The aim of this thesis is to measure scientifically whether brand equity dimensions have any

Transkript

1 ABSTRACT Brand equity compromises all the feelings and considerations of consumers towards a brand of a company. Brand equity provides benefit to both brand and consumer. At the same time, brand equity is evaluated financially. Corporate reputation on the other hand is composed of rational and emotional judgements of corporate stakeholders about corporation. The aim of this thesis is to measure scientifically whether brand equity dimensions have any effect on firm value by moderating the perceived reputation dimensions of the companies. By this aim, a model is formed to show relationship between these three concepts by measuring the corporate reputation and brand equity perceptions of users and non-users of 10 corporations that are listed as Large Stores under the Nace classification of Istanbul Stock Exchange (ISE). The results, together with firm values of these companies which are the secondary data (Book to Market Ratio) were tested with structural equation modeling by using both AMOSv20 and R programmes. To the best of our knowledge, there is not any academic research globally and in Turkey that measures the relationship between these 3 concepts. According to the results of analysis, brand equity dimensions have statistically and scientifically meaningful effect on perceived reputation dimensions and on firm values of the companies.

2 Keyword: Brand equity, corporate reputation, user perception, non-user perception, firm value, structural equation modelling ÖZET Marka değeri bir işletmenin sahip olduğu marka hakkında tüketicilerin duygu ve düşüncelerinden oluşur. Hem markaya hem de tüketiciye yararlar sunar. Aynı zamanda finansal olarak da değerlendirilir. Kurumsal itibar ise, kurumun çalışmalarından etkilenen ve kurumu etkileyen çevrenin oluşturduğu kurumsal paydaşların kurum hakkındaki rasyonel ve duygusal değerlendirmelerinden oluşur. Bu çalışmanın amacı, firmaların marka değeri bileşenlerinin, tüketici ve potansiyel tüketici gözündeki algılanan kurumsal itibar bileşenlerini modere ederek firma değerine etki edip etmediğini ölçmek ve etkinin derecesini belirlemektir. Bu amaçla BIST te yer alan ve Büyük Mağazalar Grubu olarak adlandırılan 10 perakende firmasının her birinden 30 kullanıcı ve 30 da kullanmayan kişi üzerinde marka değeri ve kurumsal itibar ölçülerek aynı firmaların değerleri ile birlikte incelenmiştir. Bu üç kavram arasındaki ilişkiyi gösteren bir model oluşturularak, model AMOSv20 ve R programlarının her ikisi de kullanılarak yapısal eşitlik modellemesi ile sınanmıştır. Firmaların değerleri Defter Değeri/Piyasa Değeri oranı üzerinden ölçülmüştür. Türkiye genelinde yapılan bu araştırma bildiğimiz kadarıyla literatürde ilk olma özelliği taşımaktadır. Analiz sonuçlarına göre tüketici ve potansiyel tüketici algısı açısından marka değeri, kurumsal itibar ve firma değeri arasında pozitif ve istatistiksel açıdan anlamlı bir ilişki tespit edilmiştir. Anahtar Kelimeler: Marka değeri, Kurumsal itibar, tüketici algısı, potansiyel tüketici algısı, firma değeri, yapısal eşitlik modellemesi.

3 TABLE OF CONTENTS List of Tables INTRODUCTION 1.1 Structure of the Thesis Brand Equity Definition, Perspectives and Principal Conceptualizations Definition, Perspectives and Principal Conceptualizations of Corporate Reputation Definition, and Principal Conceptualizations of FirmValue Research Questions and Potential Contribution Methodology Outline of Dissertation Conclusion LITERATURE REVIEW 2.1. Brands and Branding Definition of Brand The Evolution of Branding Brand Equity Definition of Brand Equity Perspectives of Brand Equity Brand Equity Perspective of this Dissertation Principal Conceptualizations of Brand Equity Brand Awareness Brand Associations

4 Brand Loyalty Perceived Quality Measurement of Brand Equity Brand Asset Valuator Model Brandz Model Equitrend Model Brand Power Model Interbrand Model Aaker Model Keller Model Corporate Reputation Definition and Related Concepts of Corporate Reputation Corporate Culture Corporate Identity Corporate Personality Corporate Image Corporate Stakeholder Components of Corporate Reputation Value and Importance of Corporate Reputation Aim and Management of Corporate Reputation Measurement of Corporate Reputation Reputation Quotient Emotional Appeal Products and Services Vision and Leadership

5 Workplace Environment Social Responsibility Financial Performance Corporate Reputation Scale of Fortune Magazine Corporate Reputation Scale of Capital Magazine Rep Trak Model Corporate Personality Scale Delahaye Corporate Reputation Index GFK Rep-Man Corporate Reputation Scale 2.4. Firm Value Definition of Firm Value Major Approaches and Methods of Measurement of Firm Value, Implications and Their Limitations Book to Market Ratio Tobin s Q Ratio 2.5. Summary of Retail Sector Literature and Large Stores in Borsa Istanbul Definition of Retailing Classification of Retailing Major Retailing Theories Large Stores Classification in Borsa İstanbul 2.6. Conclusion of the Literature Survey The Link Between Brand Equity and Corporate Reputation Perspective of this Dissertation on the Relations Between Brand Equity, Corporate Reputation and Firm Value 3. THE RESEARCH DESIGN AND METHODOLOGY

6 3.1. The Consumer Research Research Objective Research Problem Research Model and Variables Sampling Sampling Unit Sampling Method Sample Size Data Collection Methods Data Collection Instruments and Measuring Data Analyses Procedures Factor Analysis Structural Equation Modelling.. 4. EMPIRICAL FINDINGS Descriptive Statistics Demographic Factors Factor Analysis Reliability Analysis Structural Equation Modelling Scores 4.2. Relations between Demographics and Various Factors of the Research Model 5. CONCLUSION AND IMPLICATIONS OF THE STUDY 5.1. Summary Discussion of the Results Implications of the Study Limitations of the Research...

7 5.4. Directions for future Research.. BIBLIOGRAPHY APPENDICES APPENDIX 1 The List of the Interviewed Executives. APPENDIX 2 The Pilot Study Results.. APPENDIX 3 Statistics about Turkish Retail Business. APPENDIX 4 The Questionnaire (Final Version in Turkish). APPENDIX 5 The Questionnaire (Final Version in English)..

8 1. INTRODUCTION 1.1. Structure of the Thesis Brand equity and its impact on reputation and firm value are one of the relatively unexplored areas. Brand equity is formed with the aid of the whole lot of perceptions of a variety of stakeholders, both present and ability ones, consisting of customers, suppliers, employees, community, opinion makers, and government officials. This study is an empirical research on brand and its effect on firm reputation and firm value. Brand equity bargains every one of the sentiments and contemplations of consumers towards a brand of a company. It alludes to the act of advancing the brand name of a corporate entity, rather than specific products or services. Brand equity influences different partners (e.g., employees, investors) and affects numerous aspects of companies, for example, brand loyalty, awareness, perceived quality and brand affiliations. Power of brand equity can increase the company s conspicuity, acknowledgement and credibility in ways not completely appreciated by product-brand considering. The brand equity contributes not exclusively to the client-based picture of the company yet to the picture framed and held by every one of its stakeholders. The concept of the brand equity has lately risen to prominence in each academic and practitioner fields. Several authors are pointing to the monetary price inherent in managing and developing the brand at all the stages of the company. Common problem in the brand equity is its measurement. It can not be measured previously whether there is any effect of brand equity on firm value or firm reputation or not. To date, there has been just limited research on the processes that empower an organization to connect with effectively in brand administration. In addition, there isn't any empirical look into

9 on whether brand equity by directing firms' corporate reputation effect firm value or not in the literature in Turkey and to the best of my insight in the world. The purpose of this thesis is to measure scientifically whether brand equity dimensions have any effect on firm value by moderating the perceived reputation dimensions of the companies. By this aim, a model is formed to show a relationship between these three concepts by measuring the corporate reputation and brand equity perceptions of users and non-users of 10 corporations that are listed as Large Stores under the Nace classification of Istanbul Stock Exchange (ISE). The results, together with firm values of these companies which are the secondary data (Book to Market Ratio) were tested with structural equation modeling by using both AMOSv20 and R programmes Definition of Brand Equity, Perspectives and Principal Conceptualizations Brand equity is, if not the most, one of the essential marketing concepts for both scholarly world and practice. Academics concentrate on its measurement and importance for a company, while practitioners concentrate on its influence on the consumer decisions with respect to different brand purchases in order to increase their brand equity. The term has been used since the late 1980s; and the importance of conceptualizing, measuring and managing brand equity has grown rapidly both for practitioners and academics alike (e.g. Aaker,1991, 1996; Aaker and Keller, 1990; Ailawadi et al., 2003; Erdem et al., 2006; Keller, 1993,2003; Netemeyer et al., 2004). This has followed in several often-divergent views-points on the dimensions of brand equity, the factors that influence it, the perspectives from which it should be studied, and the ways to measure it (Ailawadi et al., 2003 p. 1). There are many ways to define and to measure brand equity (seepart 2), and most of them are based upon Farquhar s (1989) definition: the added value with which a given brand endows a product. Brand equity is an important concept in business practice as well as in academic area

10 because it is used by marketers to obtain competitive benefits via successful brands. Trough this strong brand equity gains a company opportunity for successful brand extensions, resilience against competitors promotional efforts, and the creation of barriers to competitive entry (Farquhar, 1989). Brand equity can be viewed as exuding from three alternate perspectives. The first one of them is the cognitive psychology perspective, which characterizes brand equity as the differential consumer reaction to a brand s marketing mix that outcomes from consumer relationship for a brand (Aaker,1991; Keller, 1993). This perspective considers the way that brands for which consumers have more great brand affiliations or brands with higher brand equity, will have the capacity to generate more positive marketing mix responses from their consumers than brands with less ideal brand affiliations. Consequently, regarding the cognitive perspective, brand equity is a consequence of consumer reaction to marketing activities, affected by consumers brand affiliations (Anderson, 2007). The second one of them is is the information economics perspective. This perspective sees brand equity as the expanded utility that a brand name gives to a product (Erdem and Swait, 1998; Wernerfelt, 1988). In this context, the brand name is a signal to consumers of product quality; it is gotten from perceived firm costs or investment. This perceived quality decreases data costs for the consumer, thereby increasing utility. This perspective is imperative in that it brings the firm perspective into brand equity (Anderson, 2007). The third one of them is the financial markets perspective and it defines financial-based brand equity (FBBE) as a money-related measure of a firm s market value minus the tangible asset value (Simon and Sullivan, 1993). The importance of this perspective stems from its forwardlooking measurement of brand equity.

11 Despite these three different perspectives, we can classify brand equity into two broad categories: financial and consumer-based brand equity (CBBE) (Keller, 1993). What s more, a third classification of brand equity has been as of late proposed, since brand equity influences and brings an incentive to numerous partners of a company; employee based brand equity (EBBE) (King and Grace, 2009). King and Grace (2009) characterize EBBE as the differential effect that brand knowledge has on an employee s response to their work environment. By and large, the term consumer-based brand equity is normally used to allude to brand equity in general (Rajasekar and Nalina, 2008). The two maximum influential conceptualizations of brand equity are Aaker s (1991) and Keller (1993). Brand equity is defined by Aaker as a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm s customers. In his definition brand equity has four dimensions: brand awareness, brand loyalty, brand associations, and perceived quality. Compared to above-mentioned definition, Keller (1993) evolves the customer-based brand equity model (CBBE). This model is the most extensively used model today. Keller defines CBBE by stating that the strength of a brand rests on what the clients have discovered, felt, visible, and heard about it through time, that is, rests in their minds. Subsequently, CBBE is the differential effect of brand knowledge on consumer response to the marketing of the brand. Keller s (1993) definition of CBBE is used in arguing that brand equity is placed based on what consumers sense, see, and pay attention approximately the brand through time, therefore, the meaning of brand equity rests inside the consumers minds Definition, Perspectives and Principal Conceptualizations of Corporate Reputation In today s incredibly capable of competing, dynamic and turbulent business environment, companies attempt to search for ways to differentiate their services and build favorable

12 relationships with a company s partners. Reputation is a crucial way by which companies can keep a sustainable competitive gain and endure a long-term relationship with multiple stakeholder groups (Boyd et al, 2010). It is the maximum precious intangible asset that enables maintain the organization enterprise during its lifetime. Further, a good corporate popularity is thought to protect an organization at times of crises. However, it can handiest take one terrible incident to damage a reputation, quote Warren Buffet: It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you ll do things differently. - Warren Buffet. Examining the impact of company reputation on firm value is turning into more vital today than ever. This is due to many factors which includes: extended public attention about company moves and troubles, the multiplied requirement for transparency, better expectancies by multiple stakeholder groups, word-of-mouth and online communique, customer s personal experience with a company s products and services, the impact of the influence of opinion leaders, growth in interest groups and elevated interest from media have all contributed to the importance of assessing and actively managing a corporation s popularity. In the past, companies implemented a passive approach to control company reputation. When companies were faced with a terrible situation, they would form a project pressure that cold work on fixing this terrible situation as quickly as possible with a view to minimize its negative results on the organization and pass back to the ordinary commercial enterprise. However, there was nothing finished actively control reputation in the long term. This reactive method was discovered to be unsustainable in today s environment. Companies are now extra at risk of their existence and sustenance so long as they do not actively and proactively seek to conduct their reputations. Companies which includes Enron, failed to outlive because of lack of reputation management. Companies should actively conduct their reputations and no longer simply react when they are faced with a terrible situation.

