UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Truong Hong Ky KEY FACTORS INFLUENCE BRAND TRUST AND BRAND LOYALTY A STUDY ON SMARTPHONE CONSUMERS MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Truong Hong Ky KEY FACTORS INFLUENCE BRAND TRUST AND BRAND LOYALTY A STUDY ON SMARTPHONE CONSUMERS ID: 22110033 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr. Tran Ha Minh Quan Ho Chi Minh City – Year 2014 TIEU LUAN MOI download : skknchat@gmail.com Acknowledgement I would like to express my sincere gratitude to my supervisor, Dr Tran Ha Minh Quan for the valuable supervision, the support and encouragement he gave me. I would like to express my gratitude to my ISB class friends for thesis support and direction. Your encouragement, friendly guidance and critical comments have greatly contributed to this thesis.
Finally, I would like to thank all of the respondents without whom, this research would have been difficult to make. Truong Hong Ky July, 2014 TIEU LUAN MOI download : skknchat@gmail.com Abstract In each industry, there is a competition between companies to win customers’ trust and make them become loyal. Customers, after getting the satisfaction of the product/service they consume, come to ask for value, belief, social status and life style orientation that company/brand makes. When do customers become more loyal to the brand? The most important reason is that product or service meets their expectation and demand.
More than that, brand has to come with distinctive message and build a social status that customers need to fulfill their self- defining. This study is conducted to find out the key factors affect brand loyalty and brand trust. This context of this research is technology equipment smartphone. The factors found have explaind how customers maintain loyalty with smartphone product.
The results indicate all dependent factors : (1) Brand Identity (BI), (2) Brand Identification (BID), (3) Customer Satisfaction (CS) have significant impact on dependent variavles (4) Brand Trust (BT) and (5) Brand Loyalty (BL). Brand Trust also has strong impact on Brand Loyalty. The last part of this study gives some recommendation to brand executives and marketing practitioners to gain trust and win loyalty of customers. TIEU LUAN MOI download : skknchat@gmail.com Tables Of Content 1.6 Structure Of Thesis 4 2.1 Brand and Brand Loyalty 5 2.4 Brand Identity and Brand Identification 9 2.1 Kapferer’s Brand Identity vs Brand Image 9 2.2 Brand Identity in other research journal 10 2.5 Research Model and Hypothesis 12 3.3 Data Analysis Method 21 3.1 Source of Data Summary 21 3.3 Data Analysis Method 22 4.
Research Result And Discussion 24 4.1 Descriptions of Sample 24 4.2 Measurement Scale Assessment 28 TIEU LUAN MOI download : skknchat@gmail.3 Exploratory Factor Analysis 30 4.1 EFA Analysis results for measurement scales of independent factors (Brand Identity, Brand Identification, Customer Satisfaction) 31 4.2 EFA Analysis results for measurement scales of dependent factor (Brand Trust, Brand Loyalty) 33 4.4 Multi-Linear Regression Analysis for hypothesis testing.1 Checking Regression Assumptions 35 4.1 Testing hypothesis on the impact of independent factors on Brand Trust 39 4.2 Testing hypothesis on the impact of independent factors on Brand Loyalty 40 4.1 Regression analysis result 42 4.2 Brand Identity Finding 42 4.3 Brand Identitfication Finding 43 4.4 Customer Satisfaction Finding 43 4.5 Brand Trust Finding 43 4. Conclusions and Implications 45 5.4 Contribution of the study 47 5.1 Contribution of theory 47 5.2 Contribution to practical 47 5.5 Limitation 47 Reference 49 Appendix TIEU LUAN MOI download : skknchat@gmail.consumers LIST OF TABLE Table 1: List of Hypothesis 15 Table 2: Summary of the concept studied 16 Table 3: Descriptive Statistics of Sample 21 Table 4: Description Table 26 Table 5: Reliability Analysis Results 28 Table 6.1: Correlation Matrix 31 Table 6.2: EFA Analysis for independent variables after running 31 Table 6.3: Total Variance Explained for independent factors 32 Table 6.4: Rotated Component Matrix for independent variables 32 Table 7.1: EFA Analysis for dependent variables after running 33 Table 7.2: Total Variance Explained for dependent factors 33 Table 7.3: Rotated Component Matrix for dependent variables 34 Table 8: Collinearity Statistics for two dependent variables 35 Table 9.1: Multiple Regression result with dependent Brand Trust 39 Table 9.2: Research Result of what positively influence Brand Trust 40 Table 9.3: Multiple Regression result with dependent Brand Loyalty 40 Table 9.4: Research Result of what positively influence Brand Trust 42 LIST OF FIGURE Figure 1: Proposed Research Model 16 Figure 2: Research Process 19 Figure 3.4: Job Position 25 Figure 3.6: Brand Used 26 Figure 4.1: Normality of the residuals 37 Figure 4.2: Histogram 38 Figure 5 : Research Regression Result 44 TIEU LUAN MOI download : skknchat@gmail.consumers Chapter 1: Research Formulation This chapter indicates the context of this study, including a short introduction of smartphone industry in Vietnam, the purpose of this study, research problem statement, research scope and methodology.1 Background Vietnam smartphone market is growing fast. According to Vietnamese Online Jounal of Investment, in December of 2013, the International Market Rearch GFK showed a result that Vietnam’s smartphone market has the rapid growth in the South-East of Asia. Referring to the result, after 9 months of 2013, the growth rate of this market in Vietnam is 156% to 2012.
