Deteminants of brand loyalty in the vietnamese neer industry
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NIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
NGO HOANG THI QUYNH OANH
DETEMINANTS OF BRAND LOYALTY IN THE
VIETNAMESE BEER INDUSTRY
MASTER OF BUSINESS (BY HONOUR)
Ho Chi Minh City – Year 2012
UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
NGO HOANG THI QUYNH OANH
DETEMINANTS OF BRAND LOYALTY IN THE
VIETNAMESE BEER INDUSTRY
STUDENT ID: 60340102
MASTER OF BUSINESS BY HONOUR
SUPERVISOR: DR. PHAM NGOC THUY
Ho Chi Minh City - Year 2012
ACKNOWLEDGEMENTS
I would like to express my sincere gratitude to Dr. Pham Ngoc Thuy who has
supported me a lot with the thesis preparation and motivated me throughout the
journey of the thesis.
I strongly believe that I could have not completed this thesis without the
assistance from all of my friends who helped me to guide the customers to do
the survey and chased for data submission.
I would like to thank Sabmiller staffs for there is kind support to provide me
with necessary information and materials.
And finally my special thanks to my husband who was always with me to show
his empathy and encourages me to complete this thesis.
December 8, 2012
Ho Chi Minh City, Viet Nam
Ngo Hoang Thi Quynh Oanh
ABSTRACT
In recent years the amount of beer consumption increased significantly. The
beer companies increasingly expand the market and increase the retailer to take
the company's image and products to market. The purpose of attracting
customers to used the company's products more and more. This research is to
identify the determinants affecting customer loyalty through beer products. It
also requires investors in times of abundant commodities, constant competition
and especially during storms today.
This study was aimed to explore these factors affect brand loyalty in Ho Chi
Minh City is done through quantitative methods. Formal quantitative research
through interviews using a questionnaire with a sample collected in a
convenient method of 200 consumers in Ho Chi Minh City. Data are used to
assess the scale and test hypotheses. Cronbach Alpha coefficients analysis,
explore factor analysis (EFA) and regression analysis used in this section. Test
results obtained show that the hypothesis consistent with the original theoretical
model. According to which only some components of the factors affecting
consumer loyalty for beer products, including value factors have the strongest
impact.
The research results contribute to the theoretical basis of research by
understanding the meaning of the factors that affect consumer loyalty with beer.
Thereby, the results also provide managers with a basis for decision-making,
investment options to develop new products in line with objectives and current
strategic.
Key words: Perceived value, Brand Image, Brand Awareness, Brand Loyalty
TABLES OF CONTENTS
CHAPTER 1: INTRODUCTION ................................................................................................... 1
1.1 BACKGROUND.................................................................................................... 1
1.2 PROBLEM STATEMENT .................................................................................... 2
1.3 RESEARCH OBJECTIVES .................................................................................. 4
1.4 SCOPE OF STUDY: .............................................................................................. 4
1.5 SIGNIFICANCE ................................................................................................... 5
1.6 STRUCTURE OF THE THESIS STATEMENTS ................................................. 5
CHAPTER 2: LITERATURE REVIEW & THEORETICAL MODEL ....................................... 6
2.1 BRAND ......................................................................................................................... 6
2.1.1 Traditional viewpoint of Brand: ........................................................................... 6
2.1.2 Synthetic viewpoint of Brand: ............................................................................... 7
2.2 BRAND EQUITY ............................................................................................................. 7
2.3 CUSTOMER-BASED PERSPECTIVE OF BRAND EQUITY .................................................. 9
2.3.1 Brand Image ........................................................................................................ 12
2.3.2 Brand Awareness ................................................................................................. 13
2.3.3 Perceived Value ................................................................................................... 14
2.3.4 Brand Loyalty....................................................................................................... 15
2.4 RESEARCH MODEL, HYPOTHESIS ..................................................................... 17
2.4.1 Research Model and hypothesis .......................................................................... 17
CHAPTER 3: RESEARCH METHODS ...................................................................................... 20
3.1 RESEARCH PROCESS....................................................................................................... 20
3.2 MEASUREMENT SCALES...................................................................................... 24
3.2.1 Measurement Scales .................................................................................... 24
3.3 SAMPLING METHOD............................................................................................. 27
3.3.1 Target population and sampling method ............................................................ 27
3.4 MAIN SURVEY AND DATA COLLECTION. ......................................................... 28
3.5 DATA ANALYSIS METHODS................................................................................. 28
3.5.1 Exploratory Factor Analysis (EFA) .................................................................... 28
3.5.2 Reliability Analysis ....................................................................................... 29
3.5.3 Multiple Regression Analysis........................................................................ 29
CHAPTER 4: DATA ANALYSIS ................................................................................................ 31
4.1 DESCRIPTIVE DATA ANALYSIS .......................................................................... 31
4.1.2 Descriptive analysis of the variables studies ........................................................ 32
4.2 MEASUREMENT SCALE ASSESSMENT .............................................................. 33
4.2.1 Cronbach Alpha Reliability Analysis .................................................................. 33
4.2.2 Exploratory Factor Analysis ............................................................................... 35
4.2.2.1 EFA analysis results for measurement scales of independent factors
(Brand awareness, Perceived Value, Brand Image) ................................................. 35
4.2.2.2 EFA analysis results for measurement scales of dependent factor (Brand
loyalty) .................................................................................................................... 37
4.2.2.3 Testing relationship of independent factors and dependent factor................ 38
4.3 HYPOTHESES TESTING ........................................................................................ 40
4.3.1 Testing Assumption of multiple Regressions ....................................................... 40
4.3.2 Evaluate and test the relevance of the model ....................................................... 41
4.3.3 Testing hypotheses on the impact of Independent factors on Brand Loyalty ....... 42
4.4 DISCUCSIONS ......................................................................................................... 45
4.4.1 Regression analysis results Regression standardized regression coefficient Beta: .. 45
4.4.2 Brand Awareness ................................................................................................ 45
4.4.3 Brand Image ....................................................................................................... 46
4.4.4. Perceived Value ................................................................................................. 46
4.5 SUMMARY .............................................................................................................. 46
CHAPTER 5: CONCLUSIONS AND IMPLICATIONS ............................................................ 48
5.1 RESEARCH OVERVIEW ........................................................................................ 48
5.2 KEY FINDINGS ....................................................................................................... 49
5.3 MANAGERIAL IMPLICATIONS............................................................................ 49
5.4 CONTRIBUTIONS OF THE STUDY ....................................................................... 50
5.4.1 Contributions of theory....................................................................................... 50
5.4.2 Contribute to practical........................................................................................ 51
5.5 LIMITATIONS OF TOPICS AND NEXT RESEARCH PLANS .............................. 51
REFERENCES LIST ....................................................................................................................
