Cifci et al., 2016). In this regard, Nam et al. (2011) claimed that
because of the inherent characteristics of the service (intangibility, inseparability,
heterogeneity and being non-storable), the scales in the service sector were not very efficient;
therefore, they introduced new dimensions (e.g. the quality of service and employee
behavior, brand identification) for the CBBE in the service sector. In this regard, Cifci et al.
(2016) investigated the Aaker (1991) and Nam et al. (2011) models and, based on their
integration, presented a new model which was used by the present study and, unlike model
Aaker (1991), does not solely focus on the functional aspects but includes symbolic aspects
as well. It should be said that according to the definition of Brady et al. (2008), brand loyalty
is distinct from CBBE. Because equity is a widespread concept that encompasses the image
and familiarity with the brand, while loyalty is a behavioral structure related to the
repurchase tendencies and behavioral tendencies are the result of the CBBE, not its
components and dimensions (Nam et al., 2011). The research conducted by Kim et al. (2001)
and Johnson et al. (2006) also suggested that ideal self-congruence, brand identification and
lifestyle congruence are the symbolic consumption of the brand in the service industry.
The above figure presents models and dimensions of CBBE in the perspective of
customers in the service sector, which will be addressed in the following.

Brand awareness
According to Keller (2003), creating a strong and ideal brand in the consumers’ minds
enhances brand equity, which means that a positive brand image increases the chances of a
brand choice and its protection against the threats of competitors. Brand awareness is a
JIMA remarkably effective factor on customers’ decision-making (Lin and Chang, 2003; Jiang,
11,6 2004). Brand awareness is defined as the degree of customers’ familiarity with brand (Lin
and Chang, 2003), which is common in models of Aaker (1991), Keller (1993) and Cifci et al.
(2016) and refers to the probability and convenience of brand recall on behalf of the
customers in a particular product or service category. Brand awareness is the first step in
creating equity; as stated by Johnson et al. (2006), a brand without awareness resembles a
1448 label on a product or service lacking meaning and sound. Desai et al. (2008) indicated that
awareness in the customer selection process plays a crucial role. The result of research
conducted by Rios and Riquelme (2008) indicated that awareness through loyalty affects the
formation of brand equity. Bashir’s (2014) survey in Brunei and Badara et al.’s (2013) survey
in Nigerian Islamic banking showed that brand awareness has direct effect on customer
satisfaction.

H2a. Brand awareness has a direct and positive effect on brand satisfaction.

Brand identification
Based on the theory of organizational identity, people join groups for supporting their
identity and sense of belonging. Brand identification refers to the situation where customers
express their social identity through brand purchase or brand association (Cifci et al., 2016).
According to Del Rio et al. (2001), customers also define their social identities by purchasing
or communicating with brands, and on this basis, Long and Shiffman (2000) believe that
customers are loyal to brands with a better reputation among other groups to which
the customers are a member or are going to be a member. Purchasing and using a brand
helps customers distinguish their social identities from other social identities (Kim et al.,
2001). Considering that brand identification aids customers to integrate or not integrate with
social groups, customers have more positive attitudes and approaches to brands that are
more effective in expressing their identities and their uniqueness (Pahu et al., 2015). The
research results of Nam et al. (2011) and Cifci et al. (2016) in the tourism and hospitality
industry suggest the effect of brand identification on satisfaction.

H2b. Brand identification has a direct and positive effect on brand satisfaction.