13 Much of the academic research has focussed on the corporate reputation during the past two decades (Logsdon and Wood 2002). In recent years, both scholars and practitioners have had increased emphasis on the value of the reputation (Fombrun and Van Riel 2004; Bromley 2002; Chun, 2005; Hillenbrand and Money, 2006; Helm, 2007; Chettamronchai, 2010). With the enormous increase within the wide variety of research papers on corporate reputation, there has been a clear fragmentation and diversion to that means of corporate reputation, the essence of the concept, its measurement, and its managerial implications. Corporate reputation is a stable combination perceptual representation of organizational actions in the past and prospects in the future in the view of its stakeholders, measured against a few standard (Fombrun 1996; Walker 2010). As such, corporate reputation is taken its roots in the organization s historical behavior and associations and impacts its relationships with its stakeholders. Corporate reputation has been an more and more attracted interest for a huge variety of academic disciplines. Table 1. Categorization of corporate reputation literatures Discipline Categorization of reputation Accountancy Reputation seen as an intangible asset and one that can or should be given financial worth. Economics Reputation viewed as traits or signals. Perception held of the organization by an organization s external stakeholders. Marketing Viewed from the customer or end-user s perspective and concentrating on the manner in which reputations are formed. Organization Viewed as the sense-making experiences of employees or the perception of The behaviour organization held by an organization s internal stakeholders. Sociology Viewed as an aggregate assesment of a firm s performance relative to expectation and norms in an institutional context. Strategy Reputation viewed as assets and mobility barriers. Since reputations are based on perception, they are difficult to manage. Source: Fombrun and van Riel (1997).

14 There are three schools of thought that are in use within the reputation paradigm: evaluative, impressional and relational. The variations among them relate more to which stakeholders are taken as the point of interest, in preference to their subject area or epistemological base. There are several scales of measurements which are used to measure corporate reputation. Reputation Quotient is the most famous one of them. At this thesis I will use 6 dimensions and 20 attributes scale of the Harris-Fombrun Reputation Quotient. GFK Research company translated this scale into Turkish and I will use this translation version. The dimensions of this scale are emotional appeal, products and services, vision and leadership, workplace environment, social responsibility and financial performance. All of them will be described in detail at following parts of this dissertation Definition and Principal Conceptualizations of Firm Value Corporate Boards, CEOs, CFOs, consultants, investors and academics are all interested in the question of if and how corporate reputations create financial value for companies. In a narrow sense, market value (OMV or Open Market Valuation) is the value given to market participants by the market price of an economic entity in a market. International Valuation Standards defines market value in a broad sense as "the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion. If the companies are floating on any exchange market, publicly held data satisfies us to measure the market share of these companies from their share price * number of their shares that are floating. There are many other measurement methods and the most suitable one will be used in this thesis. There is no any empirical research study about the effects of corporate branding on firm reputation and market value.

15 There are several ways to measure firms market value. Some of the basic methods are Book to Market Ratio and Tobin s Q Ratio. In Turkey, there is not enough publicly held data of the companies so it not easy to measure the companies value distinctly. The best method is the Book to Market Ratio so we will use this ratio of the companies listed on Istanbul Stock Exchange at our model in order to measure the market values of the companies. The value of a company is measured through the book-to-market ratio by comparing the book value of a firm to its market value. The firm's historical cost or accounting value plays a very important role in the calculation of book value. Market value is diagnosed in the stock market through its market activation Research Questions and Potential Contribution 1.3. Methodology This dissertation is the first thesis that researches the impact of brand equity and its dimensions on firm value by the moderating the corporate reputation. It is established on the previous research in the context of brand equity and corporate reputation and has used the identical conceptualization of the concept based on previously determined dimensions (i.e., based on either the Aaker 1991 or Keller 1993 theoretical models). In order to develop a joint model for both measuring the brand equity and corporate reputation effects of firm value Yoo Dontu brand equity scale and GFK Repman Reputation Index were used to develop a questionnairre. The Pilot Survey was conducted on 5 th of April, 2016 and necessary corrections were made. After the consent of thesis advisor, the field phase of qualitative research was started and survey data were collected between 18 th of April and 30 th of May. In order to measure the firm value, 1 year secondary data (May 2015-May 2016 YoY) of the Borsa İstanbul listed Large Store companies were collected.

16 The responses were analysed together with secondary data using AMOSv20 and R programmes and the findings were explained at the later chapters of this dissertation Outline of Dissertation 1.5.This dissertation consists of five parts. The introduction first deals with the presentation of the dissertation. The second one is dedicated to the extant literature regarding brand equity as well as corporate reputation and its dimensions, firm value and their measurement methods and retail sector and specifically the retail companies publicly traded under the name of Large Stores in Istanbul Stock Exchange (ISE) are reviewed in-depth and the gap in the literature is revealed. The third one introduces the research methodology of the survey and the fourth one summarizes the empirical findings with extensive analysis. The last one researches implications and suggests for future. 1.6.Conclusion The foundation of the dissertation is laid in this part. The research problem and questions, some definitions found place here and briefly the followed methodology was discussed and justified. The dissertation can continue with a detailed description of the extant literature in the next part. 2. LITERATURE REVIEW 2.1. Brands and Branding Definition of Brand There are many different definitions of the brand. The American Marketing Association (AMA) sees the brand as a name, term, sign, symbol, design, or a combination of goods and services of a firm with the intention to distinguish them from the competition. While Kotler defines the brand as a product offer from a known source (Kotler, 2000), Keller (2003) sees the brand as a reference for a product that differentiates it from the others. The existence of a

17 brand is depended by Kapferer (1997) on the presence of a certain perceived risk. Without it, a brand would be regarded only the name of a product. Therefore, a brand makes choice of the consumer easier and less hazardous (Barwise et al., 1990) and it is an anchor for the consumer (Kapferer, 1997). A brand is also an intangible but critical component of what a firm means; a set of promises (Davis, 2002). Finally, Bedbury and Fenichell (2002) say that a brand is, if it is something, the result of a synaptic process in the brain. They are sponges for content, images, feelings, sensations, and experiences; psychological concepts inside consumers minds. As a result, brands improve the value of a product beyond its functional purpose (Farquhar, 1989). Consumer perceptions play determining role in all definitions of the brand. Despite different perceptions of the different costumer on the same brand can be a brand defined as a collection of many meanings. Each one of physical products, services, stores or distributors, persons, places, organizations and even animals has a brand and each brand has many different functions for consumers (Kapferer 1997). They are reference for consumers practicality in saving time and energy and they are identical with product or service quality. Each brand has its optimization in assuring the best buy within a category and its characterization in being the confirmation of your selfimage. Continuity in satisfaction with familiarity and intimacy makes the brand steady. Hedonistic in satisfaction depends on brand attractiveness and an ethical function in satisfaction depends on responsible behaviours The Evolution of Branding In parallel to consumer of brands has branding changed and evolved over a period (Aaker and Joachimsthaler, 2000; Davis, 2002). Historically, the companies saw the branding as part of their operations. When they cut their budgets, they concentrated first on the branding expenditures to get dropped from the budget (Aaker and Joachimsthaler, 2000; Davis, 2002).

18 Companies didn t focus a long-term on the retaining consumers, deriving benefits from the product, and growing market proportion. Nowadays, branding is considered as the vital function and asset inside of an organization (Aaker and Joachimsthaler, 2000; Davis, 2002). Creating loyalty to the brand constitutes the central point of the modern branding since brands have got the most important assets within firms. Therefore, measuring the strategic value of a brand brand equity has been regarded as a preferential importance Brand Equity Brand equity is one of the essential marketing concepts for both scholarly world and practice. (Christodoulides and de Chernatony, 2010; Keller and Lehmann, 2006). Academics concentrate on its measurement and importance for a company, while practitioners concentrate on its influence on the consumer decisions with respect to different brand purchases in order to increase their brand equity. The term has been used since the late 1980s; and the importance of conceptualizing, measuring and managing brand equity has grown rapidly both for practitioners and academics alike (e.g. Aaker, 1991, 1996; Aaker and Keller, 1990; Ailawadi et al., 2003; Erdem et al., 2006; Keller, 1993, 2003; Netemeyer et al., 2004). This has followed in several often-divergent views-points on the dimensions of brand equity, the factors that influence it, the perspectives from which it should be studied, and the ways to measure it (Ailawadi et al., 2003, p. 1). Consumers truly expand emotions and associations with brands. Thereby a loyalty develops between consumers and brands due to their added value (i.e., their brand equity) (Barwise, 1993). Because of valuable assets of brands to companies has the learning or understanding of brand equity became more and more important (Kapferer, 2005) Definition of Brand Equity Farquhar s (1989) definition is a basis for many definitions and methods to measure brand equity: the added value with which a given brand endows a product (p. 24). Aaker (1991, 1996) sees it as a collection of brand assets and liabilities that results value addition or

19 subtraction. Dedinition of Srivastava and Shocker (1991) focusses on the increasing value a brand name gives a product. Financial impact of a brand plays very important role at definition of Holbrook (1992) and Simon and Sullivan (1993). Keller (1993, 2003) defines it as consumer reaction to the marketing of a brand. Park and Srinivasan (1994) define it as the incremental consumer preference for a brand. Kapferer (1997) further regards brand equity by stating the brand has an economic function, the value of a brand (brand equity) derives from its capacity to generate an exclusive, positive, and prominent meaning in the minds of a large number of consumers. In the concept of Berry (2000) is it a differential effect of brand awareness and meaning combined with customer reaction to the marketing of the brand. In direction of definition of Yoo et al. (2000), it is a difference in consumer choice between a branded and an unbranded product given the equal stage of product capabilities. Clow and Baack (2005) concentrate on its characteristics that make a brand unique in the marketplace, let the company to gain a higher price and maintain a greater market percentage than would be possible with an unbranded product. All the definitions show that there is no universally accepted definition of brand equity. Most definitions meet at that point brand equity denotes the added value endowed by the brand to the product. This dissertation adopts Yoo s (2000) definition of brand equity: the difference in consumer choice between a branded and an unbranded product given the same level of product features Perspectives of Brand Equity Brand equity can be viewed as exuding from three alternate perspectives. The first one of them is the cognitive psychology perspective, which characterizes brand equity as the differential consumer reaction to a brand s marketing mix that outcomes from consumer relationship for a brand (Aaker,1991; Keller, 1993). This perspective considers the way that brands for which consumers have more great brand affiliations or brands with higher brand equity, will have the capacity to generate more positive marketing mix responses from their consumers than brands

20 with less ideal brand affiliations. Consequently, regarding the cognitive perspective, brand equity is a consequence of consumer reaction to marketing activities, affected by consumers brand affiliations (Anderson, 2007). The second one of them is is the information economics perspective. This perspective sees brand equity as the expanded utility that a brand name gives to a product (Erdem and Swait, 1998; Wernerfelt, 1988). In this context, the brand name is a signal to consumers of product quality; it is gotten from perceived firm costs or investment. This perceived quality decreases data costs for the consumer, thereby increasing utility. This perspective is imperative in that it brings the firm perspective into brand equity (Anderson, 2007). The third one of them is the financial markets perspective and it defines financial-based brand equity (FBBE) as a money-related measure of a firm s market value minus the tangible asset value (Simon and Sullivan, 1993). The importance of this perspective stems from its forwardlooking measurement of brand equity. There are two problems with this perspective. The first one ist the enhancement on the brand as the asset of the only intangible value for a firm (such as human capital is not considered). The second one is the measurement of equity for firmlevel (corporate) brands only not a firm s product-level brands, e.g. Coke Zero for Coca- Cola. Nevertheless, this perspective is important for foresighted measurement of brand equity (Anderson, 2007). Despite these three different perspectives, we can classify brand equity into two broad categories: financial and consumer-based brand equity (CBBE) (Keller, 1993). What s more, a third classification of brand equity has been as of late proposed, since brand equity influences and brings an incentive to numerous partners of a company; employee based brand equity (EBBE) (King and Grace, 2009). King and Grace (2009) characterize EBBE as the differential effect that brand knowledge has on an employee s response to their work environment.

21 By and large, the term consumer-based brand equity is normally used to allude to brand equity in general (Rajasekar and Nalina, 2008). Brand equity has also been researched from distinctive commercial areas. While brand equity is regarded from the marketing side as the added value that a brand endows a product, it is seen from the financial side as an influence on the increasing cash flow that accrues to the company because of owning a brand. In the final analysis and from the accounting side, brand equity is replaced by trademark and associated goodwill, since accountants see the world in terms of assets not brands (Knowles, 2008) Brand Equity Perspective of this Dissertation This study focusses on the consumer-based brand equity perspective. FBBE or EBBE is not discussed here. They are outside the extent of this examination. Raison d'être of this decision is based on the following: The financial value of brand equity is at last the result of consumer reaction to a brand name. CBBE has a driving function in expanded market share and profitability of the brand (Christodoulides and de Chernatony, 2010). The financial-based perspective is an instrument to measure the results of customer-based brand equity. The Aaker s (1991) and Keller s (1993) brand equity conceptualizations und their dimensions are used in this study to explain brand equity accordingly. We concentrate on Yoo & Dontu Brand Equity Model too. (2001).