APPENDIX 1.................................................................................................................................
APPENDIX 2.................................................................................................................................
APPENDIX 3.................................................................................................................................
LIST OF TABLES
Table 4.1: Descriptive Statistics of Sample............................................................................... 32
Table 4.2: Reliability analysis results. ...................................................................................... 34
Table 4.3 EFA analysis results for the independent variables after handling ......................... 356
Table 4.4 EFA analysis results for dependent – Brand Loyalty ................................................ 37
Table 4.5: Multiple Regressions results of Brand Loyalty to independent ............................... 39
Table: 4.6 Result of hypotheses testing between Independent Factors and Brand Loyalty ...... 42
B ng 4.7: Hypotheses Testing Results .................................................................................... 453
B ng 4.8: Summary results of the hypotheses .......................................................................... 45
LIST OF FIGURES
Figures 1 – Prpoposed Research Model .................................................................................... 17
Figure 2 - Research Process ...................................................................................................... 22
Figures 3 - Research model after testing by EFA ..................................................................... 40
Figures 4 – Multiples Regression Result................................................................................... 44
CHAPTER 1: INTRODUCTION
This chapter introduces the context of the study, including a short introduction
of beer industry in Viet Nam the purpose of this study and the other contents
such as the rationale of the research, problem statement and research
methodology.
1.1 BACKGROUND
Vietnam has a young population and is a potential market for the beer industry.
With a growth market with two figures and capita consumption of beer in just
21lit/person (VBA, report 2009) is still low compared to world average of
results strongly attractive for any business. Present on the Vietnamese market
are over 30 types of beer exist stretches from North to South. These products
are well-known consumer must mention Heineken known, Sai Gon blue,
Castbreg, 333.....And most recently of Sapporo of Japan and Gambrinus of
Czechoslovakia have penetrated the market more "lucrative" is. These products
are primarily levied on customers with high income and geographic distribution
mainly in the central districts of the city, or the neighboring provinces, where
many tourists visit.
According to the VBA, report 2010
"In VBA, in recent years, Vietnam's beer has made great progress.
Ended in 2009, the industry reached 2.5 billion liters in volume. Most
businesses produce wine, beer and soft drinks in VBA with an average
growth rate of 15% compared with 2008. Currently, Vietnam has about
350 beer production facility, which has 20 factories with a capacity of 20
million liters/year. Every year, the sector to create jobs for thousands of
workers and pay tens of billion budgets"
1
1.2 PROBLEM STATEMENT
As Amy et.al. (1999) stated: “In order to achieve competitive advantage and
efficiency, businesses have to seek profitable ways to differentiate themselves.
The only to survive and maintain customer revisits is to understand what
customers need and their expectation. Customer satisfaction is considered a
prerequisite for customer retention and loyalty, and obviously helps in realizing
economic goals like profitability (Sureshchandaret al., 2002).
We outline some beer company information is currently available in Vietnam
market and these beers have the same level premium as follow.
Vietnam Brewery Company Limited (VBL), beer production units Tiger,
Heineken in Vietnam, is a joint venture established on 09/12/1991, between
Saigon Trade Corporation (SATRA) and Asia Pacific Breweries Ltd group.
(APBL), head quartered in Singapore. Having been in Vietnam for nearly 20
years, the world's leading beer brand Heineken conquered by consumer
premium quality no one can match with beer. For Heineken, the promotional
gentle, subtle make consumers feel secure when using the product. Messages
for promotions is very simple "old Heineken beer is about to leave and was
replaced by 5% premium Heineken."These elements are conveyed through PR
with the message" Heineken has changed "vividly expressed through a
campaign with the help of top photographer Rankin. He has photographed
celebrities 7th most UK and changes each face with each other to express the
main message of the campaign. In addition to strengthening the Heineken brand
has also launched a campaign based on the idea of "Heineken has been tested on
the streets all over the world and make sure that Heineken is the best choice for
you". It is expressed through many pictures to show people that Heineken beer
is interested in worldwide (vblgroup.vn)
2
Sai Gon beer, products on the market for more than 30 years has become a
destination for lovers of this beer. The company has done well with the
promotion of diverse forms of promotion, rich, attractive, with the prize of great
value, attracting a large number of consumers to participate, promote
consumption of products beer. Recent, Sabeco Company has launched the
marketing promotion as “Together Saigon beer to double happiness“ and" drink
Sai Gon beer hit SH motor" and achieved good results.
SABMiller is one of the largest multinational beer companies in the world with
headquarters in the UK, owns over 200 beer brands known worldwide, have a
thickness of over 100 activities in 60 countries with a total staff of about 68,000
people. SABMiller Vietnam with 100% foreign capital from the SABMiller
Group, known for products such as Peroni Nastro Arruzzo, Pilsner Urquell,
Gambrinus, Zorok, Miller, Castle...Penetrate new markets in Vietnam, but not
height or Sai Gon special as Tiger, Heineken velvet Gambrinus also pretty
impressed with the way consumers through marketing "How to open bottle cap
hit right trip Czechoslovakia" cradle of beer Gambrinus is the people this
country exists as the "King of beers” .(Sabmiller.vn)
One of the important issues is to keep the current customers purchasing and
using the service and repeating using service. Moreover, for Vietnamese, the
more loyalty a customer has toward a certain brand, the more chance that brand
is introduced to new customers via the “word-of-mouth”. In response to this
issue, companies tried launching attractive promotions in order to attract the
loyalty of customers for their products.