According to Google statistics, at the end of quarter 2 of 2013, the number of smartphone users in Vietnam is 17 millions. This number is rising in the near future. In the middle of 2013, the proportion of smartphone among handphone device is 38%. (*) This technology industry attract millions of consumer.
Smartphone becomes a very convenient product with many useful features. A good looking and high-rated smartphone is an image of life style. In October of 2013, at a Technology Conference, Thinh Pham, Wada Technological Application Buider Representative, stated that we are watching the age of smartphone. Many significant facts are shown.
First, smartphone users in Vietnam takes 20% of Vietnam population. Second, smartphone is the popular device to access Internet in Vietnam. 60% of smartphone users tend to shop online, 97% of them search for information. Smartphone users tend to access Internet and social media(**).
Smartphone industry turns to be impactful and so potential. In addtion, as the price of a smartphone has become reasonable, smartphone segment can attract more potential consumer in low-price market. (*): Retrieved from: http://www.vn/thi-truong-smartphone-viet-mieng-banh-beo- bo.html (**): Retrieved from: http://vietnamnet.vn/vn/cong-nghe-thong-tin-vien-thong/136651/google- -17-trieu-nguoi-vn-dang-dung-smartphone.html 1 TIEU LUAN MOI download : skknchat@gmail.consumers Within the smartphone market in Vietnam, the competition between handphone producers/brands become more fiere and vigorous. The prestigous world-wide handphone producers Apple, Samsung, Nokia, LG, HTC… is competing to take over the market of Vietnam.
Many new-comers like Huawei and Oppo try to get into this potential market. Some China producers also launch product targeting low-price market. This industry keeps on growing fast and the penetration phase is almost over. In order to maintain competitive advantage, smartphone company has to invest a lot on R&D to meet many new demands of consumer and follow the technology innovation which keeps changing over time.
As the result, top brand also introduce their newest products to the consumer in Vietnam as the same time as in other potential markets. Every quarter of the year, consumer see many new products launched. Consumer now have many choices for choosing a smartphone more than ever. They are easy to find a smartphone with practical features and inexpensive price.
The switching cost is not so high to change from a brand to another. In 2014, smartphone users tend to look for big screen design and practical function for checking health… Price of a premium smartphone is also going down and become less expensive than before (***) Besides getting along in the R&D race, main effort of company/brand is to encourage the consumer to buy their product and maintain their loyalty. There comes the question that, standing before a many products and brands, what would make the consumer confident to make the dicision of buying or re-purchasing? One perspective is that with a strong platform/core value, reasonable price, good after-sale service, a brand can win the market. Other perspective is that consumer tend to buy the brand that is believed to be prestigeous.
Some people say they base on their acquaintances’ suggestion and advice to make decision. (***): Retrieved from: http://tuoitre.vn/tin/tuoi-tre-cuoi-tuan/cuoc-song-muon- mau/20140927/xu-huong-di-dong-2014-thong-minh-hon-nua-re-hon-nua/650848.html 2 TIEU LUAN MOI download : skknchat@gmail.2 Research Problem All the top management executives have to find way to make the company profitable and hold on its competitive advantage. They have to learn their consumer, generate more sale of their product/service and build their brand stronger over time. Business administration starts with the organization’s vision and mission and develops with functional department operation.
Marketing department has a role to help build the core value of company, brand and convey that brand message to customers. One way to achieve competitive advantage success of a company/brand is how they differentiate themselves in profitable way. Consumer will consider purchasing and re-purchasing product/service based on their confidence, trust and the degree of loyalty in the company’s brand name. In another word, customer has believe that the product or service under that brand name must perform well and satisfy their needs.
So companies, marketers and brand executives have done many research and learnt the concept of customer satisfaction, customer loyalty and customer’s perceived value. Today, customers not only get influenced by company’s promotional programs but also interact with company and other customers. Trust and perceived value drive customers to make recommendation and participate in the development of the company. Brand loyalty and trust plays an important role for company success.
The more loyalty customers are generated, the higher value and more profitable that brand would build to company. As in such a rapid-changing industry like smartphone one, facing the competition over time, studying of brand loyalty is necessary. In conclusion, each company/brand should find out what to satisfy their customers and make them become loyal. Company and brand executives are required to measure customers’ brand value perception.
This research is tailored in the smartphone product segment. The research result contribute to the technology company the way to keep customers loyal to their brand. Company will also know how they would positioning their brand inside customer’s mind. 3 TIEU LUAN MOI download : skknchat@gmail.3 Research Objective The thesis is to study brand trust and brand loyalty concept and the factors that impact on brand trust and brand loyalty.
Specific objective in this research is to examine the impact of the construct Brand Identity, Brand Identification, Customer Satisfaction on Brand Trust and Brand Loyalty. The industry in which this research design is made to study customer’s brand loyalty is technology product – smartphone.4 Research Scope This research study is mainly based on the customer-viewed perspective of the brand they consume. Research scope is narrowed down into Ho Chi Minh City smartphone users. As the focus of this study is on smartphone consumers, technology company’s brand executive is outside of the scope.
Some specific research questions are below: What constructs brand trust and brand loyalty? Discussed managerial implication should be integrated for company? 1.5 Significance Research results will indicate the factors that impact on brand trust and brand loyalty. Company and the marketing managers can base on that to build optimized brand strategy to win the share of voice and make their company more profitable.6 Structure of thesis The research report consists of five chapters. Chapter 1 introduces the overview of the research topic. Chapter 2 revises the concepts to study, literature review, research model and hypothesis stated.
Chapter 3 presents the research methodology to test the measurement scale and run the research model given. Chater 4 shows the result of the implementation of the testing and data analysis. In this chapter, conclusion is drawn.