22

23 Principal Conceptualizations of Brand Equity The conceptualizations of Aaker s (1991) and Keller s (1993) are determinant for brand equity. Brand equity is defined by Aaker as a set of brand assets and liabilities linked to a brand, its name, and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm s customers. In his definition brand equity has four dimensions: brand awareness, brand loyalty, brand associations, and perceived quality. Compared to above-mentioned definition, Keller (1993) evolves the customer-based brand equity model (CBBE). This model is the most extensively used model today. Keller defines CBBE by stating that the strength of a brand rests on what the clients have discovered, felt, visible, and heard about it through time, that is, rests in their minds. Subsequently, CBBE is

24 the differential effect of brand knowledge on consumer response to the marketing of the brand. Keller s (1993) definition of CBBE is used in arguing that brand equity is placed based on what consumers sense, see, and pay attention approximately the brand through time, therefore, the meaning of brand equity rests inside the consumers minds. Brand awareness is straightforward to measure in phrases of recognition and recall. Recognition is the consumers potential to verify previous exposure to the brand when given the brand as a cue. Therefore, it is consumers potential to understand the brand when they see an image of the logo for example. The recall is consumers capacity to retrieve the brand when given the product class. For example, in case you ask a person to list the top three fast-food restaurants, then they are recalling the top of mind brands for them. However, measurement of brand image is difficult because it is made up of the perceptions about a brand as meditated by the brand associations held in consumer memory related to attributes, benefits, and attitudes. Therefore, the aim is to produce unique, strong, and favorable associations in consumers minds that to make a stronger brand image. Marketing mix tools can control these associations partially. However, an overall control of a brand s image is impossible because of dependence of many brand associations on aspects that are out of a firm s control, e.g. external brand statistics, revel in consumers have immediately immediately with the brand, consumers identification of a brand with a firm, country, place, event, or person that is not necessarily the one supposed by the company, amongst many others Brand Awareness Brand awareness moves into the ability of a potential buyer to recognize or recall that a brand is a member of a certain product category (Aaker, 1991, p. 61). The outcome is brand awareness when consumers are embarrassed to a brand. Therefore, building brand awareness is the first step in building brand equity. With the purpose to measure brand awareness, we are bound to measure brand recognition and recall (Keller, 1993; Aaker, 1996).

25 Brand Associations Brand associations are the view of the meaning of brand for a consumer and are anything linked in memory to a brand. By any contact or experience with a brand can a consumer create, change, or reinforce certain favorable or unfavorable associations (Keller, 2003). For a positive effect on brand equity must the associations be unique, strong, and favorable (Keller, 2003) Brand Loyalty Brand loyalty is the central point of brand equity. Oliver (1997) defines it as a deeply held commitment to rebuy or repatronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same-brand set purchasing despite situational influences and marketing efforts having the potential to cause switching behavior. Gil et al. (2007) see loyalty as an important dimension and raison d être of equity. The brand loyalty based on consumer perception adds considerable value to a brand or firm because it creates a stable and long-term group of buyers that will less likely transfer to a competitor due to price Perceived Quality The consumer s judgment of a product or brand s overall superiority or excellence is determinant on the perception of quality. (Zeithaml, 1988). Consequently, firms must truly growth the actual quality of their brands and then crown this quality through their marketing actions to influence perceived quality in a positive manner. High perceived quality is an important factor on the consumers to be convinced about buying the brand; on the differentiation of the brand from competition; and on the firm to charge a premium price and then extend the brand (Aaker, 1991) Measurement of Brand Equity

26 There are many models to measure brand equity. These are classified as Consumer Based Models and Financial Based Models. Financial models measure brand equity based on financial terms licence prices, price premiums etc. Financial methods can be classified as brand cost, market value, royalty fee, valuation based on the added value that the brand creates for the company. (Akbulut ve Paksoy, 2007:127). Since my dissertation is on consume based brand equity, in this section I will talk about the consumer based brand equity models Brand Asset Valuator Model A comprehensive method for valuing brands called the Brand Asset Valuator was developed by Young & Rubicam, a major global advertising agency. In this method are used thirty-two questions covering four broad factors. With the help of this method, they measured for 450 global brands and more than 8,000 local brands across twenty-four countries (Van Riel ve Fombrun, 2007:232). (Van Riel ve Fombrun, 2007:233) Differentiation: What distinguishes your brand from others? Brand health is built and maintained by way of imparting a fixed of differentiating guarantees to consumers and handling over those guarantees to leverage value. Rolls-Royce and Disney stand proud of other cars and theme parks.

27 Relevance: Relevance calibrates the personal adequacy of a brand to consumers and is forceful bounded to household penetration (the percentage of households that purchase the brand). Band-Aid, Maggi, Reynolds, Kissan Ketchup are good example for a strong relatendness of intire household in this spirit. Esteem: The consumer's reaction to a marketer's brand-building activity is operated by his perception of two factors that vary by country and culture: quality and popularity. Brands such as Kodak, Maruti, Pepsi, Amul and Raymonds are respected in the consumer s mind, based on popularity more than quality. Knowledge: The awareness levels about the brand is an indicator of intimacy that consumers share with the brand. There is a correlation between the true knowledge of the brand and the brand-building. Power Grid: Brand Strength vs. Brand Stature Brand Strength: The strength of brands depends on both Differentiation and Relevance (Disney, Britannia, Hallmark). Brand Stature: Brand Stature is a combination of esteem and knowledge and a strategic indicator of reflection of current brand performance (BPL, Pepsi). First esteem incrreases than knowledge for chocolates, soft drinks and other impulse-purchase products. The strength or weakness of a brand is identified by a strategic process set by the Power Grid. Vertically is conspired the the brand strength - its relevance and differentiation, while horizontally, the brand stature -esteem and knowledge.

28 Quadrant I: The brands could not leverage their strengths (weak brands). Quadrant II: The brand managers can not realise the true potential of the brand. The stature of the brand should be build with the help of a strategy. Quadrant III: The continuity on the way of becoming a leader would be the challenge for the brand. Quadrant IV: The last quadrant points Danger for the brand, an indicator of erosive potential. These brands break down to maintain their Relevant Differentiation (their core strength). If unsupervised, their stature will also begin to fall. Without any effort to stimulate the differentiation and relevance, these brands will lose esteem and could finally fade from consumers' focus. Without any continuous value addition, the value of a brand depreciates. This is critical point for a brand to protect of its competitive advantage. The task of a marketer is not only to go measuring and leveraging the value of the brand. The addition of continuous perceptible value has to be one of its tasks too Brandz Model The BRANDZ has been developed by marketing research consultants Millward Brown and WPP. It is a model of brand strength at the heart of Brand Dynamics pyramid. Pursuant to this model, the brand building includes a sequential series of steps, where each step is contingent upon successfully conducting the preceding step as follows: Presence. Do I recognize approximately it? Relevance. Does it provide me something? Performance. Can it deliver? Advantage. Does it provide something better than others? Bonding. Not anything else beats it.

29 Source: Van Riel ve Fombrun, 2007: 238. Research has indicated that tied consumers, those at the top level of the pyramid, establish stronger relationships with the brand and spend extra of their category expenditures on the brand than those at lower levels of the pyramid. More consumers, however, will turn up at the lower levels. Development of activities and programs to move up consumer the pyramid is the challenge for marketers Equitrend Model Harris Poll EquiTrend has been guided since 1989 and checks the predictors of in-market performance: Brand Equity, Consumer Connection, and Brand Momentum. The Equity score the capstone of the study. Brand Equity, as defined by Nielsen (EQI), is formulated to be a summarization of a brand s health, a one-number score that enables you to understand the strength of your brand. Comparison across brands, consumer segments, geographies and even industries is possible. The value of the measure is not in its complexity, but in our capacity to understand the drivers behind it. Based on EQI there are the three simple questions following: How well do I know you? What do I think of you? Do I want to interact with you?

30 Harris Poll EquiTrend lay the foundation of its online studies on a sample of U.S. consumers ages 15 and over. Each respondent is requested to rate a complete of 40 randomly decided on brands out of 3,000+ brands in 300+ categories. Each brand achieves approximately 1,000 scores. Respondents are requested their familiarity with brands and rate the brands they are somewhat, very, or extremely familiar with. Respondents for this survey are selected from among sample partner surveys participated in Harris Poll. The data reflects the composition of U.S. residents age 15+ who agreed to participate in an online panel, no estimates of theoretical sampling error can be calculated Brand Power Model A powerful brand influence coefficient on the corporate performance with two interrelated functions: it impacts awareness and understanding at one hand and perceptions on the other hand. Generally accepted market studies have shown that if your business is known to your target audience, it is more desirable and acceptable. Corporate Branding Index (CBI), focuses on a metric called BrandPower. It is a mixture of measures that represent both the size (Familiarity) and quality (Favorability) of a company s brand. In one metric, the breadth of, and sentiment in direction of, a corporate brand is captured. A single score offers a benefical perspective to evaluate the performance of a corporate brand. Companies can thereby see the effect of their brand investment by tracking their own score over time. It paves the way for easy comparison among competitors, against industry averages and against world-class-brands. It also enables us to contrast multiple industries to better understand the market dynamics that influence brand.

31 A strong Familiarity and Favorability is determinant to place in the Top 100 Most Powerful Brands, meaning the company has both high awareness and is favorably perceived. If one of the Familiarity or Favorability fails, it will not show up in the Top 100 rankings. In the CoreBrand Top 100 Most Powerful Brands, achievement of a high BrandPower score is pre-condition for the companies tracked in the CBI to be celebrated. These are the companies whose brands are their powerful tools as a parameter on the corporate value. BrandPower is a combination of a corporate brand s Familiarity and Favorability. Familiarity: The Familiarity issue of BrandPower is a weighted percent of survey respondents who are familiar with the brand being evaluated. Familiarity is evaluated on a five-point scale. Respondents are contemplated to be familiar with a brand if they state that they know more than only the company name (a score of 3 to 5). Favorability: Favorability dimensions are the next question for those respondents familiar with a corporation: Overall Reputation; Perception of Management; Investment Potential. Evaluated on a four-point scale, these responses are combined into a single Favorability score Interbrand Model The brand valuation methodology of Interbrand searches to provide a rich and insightful analysis of a brand, providing a clear image of how a brand is contributing to business results today, together with a roadmap of activities to ensure that it is delivering even more tomorrow. It is pioneered in Strong brands affect customer choice and make loyalty; attract, retain and motivate talent, and lower the cost of financing, and our brand valuation methodology has been specifically designed to take these factors into account. The understanding purchase behaviour is the role of Brand analysis: the brand s influence on the generation of demand through choice. Brand Strength measures the potential of the brand to create continuity of demand into the future through loyalty and, therefore, to minimise the

32 risk. In this process, it ponders internal (management and employee) and external (customer) factors. Finally, these inputs are combined with a financial model of the company to measure the brand s ability to create economic value for its owner. The business applications can be evaluated in three categories: On-going brand management Strategy/ business case development Financial brand management applications These valuations bring collectively market, brand, competitor, and financial data into a single, value-based framework within which we verify the current performance of the brand, identify areas for improvement. These valuations also develop a roadmap of activities to decorate the future influence of the brand on business results. Brand Strength is a key diagnostic tool to measure brand performance and to understand the reasons behind a brand s strengths and weaknesses, both internally and externally. It supports strategic brand management by enabling the design of a long-term roadmap for the brand and the prioritization of activities with highest company impact. Finally, it approves for constructive dialogue between the responsible parts of an organization for building the brand. The brand valuation model also provides a framework to evaluate brand strategy options, such as positioning, architecture, and extension, and to make the business case for brand change. It is an ideal framework within which such business case modeling can be conducted. In an M&A context, brand is still a key driver of acquisition premiums. Frequently, it is the latent potential of the brand to drive this premium through its ability to enter new markets and extend into adjoint categories. A broad skill set is required to quantify the latent financial potential of the target brand. This set combines market research, brand, and business strategy, together with business case modeling.

33 Interbrand s brand valuation methodology can also be used to complement other more traditional techniques that are developed for setting royalty rates for brands. It can also advise on the proportion of brand value that should be paid out as a royalty rate in return for the right to exploit the brand, especially by identifying the value created by a brand for its business, combined with an evaluation of the relative bargaining power of the parties involved Aaker Model The Aaker Model is created by David A. Aaker who is a marketing professor at the University of California. It is a marketing model which sees brand equity as a combination of brand awareness, brand loyalty and brand associations. The brand equity is defined by Aaker as the set of brand assets and liabilities linked to the brand - its name and symbols - that add value to, or subtract value from a product or service. BRAND EQUITY = BRAND AWARENESS + BRAND LOYALTY + BRAND ASSOCIATION + PERCEIVED QUALITY

34 Source: Aaaker (1991) In the model of Aaker, brand management beginns with developing a brand identity. This identity is a unique set of brand associations representing what the brand stands for and offers to customers an aspiring brand image. He sees views brand identity as consisting of 8-12 elements which fall under four perspectives: Brand as Product: Consists of product scope, product attributes, quality or value of the product, uses, users and country of origin. Brand as Organisation: Consists of organizational attributes, local workings versus global activities.