Customer loyalty for a brand that speaks to the trend of customers to buy and
use brand in a product family and repeat this behavior (Chaudhuri 1999). Brand
loyalty plays important role in the success of the brand. So which brand create
higher customer loyalty, bring profit to the company as higher, which means
that this brand of high value (Aggarwal P (2004)
3
Given the above mentioned situation, measuring customers’ perception for beer
brand equity becomes very important and necessary. It will be the basis for
improving the brand equity for beer industry. Research results contribute to
research on the basis of the theory of brand loyalty through understanding the
meaning of the factors that affect consumer loyalty to the brand. Thereby, the
results also provide for investor how to keep customers loyal to the brand,
which is why this study performance, results of topics beer companies can be
used
1.3 RESEARCH OBJECTIVES
The overall objective of this research is to measure the loyal of customer based
brand equity for beer industry on Viet Nam, then to develop the specific
program to improve it.
Specific objectives in this research are as follows:
To identify the impacts of Brand Equity components (Brand Awareness,
Perceived value, Brand Image) on the Brand Loyalty in beer industry on
Viet Nam.
1.4 SCOPE OF STUDY:
This study will be mainly based on the customer-based perspective of
Brand Equity only. The financial perspectives of the brand equity are
beyond our scope of study. The research was narrowed down to Ho Chi
Minh City.
This study focus drinker. Owner, shop, wholesaler only reference to
establish questionnaire.
Focus on brands have same level premium: Heineken, Sai Gon special ,
Sapporo, Gambrinus, Tiger.
4
This study will consist of two main parts which assigned individually to
each author. Part 1 focus on the creation of information, data analysis;
part 2 will be the improving program based on these findings.
1.5 SIGNIFICANCE
Research results will determine the factors affecting brand loyalty. Since then
the manager have plan to develop appropriate strategies to promote their
products to consumers more and more widely.
1.6 STRUCTURE OF THE THESIS STATEMENTS
The structure of this research report consists of five chapters. Chapter 1
introduces the overview of the research topic. Chapter 2 presents the theoretical
basis of the concepts involved, theoretical modeling with the proposed
hypothesis. Chapter 3 presents the research methodology to test the scale and
theoretical models offered. Chapter 4 presents the results of the implementation
of the testing and analysis of information and data from which to draw
conclusions for the research hypotheses proposed in Chapter 2. Chapter 5
summarizes the main results of the study, the contribution of management
theory and practice and also mentioned the limitations of research to guide
subsequent studies.
5
CHAPTER 2: LITERATURE REVIEW & THEORETICAL
MODEL
First of all, key concepts in the current study such as Brand, Brand Equity,
Customer-based Equity, Brand Loyalty, Strategic Brand Equity Management
and their role and importance in business activities will be reviewed
2.1 BRAND
The term “brand” has multiple meanings and different perspectives. Kreutz
(2004) indicated that Brand identified products and services, but a brand was
much more than a brand name or a brand logo on a brand-name product. He
also suggested further that brands reflect individual and collective desires that
go far beyond a product’s utilitarian benefit. Otherwise, he further explained the
brands to be presented by signs and symbols, gestures and images.
From service perspective, Blankson and Kalafatis (1999) suggested the service
brands are particularly different from product brands in which characteristics of
services brand are different from those of physical goods and they relied on
employees’ actions and attitudes.
From the financial perspective, according to Murphy (1990), a brand was not
only an actual product, but the unique property of a specific owner. It has been
developed over time so as to embrace a set of tangible and intangible attributes
that appropriately different products.
In general, there are two main viewpoints about brand, namely traditional view
and synthetic view.
2.1.1 Traditional viewpoint of Brand:
The American Marketing Association (AMA) defines a brand as a name, term,
sign, symbol, or design, or a combination of them, intended to identify the
6
goods and services of one sellers or group of sellers and to differentiate them
from those of competition ( in Tho et al, 2002).
From this viewpoint, brand is understood to be one component of products and
main character of brand are used to differentiate this product from other
product. Example, in some cases, the company name was essentially used for
all products as with General Electric and Hewlett- Packard. In other cases,
manufacturer assigned individual brand names to new products that were
unrelated to the company name as with Proctor & Gamble.
2.1.2 Synthetic viewpoint of Brand:
Brand is not only a name or logo or sign but it is much more complicated
(Davis, 2002). In this viewpoint, product is only a component of brand and so
products, price, distribution, promotion are components of brand (Amber and
Styles, 1996)
This view has been increasingly applied and accepted by researchers and in
practice also.
The fact is that customers have two needs including functional needs and
emotional needs. Product could only provide the functional needs for
customers, while brand could provide both functional needs and emotional
needs for customers. This is the explanation for why brand has been replacing
products in marketing activities of most companies nowadays.
2.2 BRAND EQUITY
Brand equity has been considered in many contexts: the added value endowed
by the brand name (Farquhar, 1989). This concept is defined from different
perspectives by many authors around the world. In general sense, according to
Keller (1991), Brand Equity is defined in terms of marketing effects uniquely
attributable to the brand, e.g., when the different outcome result for a product or
7
service because of its brand name as compared to if the same product or service
did not have that name.
Aaker (1991) defines brand equity as a set of brand assets and liabilities linked
to a brand, its name and symbol, that add to or subtract from the value provided
by a product or service to a firm and/or to that firm’s customers.
In other word, brand equity is the incremental value of a product due to the
brand name (Srivastava and Shocker, 1991)
According to some leading authors in brand management (Keller, Aaker,
Lassar, Srivastava, Shocker, Prasad and Dev ...), brand equity can be studied
from different viewpoints:
Customer-Based perspective ( Keller,1993; Aaker,1996)
The importance of understanding brand equity from customer’s point of
view is explained by Keller (1993) as positive customer based brand equity
can lead to a greater revenue, lower costs, and higher profit, it has direct
implications for the firm’s ability to command higher prices, customer’s
willingness to seek out new distribution channels, the effectiveness of
marketing communications, and the success of brand extensions and
licensing opportunities.
