1 The Relationships among Marketing Forces, Industrial Brand Equity, Trust, and Customer Loyalty: An Empirical Study of Taiwan Lumber Import Market Tse-Wen Hsieh, Tsui-Ying Huang, and Jun-Yen Lee Presented by Jun-Yen Lee, Ph.D. Professor Department of Bio-industry & Agribusiness Administration National Chai-Yi University, Taiwan

2 INTRODUCTION The importance of customer loyalty. Can the marketing forces lead to customer loyalty? What are the mediators in this relationship? Background Objectives To understand the relationships of marketing forces, industrial brand equity, trust, and customer loyalty. To explore the mediating effects of industrial brand equity and trust between marketing forces and customer loyalty.

3 1. Marketing forces :5 Ps Kotler (1999) ； McCarthy (1960) ； Booms and Bitner(1981) 2.Industrial brand equity: brand awareness and brand quality. Mudambi (1997) ； Allard et al. (2005) 3. Trust: one company’s expectation of the other company’s competence, goodwill, and behavior. Sako (1992) ； Anderson and Narus (1990) ； Moorman et al. (1993) ； Morgan and Hunt (1994) 4.Customer loyalty: repeated purchases of the brand. Oliver (1997) ； Rubinson (1996) ； Simeon Chow (1997) ； Chaudhuri and Holbrook (2001) ； Taylor(2004 ) LITERATURE REVIEW Ability to identify the brand Superiority of a brand relative to alternative products Technical capabilities and skills Moral responsibility and positive intentions to the other Keep promises

4 Customer loyalty Trust Brand equity Marketing forces H6 H4 Aaker(1991) H5 Taylor(2004) H3 Allard et al.(2005) H2 H1 MODEL The proposed research model

5 Trust Brand equity Marketing forces H9 Customer loyalty H7 H8 MODEL Rival model

6 Samples ： 259 companies Survey method: questionnaire sent by mail and Data analysis method: Structure Equation Modeling (SEM) Mail Total Sent Responses Follow-up returns 25 Response rate (%) 38.2 ％ Valid questionnaire 89 METHOD

7 CharacteristicsItems Frequencies Job position 1. CEO 2. Purchase manager 3. others_____ Sales/yr 1. less than $5 million (or U.S. $ 170 thousands) 2 $5million~$10 million 3. More than $20 million Operating term 1. less than 10 years 2. 11~15 years ~20 year 4. More than 21 years Work experience 1. Less than 5 years years years years Respondent status EMPERICAL RESULTS Descriptive statistics

8 Reliability and validity analysis 1. Reliability ： ConstructsCronbach ’ s α Marketing forces (4 Items) Industrial brand equity (4 Items) Trust (3 Items) Customer loyalty (5 Items) EMPERICAL RESULTS

9 2. Validity ： –Content validity –Construct validity ： Validating by the confirmatory factor analysis( CFA ) EMPERICAL RESULTS

10 1. Brand equity : 2. Marketing forces ： Construct validity analysis CMIN/DF=0.043, GFI=1.000, CFI=1.000, RMSEA=0.000 ˇ ˇ ˇˇ CMIN/DF=0.877, GFI=0.941, CFI=1.000, RMSEA=0.000 ˇ ˇ ˇˇ EMPERICAL RESULTS

11 3. Trust: 4. Customer loyalty CMIN/DF=0.157, GFI=0.999, CFI=1.000, RMSEA=0.000 ˇ ˇ ˇˇ MIN/DF=0.742, GFI=0.987, CFI=1.000, RMSEA=0.000 ˇ ˇ ˇˇ EMPERICAL RESULTS

12 5. Construct validity analysis for whole constructs MIN/DF=1.470, GFI=0.840, CFI=0.944, RMSEA=0.073 ˇ ˇ ˇˇ EMPERICAL RESULTS

13 Goodness of fit and Hypothesis tests 1.The proposed research model MIN/DF=1.470, GFI=0.840, CFI=0.944, RMSEA=0.073 EMPERICAL RESULTS

14 2. Modified model-Model Ⅰ MIN/DF=1.460, GFI=0.840, CFI=0.944, RMSEA=0.073 EMPERICAL RESULTS

15 3. Modified model- Model Ⅱ MIN/DF=1.521, GFI=0.835, CFI=0.937, RMSEA=0.077 EMPERICAL RESULTS

16 4. Modified model- Model Ⅲ MIN/DF=1.515, GFI=0.834, CFI=0.937, RMSEA=0.076 ˇ ˇ ˇˇ EMPERICAL RESULTS

17 5. Rival model MIN/DF=1.929, GFI=0.796, CFI=0.886, RMSEA=0.103 ↓ ㄨ ↓↓ EMPERICAL RESULTS

18 Research hypotheses Hypotheses Path Standardized estimates Descriptions Proposed research model Model Ⅲ H1: Marketing forces has a direct positive effect on customer loyalty. mf  cl 0.353** H2: Marketing forces has a direct positive effect on trust. mf  trust ＊＊ ＊＊＊ H3: Marketing forces has a direct positive effect on industrial brand equity. mf  be ＊＊＊ ＊＊＊ H4: Industrial brand equity has a direct positive effect on customer loyalty. be  cl ＊＊＊ ＊＊＊ H5: Trust has a direct positive effect on customer loyalty. trust  cl ＊＊ H6: Industrial brand equity has a direct positive effect on trust. be  trust EMPERICAL RESULTS

19 Conclusions -Hypothesis tests show that marketing forces has a direct positive effect on industrial brand equity and trust. -Also, trust and industrial brand equity has a direct positive effect on customer loyalty, respectively. -Industrial brand equity and trust are the mediating factors between marketing forces and customer loyalty. -Industrial brand equity has higher effect on customer loyalty than trust has. -To increase wood raw material buyers’ loyalty, the suppliers should build brand equity and customer trust. CONCLUSIONS

20 Thank you!