35 Brand as Person: Consists of brand personality and consumer brand relationships. Brand as Symbol: Consists of audio and visual imagery, metaphorical symbols and brand heritage. Aaker has developed this model to help in creating a brand strategy consisting of different brand elements or patterns, to clarify, enrich and differentiate a brand from its competitors. An organization carefully uses several of these factors to communicate to the consumers what their brand stands for Keller Model The model has 4 stages: 1. Salience: The identity of the brand is established on this level of the pyramid. Keller councels a single building block for this period and appointees it brand salience. To obtain this level, the following elements play an important role: brand awareness, knowing the customers-their needs, wants, segmentation, USP of the brand. 2. Performance and Imagery: The second level of the pyramid concetrates on giving meaning to the brand and here Keller introduces two building blocks: brand performance and brand imagery. Brand performance is the way the product or service attempts to meet the consumer s functional needs. Brand performance also has a cardinal impact on how consumers experience a brand as well as what the brand owner and others say about the brand. Delivering into the meeting and the exceeding of a product or a service, consumer needs and wants a prerequisite

36 for successful brand building. In this connection, Keller identifies five areas to communicate the brand performance: primary ingredients and supplementary features; product reliability, durability and serviceability; service effectiveness, efficiency and empathy; style and design; and price. The tobic of rand imagery is the meeting of customers psychological and social needs. Brand imagery is the immaterial view of a brand. Because, the consumers pick up it to fit their demographic profile (such as age or income) or to have any psychological appeal in that it matches their prospect on life (conservative, traditional, liberal, creative etc.). Brand imagery is also designed by associations of usage (at work or home) or via private traits (honest, lively, competent, rugged, etc). 3. Judgement and Feeling: Judgements about a brand are found out from a consumer pulling together different performance and imagery associations. These judgements join into a consumer s opinion of a brand if there are multiple judgments that an individual can render. Judgements can be rendered about: Quality: Factual and perceived, Creditability: The degree to which the brand is perceived as having expertise, being reliable and acceptable. Consideration: The relevance of a brand to the consumer must be high so that they are likely to purchase or use it. Superiority: Specialisation in brand. Brand should leave a positive feel to the customers: Warmth, Excitement, Security, Social approval and self- respect. 4. Resonance: Resonance is a characterization of the engagement of customers with the brand so that it is known by the intensity of the psychological bond. The development of the bond or the increase of the number of interactions is a challenge for the brand manager and strategist (repeat purchases of a product or service). Through the development of marketing programmes

37 to the full satisfaction of all the customers needs, it provides them with a sense of community built around the brand and even empowers them to act as brand champions. To obtain this final stage a brand needs: behavioural loyalty, attitudinal attachment, sense of community, active engagement.

38

39

40 Source: Sally Samih Baalbaki, BBA, MBA (2012) 2.3. Corporate Reputation Fombrun and Van Riel (1997) reviewed how several disciplines (economics, strategy, marketing, organizational theory, sociology, and accounting) have defined and conceptualized reputation. They define the reputation in the American Heritage Dictionary as the general estimation in which one is held by the public and concluded that a definition developed by Fombrun and Rindova (1996) captured the characteristics of reputation found in the literature: A corporate reputation that describes the firm s capacity to deliver valued outcomes to multiple stakeholders is a collective representation of a firm s past actions. It measures a firm s relative standing both internally with employees and externally with its stakeholders, in both its competitive and institutional periphery. (Fombrun & Van Riel, 1997)

41 In his book on corporate reputation, Fombrun (1996) defines a corporate reputation as the overall estimation held by its constituents in a company. A corporate reputation is the representation of the "net" affective or emotional reaction good or bad, weak or strong of customers, investors, employees, and the community to the company s name. Alternatively, the definition of Gray/Ballmer focuses on the corporate reputation as a valuation of a company s attributes. The valuation is performed by the stakeholders, what would almost completely factor out affective parts. On the website of the Reputation Institute (n.d.a), Fombrun (the founder of the Institute) listed the three specifics of a reputation: A corporate reputation is a mental representation of a company s capacity to meet the expectations of its stakeholders. A corporate reputation specifies the rational and emotional attachments that stakeholders form with a company. A corporate reputation characterizes the net image a company develops with all its stakeholders. (Reputation Institute, n.d.a) In a white paper on Total Reputation Management, Entegra Corporation (n.d.) (a risk, crisis, and issues management company) submited an even broader perspective in its definition than Fombrun: Reputation, by definition, is an immaterial asset that embraces reflections of the past and expectations of the future, reflections and expectations about a firm s actions, activities, products and services. Concepts such as corporate image, goodwill, and brand equity is characterized by reputation. It is an instrument to compilacate the perspectives keeped by all the firm s stakeholders investors, clients, customers, employees, suppliers, partners, vendors, the media, financial analysts, special interest groups, politicians, labor unions, shareholder activists and regulators.

42 If the key components of these definitions are isolated, then the reputations contain both cognitions ( cognitive representations, net images, reflections of the past ) and attitudes (i.e., evaluations or valences such as affective or emotional reaction, attachments, attractiveness, prestige, and status ). At the same time, the definitions allow only one reputation for an organization rather than acknowledging that an organization might have different reputations among different stakeholders. Therefore, a reputation consists of a composite of all of the cognitions and attitudes of all stakeholders. This definition is a single compound concept and consequent with measures of reputation such as those of Fortune magazine and Fombrun s own measure, Reputation Quotient, developed with the support of the Weber Shandwick Worldwide public relations firm (Genasi, 2001) and the Harris Interactive research firm (Harris Interactive Reputation Quotient, 2001). These measures average the rankings of corporations by several stakeholders or by a sample of the general population on a number of criteria like products and services, financial performance, workplace environment, social responsibility, vision and leadership, and emotional appeal 4 (Harris Interactive Reputation Quotient, 2001, The RQ Ratings Phase, para. 1). These ratings, then, are averaged into a single Reputation Quotient (Genasi, 2001, p. 30). Jeffries-Fox Associates (2000a) identified similar components of reputation in their content analysis of literature on corporate reputation. They found four components in more than 50% of the articles in which corporate reputation was mentioned: marketing, products and services, management, and personality. Two other secondary components were mentioned in 30% to 49% of the articles: financial performance and customer service. Bromley (1993) said that reputations might consist solely of cognitive representations but that they might also include evaluations (attitudes): The collective view of an entity can be strongly evaluative or ambivalent or neutral. Later, however, he said that reputations differ from images because they contain evaluations: The concepts of reputation and public image

43 are virtually identical except that reputation implies an evaluation whereas public image is a fairly neutral term (p. 6). Nevertheless, Bromley s discussion suggests that reputations are cognitive representations that might include evaluations but do not always do so, which is different from Fombrun s (Reputation Institute, n.d.a) assertion that reputation must include both cognitive representations and emotional or rational attachments (an indicator that the cognition includes an attitude). Bromley (1993) next suggested that cognitive representations reputations should not be measured by averaging the responses of all members of a collectivity to provide a single composite measure. Rather, he emphasized the extent and distribution of these opinions (p. 3) and suggested that the range of opinions that make up a reputation be represented in tables and figures as a frequency distribution (p. 16). Such a measure of reputation would show cognitive structures ranging from those held by a large number of people in a collectivity to those held by only a few. Bromley (1993) also distinguished between what he called primary and secondary reputations reputations that are based on direct experience versus those based on hearsay. This distinction captures the difference between the words reputation and reputational. The word reputational is an adjective that can be used to describe measures of cognitions, attitudes, or even reputations and relationships (all nouns) that are not based on direct experience. Thus, we might call a second-order cognition a reputational reputation and a first-order cognition an experiential reputation. Bromley provided evidence that second-order reputations are likely to be more superficial than first-order reputations. Reflecting on the results of a study of the reputation of professors among their students, Bromley said: As far as reputation in general is concerned, statements about people we are not well acquainted with, and with whom we are not closely involved, are likely to be somewhat superficial. Clichés, stereotypes, and hackneyed phrases are likely to be used.

44 Based on these insights from Bromley, we define the reputation of an organization as the apportionment of mental representations that members of a collectivity keep about an association, representations that may, but do not always, include evaluative parts. The reputations may be based first on experience, second on what others say about the company or on a combination of the two. Perhaps the second-basis reputations are likely to be more cursory than first-basis reputations. This definition, in contrast to most of the others we have reviewed, is short, concise, and measurable. To measure reputation as defined in this way, however, it is necessary to look more closely at how cognitive and social psychologists conceptualize cognitive representations and attitudes. In Turkey, Turkey s reputation index measures the reputation of prominent companies. The results are reliable and rich for testing the reputation for the academicians. The companies are scored according to 8 major criteria. Sincereness Ambassy Loyalty Satisfaction Relationship Trust Liking Recognition We will use GFK Repman Reputation Quotient in our research, since this model is the one that best describes the reputation in the literature.

45 Definition and Related Concepts of Corporate Reputation Today s business environment is highly competitive, dynamic and turbulent. For this reason, companies look for ways to differentiate their proposals and to build favorable relationships with a company s stakeholder groups. Reputation is an important instrument for companies. Thereby they can obtain a predominant competitive advantage to persist a long-term relationship with multiple stakeholder groups (Boyd et al, 2010). It is the most useful immaterial asset that helps carry the organization in its lifetime. A successful corporate reputation can save an organization at times of crises. Nevertheless, only a harmful incident is enough to damage a reputation, quote Warren Buffet: It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you ll do things differently. Because, the building of a reputation is more difficult than its destruction. Studying corporate reputation has been never such important than today. This is based on the following factors: elevated public attention about corporate actions and issues, expanded requirement for transparency, better expectancies by multiple stakeholder groups, online communication, consumer s personal experience with a corporation s services and products, participation of opinion leaders, increase in interest groups and elevated interest from media have all participate to the importance of assessing and actively managing a company s reputation. In the past, a passive approach was applied by the companies to guide corporate reputation. Againt the crisis, they built a task force to solve the crisis as quickly as possible and to minimize its negative effects on the organization. But, it was not enough precaution to manage and to save reputation. This strategy was determined as insupportable in today s environment. Unless companies are active to manage their reputation, they will not be able to save their assets and meet their needs. There are many companies like Enron, that failed to survive because of the absence

46 of reputation management. Management of reputation is vital for companies especially when they are faced with a crisis. Much of academic researchers have focussed on the corporate reputation since two decades. (Logsdon and Wood 2002). The emphasis of both scholars and practitioners on the value of the reputation is increased more and more in recent years (Fombrun and Van Riel 2004; Bromley 2002; Chun, 2005; Hillenbrand and Money, 2006; Helm, 2007; Chettamronchai, 2010). Barnett et al. (2006) followed the calls to reach a consistent definition of corporate reputation and they categorized the definitions into three main clusters: awareness, assessment and asset. The term "perceptions" is most commonly used for the definitions based on the awareness. Therefore, in this cluster, corporate reputation is defined as an aggregation of perceptions with all aspects. The second cluster sees the corporate reputation mostly as an assessment of the situation of a company. The elements like judgment, estimate, evaluation, gauge, opinions or beliefs are the other influencing factors in the definitions based an assessment because they reflect the subjective nature of reputation. The third cluster concentrates on the value and significance of a company in the definitions based on the intangible, financial or economic asset. Walker (2010) classified the definitions of the corporate reputation into 5 clusters as perceptual, aggregate, comparative, positive or negative and temporal. Perceptual definitions focus on the internal and external aspects of an organization. Aggregate definitions concentrate on the sum of the perceptions of all stakeholder groups about an organization. Comparative definitions compare the reputation of the company to others in the market. Positive or negative definitions mention the positive or negative developments for reputation. Temporal definitions argue that reputations are time-specific and can change over time (Gray and Balmer 1998, Mahon 2002, Rhee and Haunschild 2006).

47 Fombrun (1996) sees the corporate reputation as an identity based on internal stakeholder s perception about a corporation and as an image based on the branding and communication activities to the external stakeholder groups.

48 Due to its interdependency on the factors such as personality, industry, competition, country and the other environmental factors, we also account the external and internal factors when studying reputation. Because the reputation of a company can be influenced by all factors inside and outside. Source: Gotsi and Wilson (2001) Corporate Culture (Investopedia) Corporate culture is the sum of behavioral culture and perception and determines the border of interactive and commercial transactions for company's employees and management. Development of corporate culture is a process originated from the cumulative characteristics of the people the company hires. This means that corporate culture will be reflected in all areas of the company, from purchasing to recruitment and staffing.