Financial perspective (Srivastava and Shocker, 1991, Kim et al , 2003)
Brands are increasingly considered primary capital in many businesses. The
notion that a brand has an equity which exceeds its conventional asset value
has been developed by financial professionals (Kim et al, 2003). The
financial perspective is based on the incremental discounted cash flows that
would results from a branded product’s revenue over the revenue of an
unbranded product (Simon and Sullivan, 1993).
8
Some studies have found that a product’s brand equity positively affects
future profits and long-term cash flow (Srivastava and Shocker, 1991).
Combined perspective (Dyson et al,1996; Motameni and Shajroki,1998)
Brand equity therefore is a broad concept and has various perspectives.
However, due to the scope of the study and the main reason in which I have
to identify where they are in the eyes of the customers, so , this research will
only focused on the first perspective (i.e. customer - based brand equity -
CBBE).
2.3 CUSTOMER-BASED PERSPECTIVE OF BRAND EQUITY
Keller (1991) defined Customer-Based Brand Equity (CBBE) as the different
affects that knowledge about the brand has on consumer’s responses to
marketing activities for the brand. He also mentioned that Customer-Based
Brand Equity involved how customers react to company’s marketing mix action
for a given brand, as compared to how they react if the same actions were
attributed to a hypothetical or unnamed version of the product or service.
Customer-Based Brand Equity happens when the customers get used to with the
brand and hold some favorable, strong, and unique brand associations in
memory (Keller, 1991)
Keller (1993, 1998) also suggests that brand equity is customers’ knowledge
and Customers’ knowledge included two main components, namely brand
image and brand awareness.
Aaker (1996) defined brand equity as a set of brand assets and liabilities linked
to a brand- its name and symbol-that adds to or subtracts from the value
provided by a product or service to a firm or to the firm’s customers. In another
way, Blackstone (1995), considered brand equity as brand value and brand
meaning, where brand meaning implied brand saliency, brand associations, and
brand personality, and where brand value was the outcome of managing the
9
brand meaning. Keller (1993) also defined it as the differential effect of brand
knowledge on consumer response to the marketing of the brand.
Lassar et al (1995) operationalised brand equity as the enhancement in the
perceived utility and desirability that a brand name confers on a product. Lassar
(1995) proposed 5 components of brand equity including perceived quality,
perceived value, brand awareness, brand trustworthiness and brand
commitment.
Lassar further suggested that CBBE included only perceptual dimensions,
excluding behavioral or attitudinal dimensions such as usage intention or
loyalty. Unlike others, Aaker(1991) suggested main components for CBBE:
brand loyalty, brand awareness, perceived quality and brand image.
With different viewpoints on the brand equity described above, it can be seen
that brand equity is a complicated concept which consists of many components,
and, possibly these components could include various sub-components. Many
authors have the same approach to the brand equity components: most of them
admit the presence of brand awareness and perceived quality in brand equity.
However, there are still some different viewpoints among the authors, for
example Lassar believes perceived value, brand trustworthiness and brand
commitment are other dimensions in brand equity concept, but for Aeker,
brand loyalty and brand image are the other components.
There is an indirect approach and a direct approach to measure consumer-based
brand equity (Keller, 1993). The direct approach requires measuring brand
awareness and the characteristics and relationships among brand associations.
Brand awareness can be assessed effectively through a variety of aided and
unaided memory measures that can be applied to test brand recall and
recognition. Brand associations can be measured by qualitative techniques such
as free association tasks that lead customers to describe what the brand means
10
to them, projective techniques such as sentence completion, and picture
interpretation, and brand personality descriptors. The direct approach, however,
requires experiments in which one group of customers responds to an element
of the marketing program when it is attributed to the brand and another group of
consumers responds to that same element when it is attributed to a fictitiously
named or unnamed version of the product or service (Kim et al, 2003)
The components of brand equity are different from one industry to other
industry. In the scope of this research for beer industry, we would mainly base
the brand equity concept suggested by Aaker whose components have been
broadly accepted and employed by many researchers (Keller, 1993; Low and
Lamb, 2000; Prasad and Dev, 2000; Yoo and Donthu, 2001). Also, we would
argue for the presence of one more component, brand affinity, which was
suggested by Ajzen & Fishbein in 1980 Also, a recent study for customer
behavior toward different shampoo in Vietnamese market, Dr Nguyen Dinh
Tho and Nguyen Thi Mai Trang (2002) proposed a model as hereunder:
Brand Perceived
Awareness Quality
Brand Loyalty
Brand Affinity
According to this model, Brand Loyalty is a component of Brand Equity.
However, it seems to become the results of interrelationships among these
components.
11
Therefore, we suggest that the Customer-Based Brand Equity’s components for
the case of beer industry will include Brand Image, Brand Awareness and
Perceived Value. Brand loyalty will become the result of Customer-Based
Brand Equity.
2.3.1 Brand Image
According to Keller (1998), brand image is defined as perceptions about a
brand as reflected by the brand associations held in consumer memory. Besides
marketer-controlled sources of information, brand association can also be
created in variety of other ways: by direct experiences, from information
communicated about the brand from the firm or other commercial or
nonpartisan sources, word of mouth; and by assumptions or interferences from
the brand itself (e.g, its name or logo) or from the identification of the brand
with a company, country, channel of distribution, or some particular person,
place or event.
To Keller (2000), to increase brand image of a company, it is necessary focus
on improving its brand associations as follows:
Strength of brand associations: the more deeply a person thinks about
product information and relates it to existing brand knowledge, the stronger
the resulting brand associations. Two factors facilitating the strength of
association to any piece of information are the personal relevance of the
information and the consistency with which this information is presented
over time.
The next strongest associations are likely to be formed on the basis of word
of mouth or other noncommercial sources of information. Word of mouth is
likely to be particularly important for service industry (restaurants,
entertainment, banking, etc..).