Service quality
When the brand image is forming in the minds of customers, quality is highlighted because
the customer’s assessment of the brand is based on his perspective toward the quality
received from the product or service. When the customer has a positive and strong brand
image, he likes to generalize it to other brand products and services. Boo et al. (2009) stated
that quality is one of the prerequisites for satisfaction and affects the perceptual value of
customers. Chao (2008) said that the quality of service is a multidimensional concept such
that discussions over its dimensions still continues. As an instance, the American School of
Thought has accepted the SERVQUAL model as the quality of service dimensions including
five dimensions, while the North Europe School of Thought accepts the technical and
functional qualities as dimensions of service quality. The research results of Ekinci (2001),
Brady and Cronin (2001) and Madanoglu (2004) indicated that the North Europe model has
more acceptance and operational capability in service industries. From the perspective of its
impact on customers, service quality is aimed at satisfying the customers by delivering
proper products to them that align their requirements [24]. Besides, a service of good quality
can retain customers that may in turn enhance the financial performance of a business
(Lone and Rehman, 2017). In the service industry, the physical quality and employee Consumer-
behavior are considered the dimensions of the quality of service, where the physical quality based brand
refers to the image created by design, equipment and tools in the service delivery location, equity
and the customer’s behavior refers to the image created by responsible, friendly and
intimate behavior, helpfulness and the diligence of the service provider staff (Nam et al.,
2011). The research results of Ekinci et al. (2008) and Nam et al. (2011) suggested that there is
a significant relationship between the quality of service (physical quality and employee 1449
behavior) and customer satisfaction in hospitality industries. Lone and Bhat’s (2018) and
Lone et al.’s (2018) research on Saudi Arabia banking industry shows that physical aspects
of banks, dealing and attendance by bank staff drive customers satisfaction toward Islamic
banking.

H2c. Physical quality has a direct and positive effect on brand satisfaction.
H2d. The quality of staff behavior has a direct and positive effect on brand satisfaction.

Ideal self-congruence
Research indicated that products/services and brands are not only for utility purposes but
also for symbolic values and meanings (Bumann et al., 2015), that is, customers are
interested in using brands that show them in their state or develop their ideal congruence,
and these brands create more value and, thus, are more ideal to customers (Elliott and
Wattanasuwan, 1998).
Ekinci et al. (2008) indicated that customer satisfaction in the relationship between
quality of service, self-congruence and tendency to repurchase is a mediator. Their research
indicated that service quality and self-congruence are antecedent to customer satisfaction.
Research by Chon (1992), Bigne et al. (2001), Ekinci et al. (2008) and Nam et al. (2011) in the
tourism industry show that between ideal self-congruence and customer satisfaction, there
is a significant relationship.

H2e. Ideal self-congruence has direct and positive effect on brand satisfaction.

Lifestyle congruence
As Brassington and Pettitt (2003) stated, lifestyle is limited not merely limited to
demographic characteristics but also to the attitude to life, aspirations and beliefs.
Unfortunately, there is no definition universally accepted, but it can be considered as unique
lifestyles of people could be identified by activities, interests and opinions and all the things
that distinguish one from another. Nam et al. (2011) mentioned that when customers are
satisfied with a brand that meets their unique lifestyle and reflects customers’ lifestyle, they
develop their repetitive purchasing patterns and form their personal attachment. As they
use the concept of self and social groups as comparative standards, it can be said that
lifestyle congruence is different from self-congruence and brand identification. According to
Solomon (2002), lifestyle includes common values and consumption patterns, and brands
express lifestyle. In his perspective, the goal of the marketers is to create customer
satisfaction with the brands that adapt to their specific lifestyle.

