THE EFFECT OF BRAND EQUITY ON CUSTOMER LOYALITY: THE CASE OF ARADA BEER

Abstract

This study explores the relationship between brand equity dimensions—Brand Awareness, Perceived Quality, and Brand Association—and customer loyalty within the context of Arada Beer in Addis Ababa, Ethiopia. Through a mixed-methods approach incorporating quantitative data collection and analysis, the research aims to provide insights into the factors influencing consumer behavior and brand management strategies in the beverage industry. The study begins by reviewing relevant literature on brand equity, customer loyalty, and their interplay in the business landscape. Drawing on established theoretical frameworks, including Keller's Brand Equity Model and Aaker's Brand Equity Framework, the research develops hypotheses to test the influence of brand equity dimensions on customer loyalty. Data collection involves surveying customers of Arada Beer, utilizing structured questionnaires to gather quantitative insights. Statistical analyses, including reliability testing, correlation analysis, and regression modeling, are employed to examine the relationships between brand equity dimensions and customer loyalty. The findings reveal significant positive associations between Brand Awareness, Perceived Quality, Brand Association, and customer loyalty, supporting the hypotheses formulated. Specifically, higher levels of Brand Awareness, Perceived Quality, and Brand Association are found to be associated with increased customer loyalty, highlighting the importance of strategic brand management in driving consumer perceptions and choices. The study concludes with practical implications for Arada Beer, suggesting actionable strategies to enhance brand equity and cultivate stronger customer relationships. Additionally, it identifies avenues for future research, including exploring additional factors influencing customer loyalty and assessing the long-term effects of brand equity initiatives. This research contributes to the academic understanding of brand management and provides practical insights for businesses operating in the competitive beverage market. By leveraging the findings of this study, companies like Arada Beer can develop effective brand strategies to strengthen their competitive position and foster long-term customer loyalty