49 The term "corporate culture" came in view first in the 1960s, was developed in the early 1980s and has been used widely since 1990s especially by managers and researchers to describe the character of a company in all areas. Howevver, every corporate culture reflects the character of the environment, the size of the company, national traditions, international sectoral rules. The best example of this is the conservative traditions of the Japanese and the individualism-oriented approaches of the Americans of the 1960s. There are also many companies influenced by multidimensional cultures, especially parallel the globalization and the increased international interaction. This mixed culture refers to the interaction of people from different backgrounds in the business world. This process is a heavy integration process for the people, including a cultural adaptation from one culture to another. This transformation consists many difficulties for the companies. To facilitate this transformation and a more cohesive and productive corporate culture, companies look for resources including specialized training programs Corporate Identity Corporate identity can be sonsidered as perceptions of stakeholders about a company (Albert and Whetten 1985). Who are we as an organization? This question is the cornerstone of integration based on we-identity (Brown et al. 2006). Every company has an identity that distinguishes itself from the others (Bromley 2001). Following are listed some of the different definitions of corporate identity in the academic area. The construed external image of the firm. What a member believes outsiders think about the organization (Dutton, Dukerich, and Harquail, 1994). What members perceive, feel and think about their organization: A collective, commonlyshared understanding of the organizations distinctive values and characteristics (Hatch and Schultz, 1997)

50 The set of values and principles employees and managers associate with a company (Fombrun, 1996). What employees feel and think about their organization. It focuses on questions relating to organizational culture. It gives a business its distinctiveness (Balmer, 2001). A strategic manifestation of corporate-level vision and mission, underpinned by the strategies which a corporation employs in its operation or production (Melewar and Wooldridge, 2001) Corporate Personality Corporate personality is the legal personality of a company recognized by the state. Traditionally, because the companies are legal entity they could file a suit. By the way, a suit could be filed against them too. Despite this tradition, the definition of corporate personality has been impacted continuously by new factors such as public interest. In this historic process, for example, in nineteenth century's England, companies had had difficulties getting parliamentary approval for a grant of corporate status. Such legal requirements forced the companies to use the confidence mechanism and to build what was pointed as "deed of settlement" companies. During time, some of the complex legal entities were corrupted and used as tools of fraud. The UK government passed a series of Companies Acts to resolve the problems. By the end of the nineteenth century, incorporation was easy with limited liability. Consequently, the ownership of a company was transformed from an individual privilege to a legal right and responsibility. Because of their corporate identity, companies can buy, sell or lease property under their own name. In this regard, seize of a property from a company is also not possible without the required legal process.

51 Corporate Image The corporate image is the general appearance of a company and directly proportionate to perceptions of external stakeholders (Davies et al. 2001). Brown et al. (2006) see this as an interpreted image that covers all aspects of external stakeholders perceptions of the company. Corporate image asks here the following question: What does the organization believe others think of the organization? (Brown et al. 2006). The leaders of the company hold the associations that are to be planed to the important stakeholders and the interpreted image speak about these stakeholders. Corporate image asks here the following question: What does the organization want others to think about the organization? (Brown et al. 2006). Corporate image concentrates on the outside world's overall impression of the company including the views of customers, shareholders, the media, the general public (Hatch & Schultz, 2003). Fombrun and Shanley (1990) advise a series of different information signals from the company pointing effort, a reconciliation social rules, strategic positions all contribute to the corporate image. Following are listed some of the different definitions of corporate identity in the academic area: - View of the organization developed by its stakeholders; the outside world s overall impression of the company (Hatch and Schultz 2003). - Mental associations that organization members believe others outside the organization hold about the organization (Brown, Dacin, Pratt and Whetton 2006). - A short-term, or momentary, perspective of an organization at a particular point in time (Bick, Jacobson, and Abratt 2003). Bullmore (1984) emphasizes that image research concentrates initially on structural existence in the marketplace such as shops, brands, and companies. Advertisements are the cornerstone of transference of images from institution to consumer's mind (Bullmore, 1984).

52 Corporate Stakeholder A stakeholder or stakeholders, as defined in its first usage in a 1963 internal agenda at the Stanford Research Institute as "Those groups without whose support the organization would cease to exist." R. Edward Freeman improved and supported later this theory in the 1980s. Since this improvement and support, it has obtained a large acknowledgment in the business area, and it constituted the building block of theories relating to strategic leadership, institutional governance, business function and corporate social responsibility (CSR). A corporate stakeholder can influence the actions of a company totally or be influenced in the same way. This term has been further expanded to include anyone interested in this subject. Stakeholders: Interests of Stakeholder: Government All operations within the company. Employees Proportions of pay, job security, indemnity, respect, confident communication. Customers Value, quality, customer maintance, ethical products. Suppliers Service provider, product provider, equitable enterprise opportunities. Creditors Credibility, new contracts, liquidity. Community Jobs, involvement, protection against environmental factors, shares, confident communication. Trade Unions Quality, worker protection, jobs.

53 Owner(s) Profitability, longevity, market share, market standing, succession planning, raising capital, growth, social goals. Investors Return on investment, income Components of Corporate Reputation The corporate image is based on the corporate reputation formed by the corporate stance, symbolism, and communication, and affected by political, economic, social, technological and competitive factors. According to many definitions, corporate image and corporate identity have a common influence on the forming of corporate reputation. This approach overlaps with other suggestions that view reputation as a concourse of other corporate-based measures such as identity, image, brand, and communications. While Wartick (2002) sees the reputation as image plus Identity, Doorley and Garcia (2007) describe as the sum of images in other words performance plus behavior and plus communication. Barnett, Jermier, and Lafferty (2006) separate corporate reputation into its different constituent. The corporate identity is the start point for corporate reputation because of its reflection within the inner culture and values of the company. Corporate identity is the composition of symbols derived from inner values and beliefs. This guides to the formation of corporate images created through communication, brand, and visuals of the company. This bears consequence in the formation of impressions about the company. The formation of impression by observers reflects the corporate reputation, such as an immaterial asset which organizations try to achieve Value and Importance of Corporate Reputation Corporate reputation has been never so important than today. The upward trend in the contribution to the importance of management of corporate reputation proceeds from the highly turbulent business environment dependent on increased common expectations and pressure

54 from different stakeholder groups. Academicians have been researching corporate reputation with special importance for two decades. The attention to this important research topic has been proved by many conferences and academic studies as the Corporate Reputation Review Aim and Management of Corporate Reputation Reputation is a very important concept for a company. It is the perception of stakeholders about the company so it is very critical and should be managed properly. Reputation motivates employees, customers, investors, media, journalists and financial analysts about the investments and make the company attractive for them. Increases the market share and encourages M&A s. Decrease the cost of capital and attracts new investors. Supports PR activities and increase the power of content generated about the company. Factors increasing the importance of corporate reputation can be classified as external pressures, management philosophy and culture, moral and ethical values of the company, globalisation, client expectations, the need for transparency and social problems. Nakra, 2001:402). Schultz and Werner counted the aims of corporate reputation management as follows: Preserve the reputation in the market and the sector that the company operates. Develop and enhance trustable company name and reputation. Implement acceptable implications, politics, procedures, systems and standarts to prevent company suffer from reputation loss. Implement directions when there is something that can put company reputation in danger. Establish a management team that is responsible for all the actions needed to preserve the corporate reputation. Each person, company or organisation creates a reputation depending on the perceptions of people. It takes years to create reputation but second to broke it. (Alsop, 2004). So corporations need to manage their reputation continuously to enhance it and prevent the damage that can arose in difficult times.

55 Coporate reputation management is the control and direction process of external and internal stakeholders. (employees, customers, investors, shareholders, suppliers v.s.) (Karaköse, 2007). Today, all the companies aim to crate corporate reputation to take place in the minds of their stakeholders. The essence of corporate reputation is holistic approach, coherence, permanence and sustainability. In order to satisfy an effective corporate reputation, corporations need to determine the needs of its stakeholders about its positioning at first hand. (Kuyucu, 2003) Measurement of Corporate Reputation Major schools

56 The more complex the definition becomes, the more complex the measurement methods in the reputation literature. There are many measurement approaches reflecting the number of possible strategies that measure corporate reputation. Respondents can be required to guess the reputation of a company according to level (Goldberg and Hartwick 1990). However, the level of corporate reputation can be only explained by multidimensional measurement. The academicians can use a qualitative approachment or develop scales specific to the empirical condition (Durgee 1988; Hanby 1999), but here it will be not easy to compare one reputation with another or one stakeholder s view of a corporate reputation against another. Many measurement scales used to compare firms have been criticized because of their focus only on the financial performance of companies, opinions of single stakeholders (in other words image or identity), unidimensional measurement items. Their approaches adopted by academicians is originated from existing scales, from brand equity, measurement of corporate image or identity without any essential notional clarification. These approaches depend on their institutional structure (e.g. marketing, strategy, organization theory or consultant), their philosophy, but the academicians have seldom compared different methods of measurement (van Riel et al. 1998, 313) Reputation Quotient The Method of Harris-Fombrun gives an opportunity to measure the level of perception of the corporate reputation. This Corporate Reputation Quotient can be used by companies that gain advantage from understanding the perceptions of stakeholders versus competitors. By using 6 categories such as emotional appeal, products and services, vision and leadership, workplace environment, financial performance and social responsibility including 20 individual factors, the Corporate Reputation Quotient can build a perception related to the

57 reputation of a company for stakeholders. By using surveys, questions are established for all the 20 factors in the 6 categories to measure the corporate reputation with its all dimensions Emotional Appeal Emotional Appeal consists of the emotional factors which show the feeling of the stakeholders about the company. Items: good feeling about the company, admire and respect the company, trust the company Product and Services Products and Services consist of factors based on the measurement of the value that stakeholders perceive they get from the products and/or services. Items: stands behind products/services, offers high-quality products/services, develops innovative products/services, offers products/services that are good value Vision and Leadership Vision and Leadership consist of factors affecting the feeling of stakeholders regarding to the organization's vision for the future and role/behaviour of leaders. Items: has excellent leadership, has a clear vision for the future, recognizes/takes advantage of market opportunities Workplace Environment Workplace Environment consists of factors affecting the feeling of stakeholders regarding to that the management is doing a good job and that the company would be a good place to work for. Items: is well managed, looks like a good company to work for, looks like it has good employees Financial Performance Financial Performance includes factors affecting the assessment of stakeholders on the monetary strength of the company. Items: record of profitability, looks like a low risk investment, strong prospects for future growth.

58 Social Responsibility Social Responsibility consists of factors which measure the stakeholder opinion of how the company complies with its responsibility to the environment and society in which it operates. Items: supports good causes, environmentally responsible, treats people well Corporate Reputation Scale of Fortune Magazine Since 1997, the Hay Group department of Korn Ferry has a partnership with FORTUNE magazine to identify and rank the World's Most Admired Companies. The study also shows how they win their powerful reputations. The FORTUNE World s Most Admired Companies study researches top managers from eligible companies to identify the companies that enjoy the most powerful reputations within their industries and across industries. FORTUNE uses the Fortune 1000 listing and the Global 500 listing to dictate the industry groupings. The number of companies within an industry is a minimum of 6 companies and a maximum of 15 of companies, and each company has to have approximately $10 billion in revenue and to rank among the largest by revenue within their industry. Fortune s AMAC study occurs annually and focusses on the CEOs and on their views about Fortune 500 companies (from 1984) and Fortune 1000 companies (from 1995). Respondents are required to rank the competitor s reputation in terms of eight key attributes of reputation: (1) Financial stability; (2) Long-term investment power; (3) Use of corporate opportunities; (4) Innovativeness; (5) Quality of the corporate management; (6) Quality of its products and services; (7) Capacity to attract, develop and keep talented people; and (8) Acknowledgement of social responsibility (Fortune 2000) Corporate Reputation Scale of Capital Magazine Every year Capital Turkey, monthly magazine choses the most admired compaies of Turkey since Criterias are as such:

59 -IT investments -Service and product quality -Financial power -Innovation -Quality management -Social benefits and rights -Salary Policies -Organisational Development -Marketing and Sales -Communication & PR -Quality employee -Ethic competition -Employee satisfaction -Client Satisfaction -Transparency of Management -Creating value for shareholders -Resposible for society -Integration to international markets -Added financial and human capital to country Rep Trak Model Country RepTrak gauges the reputation of 55 countries based on levels of trust, esteem, admiration, and respect through a virtual panel of more than 48,000 people representing the G8 countries. The Study gauges a country s perceptions regarding to 16 attributes: safety, tourist features, hospitality, progressive social and economic policies, good and effective governability, and more. Reputation Institute s Global RepTrak 100 discovers the most credible companies, the most effective governance, the most worthful citizenship and more in the world Corporate Personality Scale In company law, the concept of 'separate legal personality' or 'corporate personality' shows that a company is different from its shareholders. For example, not the shareholders, but only the company has a binding force. This liability has a legal character but not a physical sanction mechanism. It is neither an agent nor a trustee for its shareholders. A company obtains this power and legal personality first upon legal incorporation.