H2f. Lifestyle congruence has direct and positive effect on brand satisfaction.
JIMA Brand experience
11,6 The present study uses the definition provided by Brakus et al. (2009) that defines brand
experience as “a set of emotions, effects, cognitions and behavioral responses from
stimulants related to brand identification elements.” Brand experience was distinct from
other brand-related concepts, namely, personality, conflict and attitude, which were
indicated in the research conducted by Brakus et al. (2009). Through marketing, advertising,
1450 customer service and personal interactions activity, the image of the brand is shaped and the
brand experience is the result of customers’ emotions from the image of the brand (e.g. the
 ahin et al., 2017). Andreini et al. (2018) found that the three main
logo, name, website, etc.) (S
theories pertaining to brand experience are, namely, 1) value theory, 2) the theory of
consumption culture and 3) the logic dominate services.
Previous research (Black and Veloutsou, 2017; Ramaswamy and Ozcan, 2016; Carù and
Cova, 2015; Buil et al., 2013) indicated that customers are assisted and involved through the
experience in developing and expanding the creation of brand meaning. Experience allow
customers to express personality (Swaminathan et al., 2007), emotion (Thomson et al., 2005)
and, ultimately, create self- social Escalas and Bettman (2005). Through experience,
companies expand sustainable loyalty, which in turn leads to a competitive advantage for
the companies (Bapat, 2017). Good brand experience can enhance brand effectiveness more
than traditional advertising concepts such as association, personality, brand equity, attitude
and brand value (Roswinanto and Strutton, 2014). Using central values, experience and
perceptions are made which make the experience unique, real and distinct from what rivals
offer and difficult to imitate (Alloza, 2008).
The brand experience is internal, subjective and is related to the real use of service/
product and brand (Bumann et al., 2015) and encompasses all types of customer experiences,
namely, emotional, symbolic, content and non-utilitarian experiences (Hulten, 2009;
Zarantonello and Schmitt, 2010). The concept of the experience was first introduced by
Holbrook and Hirschman (1982) into the marketing literature in 1982. They raised
experience from consumer perceptions. Brand experience first appeared in Gilmour and
Payne’s (1999) research and later in Schmidt (1999) (Huang, 2017). The results indicated that
customers persistent on hedonic consumption and pleasure (Bapat and Thanigan, 2016;
Holt, 1995) separated the experience of consumption into emotional and cognitive
experience. Then, Aaker (1997) indicated the relationship of brand experience with
behavioral, cognitive and real-world responses. As Carù and Cova (2003) stated, consumers
are affected by experience in emotional, mental, spiritual, social and physical terms.
Customer experience falls into two categories: objective (including behavioral and cognitive)
and subjective (including emotional and social experience) (Mascarenhas et al., 2006).
Brauks et al. (2009) measured the brand experience using emotional, intellectual, sensory
and behavioral dimensions. Emotional dimension involves emotions and intentions; the
intellectual dimension refers to the brand’s ability to make customers think, the sensory
dimension also refers to the strong and intuitive sense of consumers, and finally, behavioral
dimension pertains to interaction with brand and lifestyle (Zarantonello and Schmitt, 2010;
Jung and Soo, 2012).
Brand experience takes place during various related events, such as searching,
purchasing and using products or services (Brakus et al., 2009; Arnould et al., 2002;
Holbrook, 2000). Of course, Beig and Khan (2018) claimed that experience forms through
marketing communications and in exposure to advertisement. When customers face specific
stimuli, such as brand design, elements and colors related to brand personality, these stimuli
become part of the package, communication, brand identification and brand location. They
consider these stimuli which are the source of intrinsic and objective responses of customers
as brand experience. Brand experience provides vital information for customers to make a Consumer-
decision considering a brand, and previous experiences also affect future brand-related based brand
behaviors (Becerra and Badrinarayanan, 2013). It is confirmed that in marketing, the equity
intellectual, emotional, sensory and behavioral experiences can help to identify a brand
(Hwang and Hyun, 2012). The result of the research conducted by Chen (2012), Shamim and
Muhammad (2013), Lin (2015), Nejad et al. (2015) and Iglesias et al. (2018) indicated that
experience affects the formation of brand equity. 1451
The research results of Feiz et al. (2015b) and Naggar and Bendary (2017) indicated that
brand experience directly affects customer loyalty and there is a significant relationship
between brand experience and brand awareness. According to Nam et al. (2011), the closer
the brand image to a person’s first lifestyle, the more will he be satisfied with the experience
of a product or service. Cliff et al. (2014) indicated that brand experience affects customer
awareness. The result of the previous research conducted by Brakus et al. (2009), Morgan-
Thomas and Veloutsou (2013), S ahin et al. (2013), Khan and Rahman (2015a, 2015b) and Kim
et al. (2015) suggested the effect of brand experience on brand satisfaction.