12
International School of Business
------------------------------
NGO HOANG THI QUYNH OANH
DETEMINANTS OF BRAND LOYALTY IN THE
VIETNAMESE BEER INDUSTRY
MASTER OF BUSINESS (BY HONOUR)
Ho Chi Minh City – Year 2012
UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
NGO HOANG THI QUYNH OANH
DETEMINANTS OF BRAND LOYALTY IN THE
VIETNAMESE BEER INDUSTRY
STUDENT ID: 60340102
MASTER OF BUSINESS BY HONOUR
SUPERVISOR: DR. PHAM NGOC THUY
Ho Chi Minh City - Year 2012
ACKNOWLEDGEMENTS
I would like to express my sincere gratitude to Dr. Pham Ngoc Thuy who has
supported me a lot with the thesis preparation and motivated me throughout the
journey of the thesis.
I strongly believe that I could have not completed this thesis without the
assistance from all of my friends who helped me to guide the customers to do
the survey and chased for data submission.
I would like to thank Sabmiller staffs for there is kind support to provide me
with necessary information and materials.
And finally my special thanks to my husband who was always with me to show
his empathy and encourages me to complete this thesis.
December 8, 2012
Ho Chi Minh City, Viet Nam
Ngo Hoang Thi Quynh Oanh
ABSTRACT
In recent years the amount of beer consumption increased significantly. The
beer companies increasingly expand the market and increase the retailer to take
the company's image and products to market. The purpose of attracting
customers to used the company's products more and more. This research is to
identify the determinants affecting customer loyalty through beer products. It
also requires investors in times of abundant commodities, constant competition
and especially during storms today.
This study was aimed to explore these factors affect brand loyalty in Ho Chi
Minh City is done through quantitative methods. Formal quantitative research
through interviews using a questionnaire with a sample collected in a
convenient method of 200 consumers in Ho Chi Minh City. Data are used to
assess the scale and test hypotheses. Cronbach Alpha coefficients analysis,
explore factor analysis (EFA) and regression analysis used in this section. Test
results obtained show that the hypothesis consistent with the original theoretical
model. According to which only some components of the factors affecting
consumer loyalty for beer products, including value factors have the strongest
impact.
The research results contribute to the theoretical basis of research by
understanding the meaning of the factors that affect consumer loyalty with beer.
Thereby, the results also provide managers with a basis for decision-making,
investment options to develop new products in line with objectives and current
strategic.
Key words: Perceived value, Brand Image, Brand Awareness, Brand Loyalty
TABLES OF CONTENTS
CHAPTER 1: INTRODUCTION ................................................................................................... 1
1.1 BACKGROUND.................................................................................................... 1
1.2 PROBLEM STATEMENT .................................................................................... 2
1.3 RESEARCH OBJECTIVES .................................................................................. 4
1.4 SCOPE OF STUDY: .............................................................................................. 4
1.5 SIGNIFICANCE ................................................................................................... 5
1.6 STRUCTURE OF THE THESIS STATEMENTS ................................................. 5
CHAPTER 2: LITERATURE REVIEW & THEORETICAL MODEL ....................................... 6
2.1 BRAND ......................................................................................................................... 6
2.1.1 Traditional viewpoint of Brand: ........................................................................... 6
2.1.2 Synthetic viewpoint of Brand: ............................................................................... 7
2.2 BRAND EQUITY ............................................................................................................. 7
2.3 CUSTOMER-BASED PERSPECTIVE OF BRAND EQUITY .................................................. 9
2.3.1 Brand Image ........................................................................................................ 12
2.3.2 Brand Awareness ................................................................................................. 13
2.3.3 Perceived Value ................................................................................................... 14
2.3.4 Brand Loyalty....................................................................................................... 15
2.4 RESEARCH MODEL, HYPOTHESIS ..................................................................... 17
2.4.1 Research Model and hypothesis .......................................................................... 17
CHAPTER 3: RESEARCH METHODS ...................................................................................... 20
3.1 RESEARCH PROCESS....................................................................................................... 20
3.2 MEASUREMENT SCALES...................................................................................... 24
3.2.1 Measurement Scales .................................................................................... 24
3.3 SAMPLING METHOD............................................................................................. 27
3.3.1 Target population and sampling method ............................................................ 27
3.4 MAIN SURVEY AND DATA COLLECTION. ......................................................... 28
3.5 DATA ANALYSIS METHODS................................................................................. 28
3.5.1 Exploratory Factor Analysis (EFA) .................................................................... 28
3.5.2 Reliability Analysis ....................................................................................... 29
3.5.3 Multiple Regression Analysis........................................................................ 29
CHAPTER 4: DATA ANALYSIS ................................................................................................ 31
4.1 DESCRIPTIVE DATA ANALYSIS .......................................................................... 31
4.1.2 Descriptive analysis of the variables studies ........................................................ 32
4.2 MEASUREMENT SCALE ASSESSMENT .............................................................. 33
4.2.1 Cronbach Alpha Reliability Analysis .................................................................. 33
4.2.2 Exploratory Factor Analysis ............................................................................... 35
4.2.2.1 EFA analysis results for measurement scales of independent factors
(Brand awareness, Perceived Value, Brand Image) ................................................. 35
4.2.2.2 EFA analysis results for measurement scales of dependent factor (Brand
loyalty) .................................................................................................................... 37
4.2.2.3 Testing relationship of independent factors and dependent factor................ 38
4.3 HYPOTHESES TESTING ........................................................................................ 40
4.3.1 Testing Assumption of multiple Regressions ....................................................... 40
4.3.2 Evaluate and test the relevance of the model ....................................................... 41
4.3.3 Testing hypotheses on the impact of Independent factors on Brand Loyalty ....... 42
4.4 DISCUCSIONS ......................................................................................................... 45
4.4.1 Regression analysis results Regression standardized regression coefficient Beta: .. 45
4.4.2 Brand Awareness ................................................................................................ 45
4.4.3 Brand Image ....................................................................................................... 46
4.4.4. Perceived Value ................................................................................................. 46
4.5 SUMMARY .............................................................................................................. 46
CHAPTER 5: CONCLUSIONS AND IMPLICATIONS ............................................................ 48
5.1 RESEARCH OVERVIEW ........................................................................................ 48
5.2 KEY FINDINGS ....................................................................................................... 49
5.3 MANAGERIAL IMPLICATIONS............................................................................ 49
5.4 CONTRIBUTIONS OF THE STUDY ....................................................................... 50
5.4.1 Contributions of theory....................................................................................... 50
5.4.2 Contribute to practical........................................................................................ 51
5.5 LIMITATIONS OF TOPICS AND NEXT RESEARCH PLANS .............................. 51
REFERENCES LIST ....................................................................................................................
