The Effect of Innovations to Brand Equity: The Role of Customers Satisfaction on Postal Service

The postal services have evolved steadily and play a vital role to deliver communication over many centuries. A successful innovation will help postal industry to create strong brand equity. From the marketing standpoint, brand equity and innovation play a critical role to aid elasticity for long-term growth. Innovation is the basic of all competitive advantages and the key to aid an organization to stay highly competitive, winning new customers and remain relevant in today's business world. This study examines the effect of innovations to brand equity with the role of customer satisfaction to postal service in Malaysia. A closed-ended self-administered questionnaire was designed. Two high density states namely Penang and Kuala Lumpur were targeted as area of study focus. A total of 116 valid sets of data were collected from POS Malaysia (POSM) customers within 12 weeks through convenient sampling. Both Statistical Package for Social Science (SPSS) and Partial Least Square (PLS) software were used for data analysis. The results of the analysis show that both product innovation and service innovation contributes to brand equity. However, the marketing innovation does not affect the brand equity. Customer satisfaction do partially mediate the effect of product innovation and service innovation to brand equity of POSM. The study has some limitations where the responds represent the rural area are not collected. Also, the in-depth need of customers which leads to brand equity is not yet explored. The future research may include the responds from rural area. Also, the perceptive of POSM's employees regarding the POSM's innovation and brand equity is worthwhile to obtain. Regardless of the limitations, this study provides an in-depth understanding of innovation and brand equity from the perspective of postal service industry.