H3. Brand experience directly affects CBBE dimensions in the customer’s perspective
(brand awareness, physical quality, quality of staff behavior, ideal self-congruence,
brand identification and lifestyle congruence).
Based on the theoretical and empirical findings, the present study raised three main and six
secondary hypotheses, and based on the relationship of these hypotheses, the structural
model of the research is presented as shown in Figure 1.

Research methodology
Sampling and data collection
In September 2018, using a questionnaire, the present study investigated the perspectives of
the people. With regard to the purpose of the research, the statistical population of this
research comprised all users of customer service and clients of branches of Melli and Tejarat
banks in the East and West Azerbaijan provinces. Data were collected from real customers
of banks in Iran. In this research, convenience sampling method was used for data collection.
First, from among all existing branches, ten branches were selected from each bank in each
province, and by visiting the branches of selected banks, a questionnaire was distributed
among the customers and clients in the branches and the necessary explanations were
provided to the respondents. To this aim, 400 questionnaires (each branch ten
questionnaires) were distributed among sample members, and 288 useful questionnaires
were collected and returned (return rate 72 per cent). Table I presented demographic
characteristics of the statistical sample of the research.

Development of instruments and scales (measures)

The design and draft of the questionnaire was designed based on the previous research
literature and the necessary changes were made based on the research purpose. The
research questionnaire was divided into two sections; the first section included the
respondents’ demographic information and the second section, with 41 questions, included
measurement scales of the research variables (brand experience, brand awareness, brand
identification, service quality (physical and employee behavior), ideal self-congruence,
lifestyle congruence, satisfaction and loyalty); the questions in the second section were
measured using the five-point Likert scale (from 1 strongly disagree to 5 strongly agree).
JIMA Brand CBBE Brand
H3 H2 H1 Brand Loyalty
11,6 Experience dimensions Satisfaction

Brand
1452 Awareness

H3-1 H2-1
Brand
Identification

H3-2 H2-2

SQ1.
H3-3 Physical H2-3
Brand
Brand
Satisfaction
Experience
H3-4 H2-4
SQ2. Staff
behavior H1

H3-5 H2-5
Brand
Ideal Self- Loyalty
Congruence
H3-6 H2-6

Figure 1.
Research conceptual Lifestyle-
model Congruence

Frequency (%)

Gender
Female 91 31.6
Male 197 69.4
Age
> 20 year 26 9.0
20-35 84 29.1
35-50 81 28.1
< 50 year 97 33.7
Education
> Diploma 55 19.1
Associate degree 29 10.1
Bachelor 141 48.9
Master and PhD 63 21.9
Table I. How long have co-operation with banks branch
Demographic > 2 year 89 30.9
characteristics of 2-5 year 93 32.3
sample < 6 year 106 36.8
The measurement scales of the brand experience included 15 scales, derived from Nysveen Consumer-
et al. (2013) and Das et al. (2018), including five dimensions, namely, sense, feeling, behavior, based brand
thought and communication. Brand awareness was adapted from the research conducted by
Moradi and Zarei (2012) with three scales. Brand identification was adapted from the
equity
research conducted by Nam et al. (2011) with three scales. The quality of brand services was
adapted with four scales for physical quality and three scales for employee behavior from
the works of Ekinci (2001) and Madaniglu (2004). Ideal self-congruence was adapted with
three scales from the research of Back and Parks (2003) and Nam et al. (2011). Lifestyle 1453
congruence was adapted with three scales from the research of Johnson et al. (2006) and Nam
et al. (2011). Satisfaction was adopted with three scales from the research of Nam et al. (2011).
Finally, customer loyalty was adapted with three scales from the research of Nam et al.
(2011) and Cifci et al. (2016).