APPENDIX 1.................................................................................................................................
APPENDIX 2.................................................................................................................................
APPENDIX 3.................................................................................................................................
LIST OF TABLES
Table 4.1: Descriptive Statistics of Sample............................................................................... 32
Table 4.2: Reliability analysis results. ...................................................................................... 34
Table 4.3 EFA analysis results for the independent variables after handling ......................... 356
Table 4.4 EFA analysis results for dependent – Brand Loyalty ................................................ 37
Table 4.5: Multiple Regressions results of Brand Loyalty to independent ............................... 39
Table: 4.6 Result of hypotheses testing between Independent Factors and Brand Loyalty ...... 42
B ng 4.7: Hypotheses Testing Results .................................................................................... 453
B ng 4.8: Summary results of the hypotheses .......................................................................... 45
LIST OF FIGURES
Figures 1 – Prpoposed Research Model .................................................................................... 17
Figure 2 - Research Process ...................................................................................................... 22
Figures 3 - Research model after testing by EFA ..................................................................... 40
Figures 4 – Multiples Regression Result................................................................................... 44
CHAPTER 1: INTRODUCTION
This chapter introduces the context of the study, including a short introduction
of beer industry in Viet Nam the purpose of this study and the other contents
such as the rationale of the research, problem statement and research
methodology.
1.1 BACKGROUND
Vietnam has a young population and is a potential market for the beer industry.
With a growth market with two figures and capita consumption of beer in just
21lit/person (VBA, report 2009) is still low compared to world average of
results strongly attractive for any business. Present on the Vietnamese market
are over 30 types of beer exist stretches from North to South. These products
are well-known consumer must mention Heineken known, Sai Gon blue,
Castbreg, 333.....And most recently of Sapporo of Japan and Gambrinus of
Czechoslovakia have penetrated the market more "lucrative" is. These products
are primarily levied on customers with high income and geographic distribution
mainly in the central districts of the city, or the neighboring provinces, where
many tourists visit.
According to the VBA, report 2010
"In VBA, in recent years, Vietnam's beer has made great progress.
Ended in 2009, the industry reached 2.5 billion liters in volume. Most
businesses produce wine, beer and soft drinks in VBA with an average
growth rate of 15% compared with 2008. Currently, Vietnam has about
350 beer production facility, which has 20 factories with a capacity of 20
million liters/year. Every year, the sector to create jobs for thousands of
workers and pay tens of billion budgets"
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1.2 PROBLEM STATEMENT
As Amy et.al. (1999) stated: “In order to achieve competitive advantage and
efficiency, businesses have to seek profitable ways to differentiate themselves.
The only to survive and maintain customer revisits is to understand what
customers need and their expectation. Customer satisfaction is considered a
prerequisite for customer retention and loyalty, and obviously helps in realizing
economic goals like profitability (Sureshchandaret al., 2002).
We outline some beer company information is currently available in Vietnam
market and these beers have the same level premium as follow.
Vietnam Brewery Company Limited (VBL), beer production units Tiger,
Heineken in Vietnam, is a joint venture established on 09/12/1991, between
Saigon Trade Corporation (SATRA) and Asia Pacific Breweries Ltd group.
(APBL), head quartered in Singapore. Having been in Vietnam for nearly 20
years, the world's leading beer brand Heineken conquered by consumer
premium quality no one can match with beer. For Heineken, the promotional
gentle, subtle make consumers feel secure when using the product. Messages
for promotions is very simple "old Heineken beer is about to leave and was
replaced by 5% premium Heineken."These elements are conveyed through PR
with the message" Heineken has changed "vividly expressed through a
campaign with the help of top photographer Rankin. He has photographed
celebrities 7th most UK and changes each face with each other to express the
main message of the campaign. In addition to strengthening the Heineken brand
has also launched a campaign based on the idea of "Heineken has been tested on
the streets all over the world and make sure that Heineken is the best choice for
you". It is expressed through many pictures to show people that Heineken beer
is interested in worldwide (vblgroup.vn)
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Sai Gon beer, products on the market for more than 30 years has become a
destination for lovers of this beer. The company has done well with the
promotion of diverse forms of promotion, rich, attractive, with the prize of great
value, attracting a large number of consumers to participate, promote
consumption of products beer. Recent, Sabeco Company has launched the
marketing promotion as “Together Saigon beer to double happiness“ and" drink
Sai Gon beer hit SH motor" and achieved good results.
SABMiller is one of the largest multinational beer companies in the world with
headquarters in the UK, owns over 200 beer brands known worldwide, have a
thickness of over 100 activities in 60 countries with a total staff of about 68,000
people. SABMiller Vietnam with 100% foreign capital from the SABMiller
Group, known for products such as Peroni Nastro Arruzzo, Pilsner Urquell,
Gambrinus, Zorok, Miller, Castle...Penetrate new markets in Vietnam, but not
height or Sai Gon special as Tiger, Heineken velvet Gambrinus also pretty
impressed with the way consumers through marketing "How to open bottle cap
hit right trip Czechoslovakia" cradle of beer Gambrinus is the people this
country exists as the "King of beers” .(Sabmiller.vn)
One of the important issues is to keep the current customers purchasing and
using the service and repeating using service. Moreover, for Vietnamese, the
more loyalty a customer has toward a certain brand, the more chance that brand
is introduced to new customers via the “word-of-mouth”. In response to this
issue, companies tried launching attractive promotions in order to attract the
loyalty of customers for their products.
