Much research on brand equity in business markets has focused on predicting brand loyalty, regarding the brand image elements that make consumers buy a preferred brand. Inasmuch, price premium is a distinct and economically important outcome of a favourable brand image, and has been addressed in recent research. Furthermore, this research is primarily concerned about the determinants of B2B brand image elements and the relationship to price premium in the agricultural sector of South Africa. The agricultural sector in South African contributes 1.9% to gross domestic product and supplies more than 10% of the total employment in South Africa.
This research paper sought to determine whether there are specific elements that act as motivators for consumers in their decision-making process when they purchase costly brands in the agricultural sector. In an attempt to answer this question, this research paper confirmed the corporate brand image determinants of price premium that are conceptualised into six dimensions, namely: brand familiarity-, product solution-, service-, distribution-, relationship- and company associations.
Findings from this small-scale explorative and qualitative investigation, based on interviews with final decision makers (consumers) in the agricultural sector of South Africa were used to illustrate on how this model relates to consumers’ willingness to pay a price premium for physical capital. This research paper also proposed a model that brand owners can utilise to position their brand in the South African agricultural sector to ensure that they obtain traction in a strong brand dominated market.