Abstract

The objective of this research is to explore the relationship between brand extension strategy, brand image, brand trust, and brand equity in the coffee industry of Indonesia. The research mainly discusses the effect of brand extension strategy on brand equity through brand image and brand trust in the coffee industry, i.e., Kapal Api as a leading coffee brand in Indonesia. Approximately 200 respondents of Kapal Api consumers participated on the survey by responding the questionnaire. Data were analyzed using Structural Equation Modeling (SEM) by combining factor analysis and regression analysis. The results of the evaluation of the one step modification model show that the model is fit and tested for causality. This study shows that brand extension strategy affects brand trust but does not affect brand image and brand equity. Brand trust affects brand image and brand equity. In addition, the brand image also affects brand equity. Brand trust is able to mediate the brand extension strategy on brand equity while a brand image is not. This research is useful for businesses to evaluate marketing strategies in maximizing potential customers by understanding the factors that influence brand equity.

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