Customer loyalty for a brand that speaks to the trend of customers to buy and
use brand in a product family and repeat this behavior (Chaudhuri 1999). Brand
loyalty plays important role in the success of the brand. So which brand create
higher customer loyalty, bring profit to the company as higher, which means
that this brand of high value (Aggarwal P (2004)
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Given the above mentioned situation, measuring customers’ perception for beer
brand equity becomes very important and necessary. It will be the basis for
improving the brand equity for beer industry. Research results contribute to
research on the basis of the theory of brand loyalty through understanding the
meaning of the factors that affect consumer loyalty to the brand. Thereby, the
results also provide for investor how to keep customers loyal to the brand,
which is why this study performance, results of topics beer companies can be
used
1.3 RESEARCH OBJECTIVES
The overall objective of this research is to measure the loyal of customer based
brand equity for beer industry on Viet Nam, then to develop the specific
program to improve it.
Specific objectives in this research are as follows:
To identify the impacts of Brand Equity components (Brand Awareness,
Perceived value, Brand Image) on the Brand Loyalty in beer industry on
Viet Nam.
1.4 SCOPE OF STUDY:
This study will be mainly based on the customer-based perspective of
Brand Equity only. The financial perspectives of the brand equity are
beyond our scope of study. The research was narrowed down to Ho Chi
Minh City.
This study focus drinker. Owner, shop, wholesaler only reference to
establish questionnaire.
Focus on brands have same level premium: Heineken, Sai Gon special ,
Sapporo, Gambrinus, Tiger.
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This study will consist of two main parts which assigned individually to
each author. Part 1 focus on the creation of information, data analysis;
part 2 will be the improving program based on these findings.
1.5 SIGNIFICANCE
Research results will determine the factors affecting brand loyalty. Since then
the manager have plan to develop appropriate strategies to promote their
products to consumers more and more widely.
1.6 STRUCTURE OF THE THESIS STATEMENTS
The structure of this research report consists of five chapters. Chapter 1
introduces the overview of the research topic. Chapter 2 presents the theoretical
basis of the concepts involved, theoretical modeling with the proposed
hypothesis. Chapter 3 presents the research methodology to test the scale and
theoretical models offered. Chapter 4 presents the results of the implementation
of the testing and analysis of information and data from which to draw
conclusions for the research hypotheses proposed in Chapter 2. Chapter 5
summarizes the main results of the study, the contribution of management
theory and practice and also mentioned the limitations of research to guide
subsequent studies.
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CHAPTER 2: LITERATURE REVIEW & THEORETICAL
MODEL
First of all, key concepts in the current study such as Brand, Brand Equity,
Customer-based Equity, Brand Loyalty, Strategic Brand Equity Management
and their role and importance in business activities will be reviewed
2.1 BRAND
The term “brand” has multiple meanings and different perspectives. Kreutz
(2004) indicated that Brand identified products and services, but a brand was
much more than a brand name or a brand logo on a brand-name product. He
also suggested further that brands reflect individual and collective desires that
go far beyond a product’s utilitarian benefit. Otherwise, he further explained the
brands to be presented by signs and symbols, gestures and images.
From service perspective, Blankson and Kalafatis (1999) suggested the service
brands are particularly different from product brands in which characteristics of
services brand are different from those of physical goods and they relied on
employees’ actions and attitudes.
From the financial perspective, according to Murphy (1990), a brand was not
only an actual product, but the unique property of a specific owner. It has been
developed over time so as to embrace a set of tangible and intangible attributes
that appropriately different products.
In general, there are two main viewpoints about brand, namely traditional view
and synthetic view.
2.1.1 Traditional viewpoint of Brand:
The American Marketing Association (AMA) defines a brand as a name, term,
sign, symbol, or design, or a combination of them, intended to identify the
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goods and services of one sellers or group of sellers and to differentiate them
from those of competition ( in Tho et al, 2002).
From this viewpoint, brand is understood to be one component of products and
main character of brand are used to differentiate this product from other
product. Example, in some cases, the company name was essentially used for
all products as with General Electric and Hewlett- Packard. In other cases,
manufacturer assigned individual brand names to new products that were
unrelated to the company name as with Proctor & Gamble.
2.1.2 Synthetic viewpoint of Brand:
Brand is not only a name or logo or sign but it is much more complicated
(Davis, 2002). In this viewpoint, product is only a component of brand and so
products, price, distribution, promotion are components of brand (Amber and
Styles, 1996)
This view has been increasingly applied and accepted by researchers and in
practice also.
The fact is that customers have two needs including functional needs and
emotional needs. Product could only provide the functional needs for
customers, while brand could provide both functional needs and emotional
needs for customers. This is the explanation for why brand has been replacing
products in marketing activities of most companies nowadays.
2.2 BRAND EQUITY
Brand equity has been considered in many contexts: the added value endowed
by the brand name (Farquhar, 1989). This concept is defined from different
perspectives by many authors around the world. In general sense, according to
Keller (1991), Brand Equity is defined in terms of marketing effects uniquely
attributable to the brand, e.g., when the different outcome result for a product or
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service because of its brand name as compared to if the same product or service
did not have that name.
Aaker (1991) defines brand equity as a set of brand assets and liabilities linked
to a brand, its name and symbol, that add to or subtract from the value provided
by a product or service to a firm and/or to that firm’s customers.
In other word, brand equity is the incremental value of a product due to the
brand name (Srivastava and Shocker, 1991)
According to some leading authors in brand management (Keller, Aaker,
Lassar, Srivastava, Shocker, Prasad and Dev ...), brand equity can be studied
from different viewpoints:
Customer-Based perspective ( Keller,1993; Aaker,1996)
The importance of understanding brand equity from customer’s point of
view is explained by Keller (1993) as positive customer based brand equity
can lead to a greater revenue, lower costs, and higher profit, it has direct
implications for the firm’s ability to command higher prices, customer’s
willingness to seek out new distribution channels, the effectiveness of
marketing communications, and the success of brand extensions and
licensing opportunities.