60 Upon incorporation, the company attains a unique identity with rights and responsibilities their borders are legal determined. It gets a certificate of incorporation with a registration number to distinguish it from other corporate entitieswith this certificate of birth can a company act like a lifeless creature dependent upon the support of others for its functional and operational existence. There is a board of directors at the nerve center of the company to guard its best interests always and to manage its operations and functions day-to-day and to strive towards profit maximisation as one of its major objectives. However, it has also a soul reflecting social responsibility and purpose. This aspect raises social consciousness and gives a reputation the company as a part of the community. There are some shareholders within the company who can be pointed as its heart and soul. They are the final authority within the company. The capital and funds from the shareholders are the lifeline of a company. The development or liquidation of a company depends on this financial power. A company also needs pioneers to realize its mission and vision. The employees and officers are the pioneers of a company. They have the same effect on the company as the directors and shareholders. The reputation of the company can be preserved and enhanced by the common effort of these pioneers invested by the company Delahaye Corporate Reputation Index ( ) Delahaye index, ranks the first 100 companies operating in US according to an evaluations made of positive and negative reputation components regarding their news on prominent national media channels. (New York Times, The Wall Street Journal, Fortune Magazine, ABC World News Tonight and Bloomberg TV) The corporate reputation components that are subject to evaluation are as follows: Relations with shareholders, financial management and organisational power.

61 GFK Rep-Man Corporate Reputation Scale There are several scales of measurements which are used to measure corporate reputation. The scale developed by Fombrun et al. (2000) is the most famous one of them. In this study, it is used 6 dimensions and 20 attributes of this scale. The dimensions of this scale are the emotional appeal, products and services, vision and leadership, workplace environment, social responsibility and financial performance. GFK Research company is using this model in their researches for years. Their scale is very well known and reputable. They develop their scale in accordance with the the Harris- Formbrun Reputation Quotient Model. In this thesis dissertation, we will use GFK RemMan Scale to collect the qualitative data. 2.4 Firm Value The contribution of reputation to the financial value of the companies is research object of Corporate Boards, CEOs, CFOs, consultants, investors, and academicians. But the findings of the studies on the corporate reputation are paradoxical each other. This dissertation aims to minimize the paradoxes and to obtain an optimal point in measuring the contribution to the financial value of companies. There are lots of methods to confirm the value of a firm. But in Turkey data of the firm are not open to public. It is not very easy to reach the current data of companies. For that reason we will use Book to Market Ratio in our analysis instead of firm value. Below you will find the description of firm value and major calculation methods Definition of a Firm Value Enterprise value (EV), total enterprise value (TEV), or firm value (FV) is an instrument representing the market value of a business. It is an answer to all claims by all claimants: creditors (secured and unsecured) and shareholders (preferred and common). EV is one of the

62 basic units in the measurement of business valuation, financial modeling, accounting, portfolio analysis, and risk analysis Major Approaches and Methods of Measurement of Firm Value: Implications and Their Limitations There are three basic units to determine the worth of a business: Asset Approach: This approach sees the business as a sum of assets and liabilities used in the building of the picture of business value. It is based on the cost to create another business like this one that has the same economic advantages for its owners. The difference of value between assets and liabilities shows the value of the business. It sounds simple, but the challenge is hidden in the details: measuring and determining the effect of asset and liability on the reputation of the company. The unregistered assets of companies are the best example of this. Sometimes the value of unregistered assets may be greater than the registered. There are also some liabilities that are met by the businesses without any payment, which do not put an additional financial burden on the company. The calculation of two unregistered quantities shows the difficulty of measuring the reputation of a company based on the asset approach. Market Approach: The fair market value of the business is based on the intuitive approach of buyers and sellers on the transaction. Both parties act in full knowledge of all the relevant factors. There is no compulsion to conclude the sale. So this approach is one of the ways to determine the fair market value of a company. Income Approach: The income approach focusses on the basic aim making money. We can see this as the beneficial reflection of the investment of time, money and effort into business ownership. Investments of today are for the future expectation of economic benefit. But these investments can be understood as a risk in the future. The income approach uses two ways to explain this second understanding:

63 a. Capitalization: In its simplest form, the capitalization method essentially divides the business predicted earnings by the so-called capitalization percentage. The concept is that the business value is defined by the business earnings and the capitalization percentage is used to relate the two. For example, if the capitalization proportion is 33%, then the business is worth about 3 times its annual earnings. An alternative is a capitalization factor that is used to multiply the income. Either way, the result is the daily business value. b. Discounting: The function of the discounting method is a bit differently: first, you conceptualize the project of the business income stream over some future period of time, usually measured in years. Next, you determine the discount percentage depended on the risk of getting this income on time. Last, you calculate the position of the business at the end of the projection period. This is called the permanent or periodic business value. Finally, this calculation gives you the so-called actual value of the business. The biggest difference between both methods is based on the process of incoming input. While capitalization uses a single income measure such as the average of the earnings over several years, the discounting is done on a set of income values, one for each year in the projection period. If your business returns smooth, steady profits year to year, the capitalization method is a good option. For a growing business with rapidly changing and less predictable profits, discounting can offer the most exact results Book to Market Ratio The book-to-market ratio is a financial ratio based on the comparison between the book value of a firm and its market value. While book value is determined at the firm's historical cost, market value is calculated in the stock market through its market capitalization. Formula: Book Value of Firm/ Market Value of Firm (number of shares x share price)

64 Market value is the price that shareholders ready to pay or the shares of the company publicly traded. Book value is the result of comparing the total assets with the total liabilities of the company at a time at the balance. It also shows the ratio of intellectual capital that the company owns. This method is only applicable to the companies open to public in any stock exchange since the other companies do not have share prices and because of that advantage, is the easiest way to calculate and compare the values of firms. On the other hand, as a limitation, it is vulnerable to speculations in stock exchange, external factors and book value is always lower than expected because this ratio cannot take depreciations into account Tobin s Q Ratio Tobin's Q Ratio shows the ratio between a physical asset's market value and its replacement value. James Tobin and William Brainard presented it first in Tobin's q = It is also usual practice to assume equivalence of the liabilities market and book value, yielding: Tobin's q = The market value of equity is often valorized in financial databases for stock listed companies. Tobin's q would be 1.0 for the market value based only on the registered assets of a company. If Tobin's q is greater than 1.0, then the market value is greater than the value of the company's recorded assets. This shows that the market value reflects some company's assets off the books. If Tobin's q values high, this result encourages companies to invest more in the capital because of their capacity to pay. For example, a company's stock price (which is a measure of the company's capital market value) is $2 and the price of the capital in the current market is $1. On that condition, the company can issue shares and invest with the proceeds in the capital. In this case q>1.

65 On the other hand, if Tobin's q is less than 1, the market value is less than the recorded value of the assets of the company. This shows that the market may be decreasing one's value of the company. Tobin s Q Ratio is one of the tools to measure intellectual capital of the companies. This ratio is also used to measure the capital invested in technology and human by a company. (Stewart, 1997). It is very similar to Book to Market Ratio but the difference lies in the replacement cost that is used instead of book value. Book to Market Ratio and Tobin s Q Ratio are applicable ways of comparing the values of firms operating in the same industry. But as mentioned before these two ratios are vulnerable to the fluctuations and speculations of stock exchange and it will effect negatively to get the correct results by these ratios. Since the replacement cost is not very easy to calculate in Turkey because of limited data reach, I used book to market ratio to compare the values of firms under my investigation Summary of Retail Sector Literature and Large Stores in Borsa Istanbul Definition of Retailing Some manufacturers also act as a reseller in this distribution channel. Sometimes it is possible for consumers to buy directly from the manufacturer. Online sales sites such as ebay allow this. This consumer purchase cannot be classified as a retail purchase. This distinction can get confusing, but the dividing line is whether the one selling to consumers is classified a private or business selling. As a reseller, retailers offer the consumers the ability to purchase small quantities of a wide assortment of products at prices that are considered reasonably affordable. In parallel to this, they also offer the suppliers opportunities to reach their target market, build product demand through retail promotions, and provide consumer feedback to the product marketer.

66 Classification of Retailing There are lots of types of retailers. These retailers can be classified into the service types such as self, limited or full service. Major types of corporate retailers are corporate chain stores, voluntary chains, retailer cooperatives, franchises and merchandising conglomerates. Classification of Retailing Store Based Retailing Non-Store Based Retailing Service Retailing According to Form of Ownership According to Merchandise offered Direct selling Banks Independent Convenience Stores Direct Marketing Car Rentals Chain Supermarkets Mail order Service Contrats Franchise Hypermarkets Automated Vending Hospitals Lease Department Speciality Stores Telemarketing Consumer Cooperative Departmental Stores Airport Retailing Vertical Marketing System Off-Price Retailers Variety Stores Factory Outlets Membership Clubs Catalogue Showrooms Full Line Discount Stores Warehouse Stores Major Retailing Theories Below are some basic retailing theories: 1. Enviromental Theory: The theory is about the shift from transactional marketing to relationship marketing. This theory explains the ability to adopt the change. Retailers are economic entitities and as Darwin said to adopt the change the fittest will survive and retailers also alter to adopt the change in environment. 2. Cyclical Theory: There are two types of cyclical theory. The first one is The Wheel of Retailing theory represented by Wheel of Retailing Malcolm Nair (1958) and Stanley Hollander (1960). It is the most well-known theory and an instrument to understand retail changes. This instrument shows that retail innovators frequently first appear as low-price operators with a low-cost structure and low profit-margin necessities, offering some real profits, such as specific merchandise, which enables them to take customers away from more professional competitors.

67 The second one is retail accordion presented by Hollader (1966). The theory explains the retail cycle that begins with broad-based outlets with wide assortments and ends with narrow-based organizations with specialized assortments. It backs again to broad-based assortments. Synonymous with general-specific-general theory. 3.Conflict Theory: There is always a conflict between operators of similar formats or within broad retail categories. The facts show that retail innovation does not sufficiently reduce the number of formats available to the consumer. Vice versa, it leads to the composition of more formats, especially, based on the blending of two opposites to create a new format. These developments in retailing can be explained as follows: A. Thesis- Individual retailers as small shops at all corners of the country B. Antithesis- The department stores developed over a period. C. Synthesis- Supermarkets and hypermarkets are the reflections of the mixture of thesis and antithesis called as "synthesis" that becomes the "thesis" for the next round of development. 4. Retail Life Cycle (Davidson, Bate, Bass 76): As explained in the retail life cycle theory, a retail institutionalization process can be graded as an introduction (early growth), growth (accelerated development), maturity, and decline. 5. Big Middle: There also is a marketplace where the largest number of potential competitive customers reside Large Store Classification in Borsa Istanbul Borsa Istanbul is classifying the companies listed according to different sector classifications. One of these classifications was Large Store classification and there were the companies listed in the below table under this classification. ISE CODE: : BÜYÜK MAĞAZALAR

68 BÜYÜK MAĞAZALAR / LARGE STORES Kod Şirket Adı 1 ADESE ADESE ALIŞVERİŞ TİCARET 2 BIMAS BİM MAĞAZALAR 3 BMEKS BİMEKS 4 BOYNR BOYNER MAĞAZACILIK 5 CRFSA CARREFOURSA 6 KILER KİLER GIDA 7 MGROS MİGROS TİCARET 8 TKNSA TEKNOSA İÇ VE DIŞ TİCARET 9 KIPA TESCO KİPA 10 UYUM UYUM GIDA My study was conducted to the users and non-users of these large stores which are operating in Turkey and which started operation after At the time I write this literature review (June, 2016) I relaised that Kiler Gıda closed to public at year end 2015 but since I will use 2015 values of these companies I also took Kiler Gıda s data into my calculations.

69 3. THE RESEARCH DESIGN AND METHODOLOGY In this part of the study, issues related to the research design and methodologies are presented. These cover the issues referring to the sampling, research variables, data collection and secondary data. The pilot study conducted with the objective of understanding whether the questions are suitable and easily understandable for the respondents will also be introduced The Consumer Research Research Objective The objective of this research is to measure whether brand equity dimensions have any effect on firm value by moderating the perceived reputation dimensions of the companies. By this aim, a model is formed and an exploratory research was conducted to show relationship between these three concepts by measuring the corporate reputation and brand equity perceptions of users and non-users of 10 corporations in Turkey that are listed as Large Stores under the Nace classification of Istanbul Stock Exchange (ISE). These retail companies were chosen since they are open to public and secondary data can be obtained easily and this sector has chosen to see the differences between users and nonusers of these retail brands. Most of the academic research about brand equity consists student samples so chosing retail companies popular and widely used in Turkey increased the responses and added value to the literature. This dissertation is also first of its kind built upon previous research on the determined dimensions of brand equity and corporate reputation. This is the first thesis that researches the impact of brand equity dimensions on firm value by the moderating the corporate reputation dimensions (i.e., based on either the Aaker 1991 or Keller 1993 theoretical models). In order to develop a joint model for both measuring the brand equity and corporate reputation effects of firm value Yoo Dontu brand equity scale and GFK Repman Reputation Index were used to develop a questionnairre.