Data analysis
Validity and reliability of the scales
To refine and validate the scales, the author used confirmatory factor analysis, the results of
which were presented in the table below. Convergent validity measures the level of the joint
variance that exists between the scales and the latent structures (Bouli et al., 2018).
According to Hier et al. (2010), for establishing convergent validity, factor coefficients of
variables should be significant and higher than 0.5.
Indexes Chi-square (X2) = 1,295.65, df = 713 X2/d.f. = 1.81, RMSEA = 0.046, CFI = 0.98,
GFI = 0.96, NFI = 0.96 for measuring the model fitness uses; by considering the results
obtained, the model fit was satisfactory and all factor loads were significant. This means
that the scales are one-dimensional. Quantities of composite reliability (CR) indicate being
over the acceptable level of 0.6 (Fornell and Larker, 1981). According to Andersson and
Gerbing (1988) to test the convergent validity, the average variance extracted (AVE) for all
constructs was calculated for which the obtained values were more than 0.5, that were
acceptable. In addition, the Cronbach’s alpha calculated for each of the structures was more
than 0.7, indicating the proper reliability of the comparison (Table II).
Table III presented the correlation coefficients, AVE and CR of all model constructs.
According to Fornell and Larker (1981), if the AVE values were higher than the square of
correlation coefficients, then the divergent validity would be confirmed, and the results
confirm this issue.

Structural model and testing the hypotheses

Using SPSS and LISREL software, statistical analysis of data was performed. According to
Anderson and Gerbing (1988), considering that structural equation modeling is the proper
analysis method for relations between variables in multivariate structures; thus, the
hypotheses and the research model were tested using the structural equation modeling
(SEM) and Table IV presents the results along with model fit indices.
The results indicated that all hypotheses were approved except for one hypothesis. The
results indicated that satisfaction directly affect loyalty ( b = 0.63, p < 0.001); thus, H1 were
supported. In the following, the results indicated that the brand awareness, brand
identification, service quality dimensions and ideal self-congruence affect satisfaction and
the results indicated that H2a, H2b, H2c, H2d and H2e were confirmed (brand awareness/
b = 0.45, p < 0.001; brand identification/ b = 0.44, p < 0.001; SQ1: Physical/ b = 0.33, p <
0.01; SQ2: staff behavior/ b = 0.89, p < 0.001; and ideal self-congruence/ b = 0.26, p < 0.05).
Also, the effect of lifestyle congruence on satisfaction was not confirmed (lifestyle
congruence/ b = 0.09, p < 0.001); then, H2f rejected. Eventually, the results indicated that all
JIMA
Factor
11,6 Constructs Items loading Cronbachs’ a AVE CR