Financial perspective (Srivastava and Shocker, 1991, Kim et al , 2003)
Brands are increasingly considered primary capital in many businesses. The
notion that a brand has an equity which exceeds its conventional asset value
has been developed by financial professionals (Kim et al, 2003). The
financial perspective is based on the incremental discounted cash flows that
would results from a branded product’s revenue over the revenue of an
unbranded product (Simon and Sullivan, 1993).
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Some studies have found that a product’s brand equity positively affects
future profits and long-term cash flow (Srivastava and Shocker, 1991).
Combined perspective (Dyson et al,1996; Motameni and Shajroki,1998)
Brand equity therefore is a broad concept and has various perspectives.
However, due to the scope of the study and the main reason in which I have
to identify where they are in the eyes of the customers, so , this research will
only focused on the first perspective (i.e. customer - based brand equity -
CBBE).
2.3 CUSTOMER-BASED PERSPECTIVE OF BRAND EQUITY
Keller (1991) defined Customer-Based Brand Equity (CBBE) as the different
affects that knowledge about the brand has on consumer’s responses to
marketing activities for the brand. He also mentioned that Customer-Based
Brand Equity involved how customers react to company’s marketing mix action
for a given brand, as compared to how they react if the same actions were
attributed to a hypothetical or unnamed version of the product or service.
Customer-Based Brand Equity happens when the customers get used to with the
brand and hold some favorable, strong, and unique brand associations in
memory (Keller, 1991)
Keller (1993, 1998) also suggests that brand equity is customers’ knowledge
and Customers’ knowledge included two main components, namely brand
image and brand awareness.
Aaker (1996) defined brand equity as a set of brand assets and liabilities linked
to a brand- its name and symbol-that adds to or subtracts from the value
provided by a product or service to a firm or to the firm’s customers. In another
way, Blackstone (1995), considered brand equity as brand value and brand
meaning, where brand meaning implied brand saliency, brand associations, and
brand personality, and where brand value was the outcome of managing the
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brand meaning. Keller (1993) also defined it as the differential effect of brand
knowledge on consumer response to the marketing of the brand.
Lassar et al (1995) operationalised brand equity as the enhancement in the
perceived utility and desirability that a brand name confers on a product. Lassar
(1995) proposed 5 components of brand equity including perceived quality,
perceived value, brand awareness, brand trustworthiness and brand
commitment.
Lassar further suggested that CBBE included only perceptual dimensions,
excluding behavioral or attitudinal dimensions such as usage intention or
loyalty. Unlike others, Aaker(1991) suggested main components for CBBE:
brand loyalty, brand awareness, perceived quality and brand image.
With different viewpoints on the brand equity described above, it can be seen
that brand equity is a complicated concept which consists of many components,
and, possibly these components could include various sub-components. Many
authors have the same approach to the brand equity components: most of them
admit the presence of brand awareness and perceived quality in brand equity.
However, there are still some different viewpoints among the authors, for
example Lassar believes perceived value, brand trustworthiness and brand
commitment are other dimensions in brand equity concept, but for Aeker,
brand loyalty and brand image are the other components.
There is an indirect approach and a direct approach to measure consumer-based
brand equity (Keller, 1993). The direct approach requires measuring brand
awareness and the characteristics and relationships among brand associations.
Brand awareness can be assessed effectively through a variety of aided and
unaided memory measures that can be applied to test brand recall and
recognition. Brand associations can be measured by qualitative techniques such
as free association tasks that lead customers to describe what the brand means
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to them, projective techniques such as sentence completion, and picture
interpretation, and brand personality descriptors. The direct approach, however,
requires experiments in which one group of customers responds to an element
of the marketing program when it is attributed to the brand and another group of
consumers responds to that same element when it is attributed to a fictitiously
named or unnamed version of the product or service (Kim et al, 2003)
The components of brand equity are different from one industry to other
industry. In the scope of this research for beer industry, we would mainly base
the brand equity concept suggested by Aaker whose components have been
broadly accepted and employed by many researchers (Keller, 1993; Low and
Lamb, 2000; Prasad and Dev, 2000; Yoo and Donthu, 2001). Also, we would
argue for the presence of one more component, brand affinity, which was
suggested by Ajzen & Fishbein in 1980 Also, a recent study for customer
behavior toward different shampoo in Vietnamese market, Dr Nguyen Dinh
Tho and Nguyen Thi Mai Trang (2002) proposed a model as hereunder:
Brand Perceived
Awareness Quality
Brand Loyalty
Brand Affinity
According to this model, Brand Loyalty is a component of Brand Equity.
However, it seems to become the results of interrelationships among these
components.
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Therefore, we suggest that the Customer-Based Brand Equity’s components for
the case of beer industry will include Brand Image, Brand Awareness and
Perceived Value. Brand loyalty will become the result of Customer-Based
Brand Equity.
2.3.1 Brand Image
According to Keller (1998), brand image is defined as perceptions about a
brand as reflected by the brand associations held in consumer memory. Besides
marketer-controlled sources of information, brand association can also be
created in variety of other ways: by direct experiences, from information
communicated about the brand from the firm or other commercial or
nonpartisan sources, word of mouth; and by assumptions or interferences from
the brand itself (e.g, its name or logo) or from the identification of the brand
with a company, country, channel of distribution, or some particular person,
place or event.
To Keller (2000), to increase brand image of a company, it is necessary focus
on improving its brand associations as follows:
Strength of brand associations: the more deeply a person thinks about
product information and relates it to existing brand knowledge, the stronger
the resulting brand associations. Two factors facilitating the strength of
association to any piece of information are the personal relevance of the
information and the consistency with which this information is presented
over time.
The next strongest associations are likely to be formed on the basis of word
of mouth or other noncommercial sources of information. Word of mouth is
likely to be particularly important for service industry (restaurants,
entertainment, banking, etc..).
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