70 The best way to be able to understand whether the scale is suitable for our research was to conduct a pilot study. The Pilot Survey was conducted on 5 th of April, 2016 and necessary corrections were made. The survey was conducted to 50 respondents. It has seen that the survey lasts minimum 12 and maximum 19 minutes so it can be trated as ideal. Another correction was also noticed. Survey participants can easily answer the questions if they shop from that retail store but for the firms they do not purchase anything thy tend to give the no comment answer. So some negligible changes were made in the sentence of one of the questions. After the consent of thesis advisor, the field phase of qualitative research was started and survey data were collected between 18 th of April and 30 th of May. In order to measure the firm value, one year secondary data (May 2015-May 2016 YoY) of the Borsa İstanbul listed Large Store companies were collected. The results, together with firm values of these companies which are the secondary data (Book to Market Ratio) were tested with structural equation modeling by using AMOSv20 and R programmes. To the best of our knowledge, there is not any academic research globally and in Turkey that measures the relationship between these 3 concepts. According to the results of analysis, brand equity dimensions have statistically and scientifically meaningful effect on perceived reputation dimensions and on firm values of the companies Research Problem The in this thesis presented main research problem is Do the brand equity dimensions have any effect on firm value by moderating the perceived reputation dimensions of the companies? The users and non-users of 10 retail firms in Turkey have been chosen as respondents to see the difference in the perceptions of the users and non-users.

71 The secondary research questions are the impacts of brand equity and corporate reputation dimensions on firm value. These are: The effect of brand loyalty on firm value. The impact of perceived brand quality on firm value. The effect of brand associations on firm value. The impact of brand awareness on firm value. The impact of emotional appeal on firm value. The impact of products and services on firm value. The impact of vision and leadership on firm value. The impact of workplace environment on firm value. The impact of social responsibility on firm value. The impact of financial performance on firm value Research Model and Variables Forming the research model correctly is the most difficult part of all the researches. All brand equity and corporate reputation models were discussed in detail in section 2. Our research is aimed to reveal the perceptions of customers. So consumer based brand equity (CBBE) models found more suitable to measure brand equity for our research. There are also different studies to improve category or industry-specific measures of CBBE (e.g., de Chernatony et al., 2004; Christodoulides et al., 2006). Yoo and Donthu (2001) as the most influential brand equity scales are multidimensional. They are based on the four components of customer-based brand equity developed by Aaker s (1991) and Keller (1993). This scale is more suitable for our research and we will use this one. They define four dimension of overall brand equity as brand awareness, brand loyalty, brand associations and perceived quality. These dimensions were explained in detail at section

72 There are several measurements and scales that are used to measure corporate reputation. Most famous one is Reputation Quotient. At this thesis 6 dimensions and 20 attributes scale of the Harris-Fombrun Reputation Quotient will be used. GFK Research company translated this scale into Turkish and I will use this translation version. The dimensions of this scale are emotional appeal, products and services, vision and leadership, workplace environment, social responsibility and financial performance. These dimensions were explained in detail at section Initial Model Overall Brand Equity Brand loyalty Perceived Quality Brand Associations Brand Awareness Firm Value Overall Corporate Reputation Emotional Appeal Products and Services Vision and Leadership Workplace Environment Social Responsibility Financial Performance Dependent variable: Firm value (For Book to market ratios (Described in the section ), one year secondary data (May 2015-May 2016 YoY) of the Borsa İstanbul listed Large Store companies were collected.) Independent variables: Brand equity dimensions and corporate reputation dimensions Demographic variables: a) Gender: Male, Female b) Age: Generation Z (12-20) Generation Y (21-35)

73 Generation X (36-50) Baby Boomers (51-70) c) Education: Secondary School and below Lycee University graduate and above d) Income level (TL): and above e) Work Status: Not working Paid worker Retired Enterpreneur Yoo Donthu Brand Equity Scale (2001) Brand loyalty - I see myself as loyal to X. - My first option would be X. - I would not prefer other brands if X is present at the store. Perceived quality - The quality of X is perhaps very high. - The functionality of X is perhaps extremely high. Brand awareness - X shows an awareness among the other competing brands. - I see the awareness of X.

74 Brand associations - I can remember some characteristics of X quickly. - I can remember the symbol or logo of X quickly. - I can't imagine X quickly. (r) REPUTATION QUOTIENT SCALE: 6 dimensions and 20 attributes of the Harris-Fombrun Reputation Quotient a) Emotional Appeal Like: I like this company Admire: I admire and respect this company Trust: I trust this company b) Products & Services Quality: Offers high-quality products and services Stands Behind: Stands behind its products and services Innovative: Develops innovative products and services Good Value: Offers products and services that are a good value for the money c) Vision & Leadership Leadership: Has excellent leadership Clear Vision: Has a clear vision for its future Opportunities: Recognizes and takes advantage of market opportunities d) Workplace Environment Good to Work For: Looks like a good company to work for Good Employees: Looks like a company that would have good employees Well-Managed: Is well managed e) Social Responsibility Support Causes: Supports good causes

75 Environment: Is an environmentally responsible company Treats People: Maintains high standards in the way it treats people f) Financial Performance Profitability: Has a strong record of profitability Low Risk Investment: Looks like a low-risk investment Out-Performs: Tends to out-perform its competitors Growth Prospect: Looks like a company with strong prospects for future growth Sampling In this part of the study is discussed a methodology based on how the sampling plan has been prepared and applied Sampling Unit The sampling unit has been agreed as individual users and non-users of the 12 retail stores operating in Turkey which started their operation after 1982 and listed on Borsa Istanbul. These companies are Adese Alışveriş Ticaret, Bim Mağazalar, Bimeks, Boyner Mağazacılık, Carrefoursa, Kiler Gıda, Migros Ticaret, Teknosa İç ve Dış Ticaret, Tesco Kipa and Uyum Gıda Sampling Method The sampling method of convenience sampling has been used in this study. In total 616 questionnairre have been covered in the survey. The respondents filled out the questionnaires at several different locations in İstanbul and in Ankara Sample Size It is a canon to have a minimum number of observations as many as five times of the number of variables because of the possibility of five different responses for each question asking about a variable (Hair et al., 2006). Therefore, the sample size has been accepted as 616 observations.

76 At least 30 user and 30 non-user respondent were obtained inorder to make meaningful comparisons firmwise and sector wise. The toatl number of users and non-users are chosen to be equal. ISE CODE: : BÜYÜK MAĞAZALAR BÜYÜK MAĞAZALAR / LARGE STORES Kod Şirket Adı 1 ADESE ADESE ALIŞVERİŞ TİCARET 2 BIMAS BİM MAĞAZALAR 3 BMEKS BİMEKS 4 BOYNR BOYNER MAĞAZACILIK 5 CRFSA CARREFOURSA 6 KILER KİLER GIDA 7 MGROS MİGROS TİCARET 8 TKNSA TEKNOSA İÇ VE DIŞ TİCARET 9 KIPA TESCO KİPA 10 UYUM UYUM GIDA Data Collection Methods In this empirical study is used the data collection methods based on the responses to the questionnaire. The pilot survey has been conducted with 30 participants. The objective was to obtain unbiased, clear and understandable questionnaire form. The questionnaire was realized face to face. Especially the long questionnaires could be best handled by this method (Tull and Hawkins, 2002). Complex and confusing questions can only be clarified intensively by this method despite the more loss of time and effort. In each survey, a standard questionnaire is used to all respondents consisting the mostly closeended fixed alternative questions. The purpose of the study was kept confidential to all respondents. Because of this confidentiality, a questionnaire can be tabulated, analyzed and managed easily.

77 The trustworthiness of fixed-alternative questions depends on validity whether the alternative answers may not reflect the true. The respondents may be driven to different options among the alternatives. It may not include all the possible cases and this bias may lower validity. This is valid especially in cases when the respondent is not sure on the subject asked (Tull and Hawkins, 2002) Data Collection Instruments and Measuring Question User / Nonuser # Variables Sources For The Scale 1 Gender Generated by the researcher 2 Age Generated by the researcher 3 Education Generated by the researcher 4 work Status Generated by the researcher 5 Income Level Generated by the researcher (6-15) User-nonuser Selection Generated by the researcher 16 Firm-Used Selection Generated by the researcher Firm Non-used 17 Selection Generated by the researcher 18 Brand Awareness Yoo & Dontu (2001) Firm-used 19 Brand Awareness Yoo & Dontu (2001) Firm-used 20 Brand Associations Yoo & Dontu (2001) Firm-used 21 Brand Associations Yoo & Dontu (2001) Firm-used 22 Brand Associations Yoo & Dontu (2001) Firm-used 23 Perceived Quality Yoo & Dontu (2001) Firm-used 24 Perceived Quality Yoo & Dontu (2001) Firm-used 25 Perceived Quality Yoo & Dontu (2001) Firm-used 26 Brand Loyalty Yoo & Dontu (2001) Firm-used 27 Brand Loyalty Yoo & Dontu (2001) Firm-used 28 Brand Loyalty Yoo & Dontu (2001) Firm-used GFK Repman (Reputation 29 Product & Services Quotient) Firm-used GFK Repman (Reputation 30 Product & Services Quotient) Firm-used GFK Repman (Reputation 31 Product & Services Quotient) Firm-used GFK Repman (Reputation 32 Product & Services Quotient) Firm-used GFK Repman (Reputation 33 Vision & Leadership Quotient) Firm-used GFK Repman (Reputation 34 Vision & Leadership Quotient) Firm-used

78 GFK Repman (Reputation 35 Vision & Leadership Quotient) Firm-used GFK Repman (Reputation 36 Vision & Leadership Quotient) Firm-used GFK Repman (Reputation 37 Vision & Leadership Quotient) Firm-used GFK Repman (Reputation 38 Vision & Leadership Quotient) Firm-used GFK Repman (Reputation 39 Vision & Leadership Quotient) Firm-used GFK Repman (Reputation 40 Vision & Leadership Quotient) Firm-used GFK Repman (Reputation 41 Vision & Leadership Quotient) Firm-used GFK Repman (Reputation 42 Vision & Leadership Quotient) Firm-used GFK Repman (Reputation 43 Vision & Leadership Quotient) Firm-used Workplace GFK Repman (Reputation 44 Environment Quotient) Firm-used Workplace GFK Repman (Reputation 45 Environment Quotient) Firm-used Workplace GFK Repman (Reputation 46 Environment Quotient) Firm-used GFK Repman (Reputation 47 Financial Performance Quotient) Firm-used GFK Repman (Reputation 48 Financial Performance Quotient) Firm-used GFK Repman (Reputation 49 Financial Performance Quotient) Firm-used GFK Repman (Reputation 50 Social Responsibility Quotient) Firm-used GFK Repman (Reputation 51 Social Responsibility Quotient) Firm-used GFK Repman (Reputation 52 Social Responsibility Quotient) Firm-used GFK Repman (Reputation 53 Emotional Appeal Quotient) Firm-used GFK Repman (Reputation 54 Emotional Appeal Quotient) Firm-used GFK Repman (Reputation 55 Emotional Appeal Quotient) Firm-used GFK Repman (Reputation 56 Emotional Appeal Quotient) Firm-used 57 Brand Awareness Yoo & Dontu (2001) Firm-not used 58 Brand Awareness Yoo & Dontu (2001) Firm-not used 59 Brand Associations Yoo & Dontu (2001) Firm-not used 60 Brand Associations Yoo & Dontu (2001) Firm-not used

79 61 Brand Associations Yoo & Dontu (2001) Firm-not used 62 Perceived Quality Yoo & Dontu (2001) Firm-not used 63 Perceived Quality Yoo & Dontu (2001) Firm-not used 64 Perceived Quality Yoo & Dontu (2001) Firm-not used 65 Brand Loyalty Yoo & Dontu (2001) Firm-not used 66 Brand Loyalty Yoo & Dontu (2001) Firm-not used 67 Brand Loyalty Yoo & Dontu (2001) Firm-not used GFK Repman (Reputation 68 Product & Services Quotient) Firm-not used GFK Repman (Reputation 69 Product & Services Quotient) Firm-not used GFK Repman (Reputation 70 Product & Services Quotient) Firm-not used GFK Repman (Reputation 71 Product & Services Quotient) Firm-not used GFK Repman (Reputation 72 Vision & Leadership Quotient) Firm-not used GFK Repman (Reputation 73 Vision & Leadership Quotient) Firm-not used GFK Repman (Reputation 74 Vision & Leadership Quotient) Firm-not used GFK Repman (Reputation 75 Vision & Leadership Quotient) Firm-not used GFK Repman (Reputation 76 Vision & Leadership Quotient) Firm-not used GFK Repman (Reputation 77 Vision & Leadership Quotient) Firm-not used GFK Repman (Reputation 78 Vision & Leadership Quotient) Firm-not used GFK Repman (Reputation 79 Vision & Leadership Quotient) Firm-not used GFK Repman (Reputation 80 Vision & Leadership Quotient) Firm-not used GFK Repman (Reputation 81 Vision & Leadership Quotient) Firm-not used GFK Repman (Reputation 82 Vision & Leadership Quotient) Firm-not used Workplace GFK Repman (Reputation 83 Environment Quotient) Firm-not used Workplace GFK Repman (Reputation Environment Workplace Environment 86 Financial Performance 87 Financial Performance Quotient) GFK Repman (Reputation Quotient) GFK Repman (Reputation Quotient) GFK Repman (Reputation Quotient) Firm-not used Firm-not used Firm-not used Firm-not used

80 88 Financial Performance 89 Social Responsibility 90 Social Responsibility 91 Social Responsibility 92 Emotional Appeal 93 Emotional Appeal 94 Emotional Appeal 95 Emotional Appeal GFK Repman (Reputation Quotient) GFK Repman (Reputation Quotient) GFK Repman (Reputation Quotient) GFK Repman (Reputation Quotient) GFK Repman (Reputation Quotient) GFK Repman (Reputation Quotient) GFK Repman (Reputation Quotient) GFK Repman (Reputation Quotient) Firm-not used Firm-not used Firm-not used Firm-not used Firm-not used Firm-not used Firm-not used Firm-not used The final version of the questionnaire filled out by the respondents has been presented in appendix 4. and Data Analyses Procedures Following a temporary descriptive data analysis, the independent variables have been factorial analyzed, using the Principal Components Analysis (PCA) method and SPSS23 programme. The results are conveyed below. Despite testing of both brand equity and corporate reputation scales so many times in the literature before, factor analysis has confirmed the testification necessary whether the scale is convenient for our sample and the dimensions are the same. Then a Reliability Analysis has been realized for the factors obtained through the factor analysis. After the PCA, 2 different programmes were used in this thesis to test the moderating effect of corporate reputation and obtain the added values of each of the results to the literature. The main method of testing is structural equation modelling and it was thought to be measured by using AMOSv20 at the start of this analysis. But when the model was formed by AMOSv20, it has seen that the effect of moderation can not be measured by the help of this program. So another statistical programming language R was used.

