Brand Equity and Brand Image as Direct and Indirect Determining Factors of Small Business Growth

Abstract

: This study aims to analyze how brand equity (BE) and brand image (BI) affect the Small/Medium Enterprises growth (“Naik Kelas”, i.e., NK) either directly or through a repeated buying process (PB). We use Structural Equation Model (SEM) analysis with data samples collected from 211 participants. The results of the study show that BI has a significant direct effect on SMEs to level up with the coefficient of determination r2 = 0.769, while the indirect effect is only r2 = 0.09 or 9%. Brand equity has a negative direct effect on SME's leveling up by r2 = 0.528, while its indirect effect is only r2 = 0.09 or 9%. Repeated purchases have a positive and significant direct effect of r2 = 0.482, while BE and BI have a small or very weak effect on repeat purchases. These results illustrate that brand image and brand equity play a significant role in leveling up SMEs, but on the other hand, they have a very weak effect on repeat purchases