Brand experience X makes a strong impression on my 0.74 0.748 0.5 0.74

senses
Being a customer of X gives me 0.66
interesting sensory experience
1454 X appeals to my senses 0.71
I have strong emotions for X 0.69 0.713 0.51 0.75
X often engage me emotionally 0.7
X induces my feelings 0.75
I often engage in action and behavior 0.66 0.701 0.5 0.74
when I use X services
As a customer of X I’m rarely passive 0.75
X engage me physically 0.69
I engage in a lot of thinking as customer 0.78 0.783 0.56 0.79
of X
Being a customer of X stimulates y 0.73
thinking and problem solving
X often challenge my way of thinking 0.74
As customer of X I feel like I am part of a 0.78 0.732 0.5 0.75
community
I feel like I am part of the X family 0.73
When I use X I don’t feel left alone 0.74
Brand awareness I am familiar with X brand 0.76 0.744 0.5 0.74
I can quickly recall the logo or symbol of 0.68
X
I can recognize this brand among other 0.67
banking services brands
Brand identification If I talk about this brand, I usually say we 0.74 0.808 0.58 0.8
rather than they
If a story in media criticizes this brand, I 0.74
would feel embarrassed
When someone criticizes this brand, it 0.81
feels like a personal insult
Service quality The outside of the bank was visually 0.79 0.824 0.59 0.85
attractive
This brand has modern looking 0.76 0.707 0.5 0.74
equipment
The service layout of this brand is tidy 0.8
This brand has a visually appealing 0.72
service atmosphere
Bank employees listened to me 0.75
Bank employees were helpful 0.71
Bank employees were competent in their 0.69
job
Ideal self-congruence The image of this brand is consistent with 0.72 0.738 0.52 0.76
how I like to see myself
The image of this brand is consistent with 0.68
Table II. how I would like others to see me
Confirmatory factor If typical guest of this brand has an image 0.68
similar to how I like to see myself
analysis for
measurement items (continued)
 Consumer-
Factor based brand
Constructs Items loading Cronbachs’ a AVE CR equity
Lifestyle congruence This brand reflects my personal lifestyle 0.71 0.703 0.51 0.76
This brand is totally in line with my 0.79
lifestyle
This brand supports my lifestyle 0.65 1455
Satisfaction Worse than I expected 0.63 0.758 0.51 0.87
Worse than similar banks I use its 0.75
services
Terrible 0.76
Loyalty I will recommend this brand to someone 0.94 0.819 0.77 0.91.75
who seeks my advice
Next time I will use this brand services 0.83
If I experience a problem with this brand, 0.87
I will switch to other brands Table II.

Constructs 1 2 3 4 5 6 7 8 9
a b b b b b b b
1.Brand experience 0.51 0.40 0.39 0.33 0.26 0.30 0.15 0.40 0.19b
2. Brand awareness 0.637 0.50a 0.35b 0.30b 0.33b 0.42b 0.14b 0.39b 0.38b
3. Brand identification 0.630 0.594 0.58a 0.30b 0.24b 0.40b 0.12b 0.29b 0.16b
4. SQ1 Physical 0.583 0.552 0.553 0.59a 0.29b 0.33b 0.05b 0.22b 0.12b
5. SQ2 Staff behavior 0.506 0.575 0.497 0.359 0.50a 0.25b 0.37b 0.19b 0.26b
6. Ideal self-congruence 0.552 0.651 0.637 0.586 0.503 0.52a 0.13b 0.26b 0.22b
7. Lifestyle congruence 0.390 0.386 0.351 0.237 0.611 0.361 0.51a 0.11b 0.11b
8. Satisfaction 0.634 0.627 0.539 0.474 0.440 0.515 0.346 0.51a 0.25b
Table III.
9. Loyalty 0.440 0.620 0.410 0.385 0.513 0.474 0.343 0.502 0.77a
Correlations, squared
Notes: aAVE is indicated along the diagonal (Italic); bsquare shared correlation are above the diagonal correlations and
(Italic) Correlations are below the diagonal AVE

dimensions of band equity were affected by brand experience (brand awareness/ b = 0.62,
p < 0.001; brand identification/ b = 0.86, p < 0.001; SQ1: Physical/ b = 0.78, p < 0.01; SQ2:
staff behavior/ b = 0.80, p < 0.001; ideal self-congruence/ b = 0.84, p < 0.01; lifestyle
congruence/ b = 0.62, p < 0.001); thus, H3a, H3b, H3c, H3d, H3e and H3f were confirmed.