81 R is an open source programming language supported by the R Foundation for Statistical Computing. It also is a software environment for statistical computing and graphics. This language is widely preferred among statisticians and data miners to develop statistical software and data analysis. It was developed at Bell Laboratories (formerly AT&T, now Lucent Technologies) by John Chambers and colleagues. Firm values of these companies which are the secondary data (Book to Market Ratio) were taken and calculated from the ISE Factor Analysis Factor analysis is a statistical paradigm to analyze correlation among many variables in terms of their common underlying dimensions (Hair, et.al. 2006, p.16). It was chosen for discovering the underlying dimensions of the various attributes proposed to brand equity and corporate reputation. The purpose was to examine this correlation between the independent variables and to focus on the original information into a smaller set of factors with respect to how the respondents sense them. Therefore, these factors, because of their score of explanatory power, could replace the original variables to explain the network of correlation influencing both brand equity and corporate reputation. Since there was an objective to minimize the number of factors explaining the maximum portion of the variance of the original variables, the principal component analysis was used. The purpose was to decline the interrelated independent variables into a small set of variables. They have not any correlation with each other, but they could later be integrated into other multivariate analysis (Hair et al., 2006; Malhotra, 2004). Factor analysis was done through the SPSS 23 programme. The basic components were turned, and the new factor scores obtained from the analysis were inserted into the SEM as independent variables.

82 The aim of this rotation, called as Varimax technique, was to remove multicollinearity among the factors. (Hair, et al., 2006) Structural Equation Modelling Structural equation modeling (SEM) includes a diverse set of mathematical models, computer algorithms, and statistical methods that fit networks of constructs to data. Use of SEM is commonly justified in the social sciences because of its ability to impute relationships between unobserved constructs (latent variables) from observable variables (wikipedia) 4. EMPIRICAL FINDINGS 4.1. Descriptive Statistics Firm Value (Book to Market Ratio) (2015 Average) Kod Şirket Adı 1 ADESE ADESE ALIŞVERİŞ TİCARET 2 BIMAS BİM MAĞAZALAR 3 BMEKS BİMEKS 4 BOYNR BOYNER MAĞAZACILIK 5 CRFSA CARREFOURSA 6 KILER KİLER GIDA 7 MGROS MİGROS TİCARET 8 TKNSA TEKNOSA İÇ VE DIŞ TİCARET 9 KIPA TESCO KİPA 10 UYUM UYUM GIDA Total Equity Capital Book to market 443,900,688 5,854,100, ,670,359,000 15,380,000, ,854, ,810, ,533,226 2,780,000, ,730,920 4,942,000, ,127, ,380, ,986,000 3,580,000, ,522, ,310, ,291,000 2,640,000, ,518, ,700, Demographic Factors In our research, the demographics of the respondents were determined very seriously. 48% of the respondents are female while 52% are male. The numbers are very much the same. It provides us an option to compare the results. In terms of the generations, Generation Y comes the first and the other generations are mostly Gen X and Gen Z. Below, you can see the results. Age: Generation Z (12-20): 21% Generation Y (21-35): 43%

83 Generation X (36-50): 29% Baby Boomers (51-70): 7% 73% of the respondents are graduated from lycee and above and 27% are secondary school or below. Education: Secondary School and below: 27% Lycee: 42% University graduate and above: 31% The survey respondents belong mostly to the mid or lower level classes of the society in terms of income generation which is in parallel with their education levels also. 74% of them are either not working or paid workers. Enterpreneurs are only the 21%. Income level (TL): : 42% : 37% : 7% 7501 and above: 5% Not prefer to answer: 9% Work Status: Not working: 37% Paid worker: 37% Retired: 5% Enterpreneur: 21% The number of users and non-users of these companies are very much the same to provide opportunity to compare their results.

84 Users: 308 Non-users: 308 In the questionnairre I asked all of the 616 respondents the other stores. Whether they purchased from the store before or not and if they do not purchase, whether they are aware of the store or not. The results of these 10 companies are as follows. We start with the highest brand recognition. BİM: 87,3% of all the respondents have puchased something from Bim before. The other 12,7% are also aware of Bim but did not purchase anything from the store before. Bim psitions itself at the mid or lower class of the society so it is in line with our samples demographics. MİGROS: 82,5% of all the respondents shops from Migros. The other 17,5% are also aware of Migros but did not purchase anything from there before. CARREFOUR: 81,2% of all the respondents purchased before from Carrefour. The other 18,8% are aware but not purchased before from Carrefour. TEKNOSA: 75% of all the respondents shops from Teknosa. The other 25% are also aware of Teknosa but did not purchase anything from there before. BOYNER: 63,3% of the respondents are aware and purchased before from Boyner before. 36,4% of the respondents are aware of Boyner but have not purchased anything so far. 0,3% is not aware of Boyner.

85 BİMEKS: 49,4% of the respondents are aware and purchased before from Bimeks store. 48,1% of the respondents are aware of Bimeks but have not purchased anything so far. 2,6% is not aware of Bimeks. KİPA: 48,7% of the respondents are aware and purchased before from Kipa store. 50,3% of the respondents are aware of Kipa but have not purchased anything so far. 1% is not aware of Kipa. KİLER: 58,4% of the respondents are aware and purchased before from Kiler store. 41,2% of the respondents are aware of Kiler but have not purchased anything so far. 0,3% is not aware of Kiler. UYUM: Only 22,7% of the respondents are aware and purchased before from Uyum Gıda. 51,9% of the respondents are aware of Uyum but have not purchased anything so far. It shows that people do not prefer Uyum since they know Uyum but they do not prefer to shop from there. 25,3% is not even aware of Uyum. ADESE: 59% of the respondents are not aware and not purchased before from Adese store. 28% of the respondents are aware of Adese but have not purchased anything so far. And only 13% have purchased from Adese before Factor Analysis Bartlett s test of sphericity is a statistic used in testing of the null hypothesis. According to this hypothesis, the variables have no correlation at all. In other words, this is an identity matrix, in which each variable is correlated with itself only (Malhotra, 2004, p.561). Kaiser-Meyer- Olkin (KMO) is a statistic to compare magnitudes of total or partial correlation coefficients. Small values of the KMO statistic show the difficulties of explain the correlations between pairs of variables. In that case, factor analysis is not usable because the required value for KMO statistic is greater than 0.5 (Malhotra, 2004 p.564).

86 Brand Equity Factor Analysis As illustrated in Table xx, the null hypothesis is rejected since Bartlett s test of sphericity is significant. Also, the KMO statistic value is greater than 0.5 so the factor analysis is usable. Eigenvalues over 1 was the criterion used in extracting the factors. The Varimax rotation was used to secure pure constructs underlying each factor. The rotation converged in 3 iterations.

87 I put 4 factors to the factor analysis to test whether our initial model assumptions are statistically valid or not. After the factor analysis of brand equity items; awareness and association items have converged. The new component is named as Awareness_associations. This factor can explain the 33% of the total variance. Perceived quality also come out as a second factor and it explains 24% of the total variance. And lastly the brand loyalty factor come out as explaining 24% of the total variance. Totally 81% of the total variance is explained by these factors. Corporate Reputation Factor Analysis As illustrated in Table xx, the null hypothesis is rejected since Bartlett s test of sphericity is significant. Also, the KMO statistic value is greater than 0.5 so the factor analysis is usable. Eigenvalues over 1 was the criterion used in extracting the factors. The Varimax rotation was used in order to secure pure constructs underlying each factor. The rotation converged in 3 iterations.

88

89 Similarly, I put 6 factors to the factor analysis to test whether our initial model assumptions are statistically valid or not. After the factor analysis of corporate reputation items; products&services and Vision&Leadership items have converged. The new component is named as ProductService_VisionLeadership. The 17% of the total variance can be explained by his factor. Financial performance also merged with Social Responsibility and named as FinancialPerformance_SocialResponsibility. This factor explains 15% of the total variance. And lastly the emotional appeal factor come out as explaining 31% of the total variance. Totally 63% of the total variance is explained by these factors.

90 Reliability Analysis Purpose of Reliability analysis is to check the consistency of a scale due to its repeated usage. When the number of items in a factor is above 2, then we use the coefficient Cronbach's Alpha and when the number of items is less than 2, then we use the coefficient "Pearson". Since the number of items are more than 2 for both brand equity and corporate reputations we use Cronbach's Alpha. Goodness-of-fit (GOF) statistics, based on the mathematical comparison of observed and estimated covariance matrices, comment the integration of reality (observation) to theory. Although none of GOF indexes carry all the properties of an ideal index the academicians used several GOF measures in the past (Bollen and Long, 1993). The Reliability Table for Brand Equity Cronbach alpha figure of 0,928 stated at the table below shows us that the overall brand equity variable is reliable. Reliability Statistics Cronbach's Alpha N of Items, The Reliability Table for Corporate Reputation Cronbach alpha figure of 0,968 stated at the table below shows us that the overall corporate reputation variable is reliable Structural Equation Modelling Results R Programming Results Modified Research Model with R Programming: Structural Equation Modelling shows us all the variables and their effects:

91 k18 k19 k20 k21 k22 k23 k24 k25 k26 k27 k28 BA PQU BLO Overal Brand Equity -0,313 BooktoMarketRatio k29 k30 k31 k32 k33 K35- k43 k47 k48 k49 k50 k51 k52 k53 k54 k56 PS_ VSL FP_ SRE EA 0,515 Overall Corporate Reputation 0,451 Ölçü Modeldeki Değer Kabul edilir Uyum CMIN/DF 4,05 <5 CFI RMSEA GFI Goodness-of-fit (GOF) statistics, based on the mathematical comparison of observed and estimated covariance matrices, comment the integration of reality (observation) to theory. Although none of GOF indexes carry all the properties of an ideal index the academicians used several GOF measures in the past (Bollen and Long, 1993). Gerbing and Anderson (1993, p.42) draw attention to the difficulty of that there may never be a single index used to the exclusion of the others. Hair and Black et al. (2010, p. 672) detect reporting of the χ² value and level of freedom, the CFI or TLI, and the RMSEA sufficient for evaluating a model. Characteristics of fit indices for GOF are presented in the model table above. (MÜGE ÇEVİK TEZ) Gefen et al. (2000) manifest that the IS literature advises χ² to be as small as possible and showing a ratio of χ² to degrees of freedom smaller than 3:1 (Chin and Todd, 1995). The GOF statistics are used to criticize the model fit of the measurement model in this study in line with Hair and Black et al. (2010) recommendations; CMIN/df, comparative fit index (CFI), standardized root mean residual (SRMR) and root mean square error of approximation (RMSEA).

92 Covariances: Estimate Std.Err z-value P(> z ) PS_VSL ~~ FP_SRE OCR ~~ OBE(c ) So BooktoMarket variable has been affected by two independent variables. If we examine both of these groups seperately, Overal Brand Equity has 3 components.

93 Awareness_ Associations PerceivedQuality Overal Brand Equity BrandLoyalty And Overal Corporate Reputation has 3 components. In general the groups are formed like this: Final Analysis of Hypotheses with R Programming Do not reject H1: Brand loyalty has a significant positive impact on firm value. Do not reject H2: Perceived brand quality has a significant positive impact on firm value. Do not reject H3: Brand associations have direct effect (negative or positive) on firm value. Do not reject H4: Brand awareness has a significant positive impact on firm value. Reject H5: Overall corporate reputation moderates the relationship between brand equity and firm value. Do not reject H6: Emotional appeal has a significant positive impact on firm value. Do not reject H7: Products and services has a significant positive impact on firm value.