Discussion and conclusion

The significance of understanding the brand experience as a marketing tool is determined
through understanding the role and its strategic importance in brand management in the
contemporary age. As Shahzad et al. (2018) also mentioned, brand experience is important
for researchers and marketers because when a brand experience is created, it influences the
customer’s long-term memory and, thus, can affect his perceptions and attitudes toward a
brand. Robinson (2007) believed that because of international and regional competition,
banks are pursuing branding strategies. Based on these strategies, in the perspective of
banks and financial institutions (Delvin and Azar, 2004), banks and financial institutions
must change their structure to achieve strong brands so as to create a distinction and focus
on their internal and external relations. By focusing on the positive and suitable customers’
JIMA Hypothesized path Standardized coefficient t-value Results
11,6
H1. Satisfaction – Loyalty 0.63 11.80 Supported
H2a. Brand awareness – Satisfaction 0.45 3.65 Supported
H2b. Brand identification – Satisfaction 0.44 2.82 Supported
H2c. SQ1 Physical – Satisfaction 0.33 3.31 Supported
H2d. SQ2 Staff behavior – Satisfaction 0.89 4.39 Supported
1456 H2e. Ideal self-congruence – Satisfaction 0.26 2.02 Supported
H2f. Lifestyle congruence – Satisfaction 0.09 0.20 Not Supported
H3a. Brand experience – Brand awareness 0.62 14.89 Supported
H3b. Brand experience – Brand identification 0.86 13.81 Supported
H3c. Brand experience – SQ1 Physical 0.78 13.36 Supported
H3d. Brand experience – SQ2 Staff behavior 0.80 12.43 Supported
H3e. Brand experience – Ideal self-congruence 0.84 14.60 Supported
Table IV. H3f. Brand experience – Lifestyle congruence 0.62 6.65 Supported
Structural parameter Notes: Chi-square (X2) = 1,291.98, df = 482 X2/d.f. = 2.67, RMSEA = 0.066, GFI = 0.95, CFI = 0.97 and
estimates of the NFI = 0.95. Chi-Square ( x 2); df (Degrees of Freedom); Goodness of Fit Index (GFI); Comparative Fit Index
study model (CFI); Normed Fit Index (NFI); and Root Mean Square Error, Approximation (RMSEA). n.s. = not significant

experience such as customer behavior and the physical quality of the bank, banks can
influence customers’ internal feelings about the bank’s brand. It is important to note that
selecting bank by customers is a utilitarian choice and WOM is very effective in attracting
customers, so it is necessary for banks to focus and invest on potential customers to
motivate current customers to do WOM. It should be especially done on the younger
customers who comment about the brands and their experiences in electronic media and
virtual worlds.
Consistent with previous research, the present research indicated that the brand
experience was effective in creating and extending loyalty through satisfaction, and most of
the studies focused on personality, trust and commitment (Bapat and Thanigan, 2016).
Brakus et al. (2009) introduced the four dimensions of brand experience used for measuring
the brand experience of products and then Nysveen et al. (2013) introduced five dimensions
of brand experience for service brands, and the present study used these approach and
dimensions.
The results indicated that the experience which is obtained from feeling and performance
plays a crucial role in creating brand equity. The results are consistent with previous
research (Shamim and Muhammad, 2013; Lin and Chang, 2003; Altaf et al., 2017; Shahzad
et al., 2018). This means that customers with a positive experience in respect with the banks
will positively talk with others about brand. Also, the results indicated the effect of
experience on brand identification and the effect of identity on customer satisfaction,
meaning that the customer uses brand identification to express his or her social identity, and
when a customer has a good brand experience, this feeling is reinforced in him and will feel
higher social value, and this will aid him to achieve his personal purposes. Consequently, it
is essential to consider the interaction points of customer and brand so that they are
provided with a sense of value and uniqueness, and as stated by Park and Kim (2015), the
brand can be realized through social relationships.
The results indicated that the quality of service (employee behavior and physical quality)
is a significant antecedent to brand satisfaction and, consequently, loyalty in the banking
sector. The research results of Nam et al. (2011) and Cifci et al. (2016) in the hospitality and
restaurant industry in England indicated the effect of service quality on customer
satisfaction and loyalty, which is consistent with the findings of the present study. The Consumer-
results also indicated that among the dimensions of CBBE, only the lifestyle congruence had based brand
no positive effect on customer satisfaction. This result may occur because banking services
are not hedonic oriented and are utility oriented; also, financial services were publicly
equity
consumed as indicated by Cifci et al. (2016), Molinillo et al. (2015) and Nam et al. (2011).
CBBE’s other dimensions had a positive and significant effect on customer satisfaction and
the most effect belonged to the perceived quality (employee behavior), and awareness and
identification were in the next ranks. The result obtained was consistent with the research 1457
conducted by Ekinci et al. (2008), Nam et al. (2011) and Cifci et al. (2016). The results of the
research indicated that brand awareness was effective on brand satisfaction, indicating that
awareness plays a crucial role for brands recently introduced to the market, and for reputed
brands, brand knowledge and beliefs can be determining to attend competition scene and
attracting the opinion of the potential customers and those of other banks. We can say that
brand identification, service quality and ideal self-congruence reduce and conceal the effect
of lifestyle congruence on brand satisfaction and loyalty in the banking industry. Lone
(2015) has suggested that banks and financial institutions should concentrate on customer’s
satisfaction because satisfaction will help in long time retention of customers.
Those who have just started to open an account in a bank usually pay more attention to
marketing mixes, and banks need to focus on promotions to turn these customers to loyal
customers, as marketing mixes and brand communication can affect the perceptions of bank
customers and increase long-term purchase behavior. Awareness of customers’
expectations and interests can be a quite significant guide to choose the brand mixes and
brand communication.
Managers and activists in the banking industry should first focus on front-line staffs
who daily deal with customers and clients, because they implement the designed branding
strategy and critically affect customer satisfaction. To achieve this, in the first place, banks
should regulate their employment policies based on branding strategic objectives and use
proper forces. In the next step, with proper training, while increasing the quality of service
delivery, their work objectives are aligned with organizational goals. In the next step, they
should make sure of the attractiveness of the tangible brand aspects and the environment
for providing services and interacting with customers, such as layout, coloring and the
clothes of employees, that is, visual aspects, to attract customers’ satisfaction and turning
them into loyal customers. Bank managers and staffs must create convenience for their
consumers, being attractive to them and honest in their dealings with them, thus
engendering strong emotional attachments that are based on attractiveness, credibility and
expertise.

Research limitations
Similar to any research, this research faced a number of limitations which will be mentioned
in the following. It was restricted to the customers of the two Iranian banks in two East and
West Azerbaijan provinces, and the results obtained in other countries and cultures may
vary from the present research, which needs more consideration. Research was limited to
investigating the effect of brand experience on brand equity dimensions in the service
sector, and variables such as brand personality can be considered. Also, only questionnaire
was used for data collection; this drawback can be overcome by using a triangulate method
(e.g. using qualitative methods such as focus group, in-depth interviews, the Delphi method,
etc.) to gain a more accurate perception. The brand experience was investigated based on the
scales introduced by Nysveen et al. (2013) for the service sector, which can be investigated
from the five-dimensional scale proposed by Bapar (2017). Finally, present study did not
JIMA account the effect of moderator variables (e.g. demographic variables, empathy levels of
11,6 service providers, banks’ brand likeability, brand engagement of individuals, etc.).
Considering the effect of these variables can provide deeper insights and raise awareness of
managers and researchers.

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Further reading
Brodie, R.J., Ilic, A., Juric, B. and Hollebeek, L. (2013), “Consumer engagement in a virtual brand
community: an exploratory analysis”, Journal of Business Research, Vol. 66 No. 1, pp. 105-114.
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the challenges of branding financial services successfully”, Journal of Brand Management,
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Kapferer, J.N. (2005), The New Strategic Brand Management, Kogan Page, London.
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emotion, satisfaction, and brand loyalty”, Journal of Hospitality and Tourism Research, Vol. 33
No. 3, pp. 305-328.
Phau, I., Teah, M., Lim, A. and Ho, R. (2015), “A brief affair with underwear: Uniqueness and
innovativeness in male underwear brand purchases”, Journal of Global Fashion Marketing,
Vol. 6 No. 3, pp. 222-235.

Corresponding author
Hadi Moradi can be contacted at: h_moradi@semnan.ac.ir

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