Ministry of Education and Training University of Economics HoChiMinh City ---------------- Nguyễn Thanh Trung MEASURING CUSTOMER-BASED BRAND EQUITY OF ENGLISH TRAINING CENTERS: EVIDENCE IN HOCHIMINH CITY ECONOMICS MASTER THESIS HoChiMinh City - 2009 TIEU LUAN MOI download : skknchat@gmail.com 1 Ministry of Education and Training University of Economics HoChiMinh City ---------------- Nguyễn Thanh Trung MEASURING CUSTOMER-BASED BRAND EQUITY OF ENGLISH TRAINING CENTERS: EVIDENCE IN HOCHIMINH CITY Major: Business Administration Major Code: 60.05 ECONOMICS MASTER THESIS Supervisor: Dr. Trần Hà Minh Quân HoChiMinh City - 2009 TIEU LUAN MOI download : skknchat@gmail.com 1 Acknowledgement I would like to express my heartfelt gratitude and deepest appreciation to my research Supervisor, Dr. Tran Ha Minh Quan for his precious guidance, share of experience, ceaseless encouragement and highly valuable suggestions throughout the course of my research. I would like to extend my sincere thanks to Assistant Prof.
Nguyen Dinh Tho, the chairman of the proposal examination committee and Dr. Vo Thi Quy, member of the proposal examination committee, for their valuable comments and constructive suggestions. My special gratitude is extended to all instructors and staff at Faculty of Business Administration and Postgraduate Faculty, University of Econimics HoChiMinh City (UEH) for their support and the valuable knowledge during my study in UEH. I would also like to avail this opportunity to express my appreciation to Professor Nguyen Dong Phong and UEH Board of Directors for creating MBA program in English.
Specially, my thanks also go to Lecturer Ms Ly Thi Minh Chau for her comments of English from early draft of my thesis. Many thanks to Ms. Dang Hai Yen, Mr. Lam Hong Phong, as well as the other classmates in MBA class, Batch 16 for their valuable and enthusiastic support for this research study.
Last but not least, the deepest and most sincere gratitude go to my beloved parents, my wife, my sons, my nieces, my nephews and my closest friends for their boundless support, abundant love and encouragement throughout my period of study. I, therefore, dedicate this work as a gift to them all. TIEU LUAN MOI download : skknchat@gmail.com 2 Abstract Strong brand equity is significantly correlated with success for English Training Centers (ETC). In a study 318 respondents gauged the strength of four ETC brands doing business in HoChiMinh City, Vietnam.
The internal relationship between the individual dimensions of customer-based brand equity (CBBE) and applicability of the suggested CBBE scale on the ETC industry have been examined in this study. One unusual finding was that five component perceived quality scale of Parasuraman (1988) is not applicable. A perceived quality scale including only two components: tangibles and assurance was suggested and the assurance component dominated on the relationship to brand loyalty. One other unusual finding was that although brand equity comprises all four dimensions being tested, awareness showed the smallest and non-significant effect on brand loyalty.
Dividing the ETCs into high tuition fee group and low tuition fee group, the researcher found that learners differentiated all four dimensions of CBBE between the two groups. The most of attributes of dimensions had significant mean diference, while other attributes did not. Keywords: brand equity; brand image; brand loyalty; brand awareness; perceived quality; assurance; tangibles; English training center TIEU LUAN MOI download : skknchat@gmail.com 3 Contents Acknowledgement. 3 List of Tables.
5 List of Figures.4 Scope and Limitation .6 Implications of research.7 Structure of the study .1 Aaker’s conceptualization of brand equity .2 Keller’s conceptualization of brand equity .4 The measurement of Customer-Based Brand Equity.5 Relationships between brand loyalty and other dimensions of CBBE .2 Operationalization of measures. 53 TIEU LUAN MOI download : skknchat@gmail.3 Data analysis techniques .2 Descriptive statistics of sample.2 Characteristics of sample .3 The construct measurement scales.4 The assessment of customer-based ETC brand equity construct.5 The assessment of the hypotheses.1 Brand equity rating. Conclusion and Implication .2 Conclusions from the research questions.3 Discussion of the research findings .4 Contributions of the research findings.5 Implications of the research .6 Limitations of the research and further research. 99 List of References.
106 TIEU LUAN MOI download : skknchat@gmail.com 5 List of Tables Table 1. 1 The structure of the study. 1 Summary of hypotheses. 1 Research questions and research hypotheses.
2 Measures of brand loyalty. 3 Measures of brand image. 4 Measures of brand awareness. 5 Measures of perceived quality.
6 The demographical status of participants. 7 The final questionnaire. 1 Response frequency of each brand. 2 Characteristics of respondents.
4 The result of EFA test with 31 items. 5 The result of EFA with 29 items. 6 The structure matrix of five factors. 7 Results of reliability test and EFA test for construct measurement scales.
8 Final construct measurement scales. 9 Dimensions of Brand Equity Structure. 10 Brand equity rating. 11 Brand equity ranking.
12 The correlations among the dimensions of brand equity. 13 The results of linear regression analysis. 14 The t-test analysis results of four dimensions of brand equity. 15 Mean differences of brand awareness between high- and low-tuition ETCs 79 Table 4.
16 Mean differences of tangibles component between high- and low-tuition ETCs. 17 Mean differences of assurance component between high- and low-tuition ETCs. 18 Mean differences of brand image between high- and low-tuition ETCs. 19 Mean differences of brand loyalty between high- and low-tuition ETCs.
20 The summary of the attributes having significant mean differences. 21 The attributes having significant mean differences between two groups. 1 Summary of testing results of hypotheses 4, 5, 6, and 7. 2 The summary of the attributes having significant mean differences.
3 Summary of testing result of hypothesis 8. 4 Summary of hypotheses testing results. 92 TIEU LUAN MOI download : skknchat@gmail.com 6 List of Figures Figure 1. 1 Structure of chapter 1.
2 The model of the relationship between brand loyalty and the other dimensions. 1 The structure of chapter 2. 2 The relationship between product and brand. 3 Two approaches to brand equity.
4 How Brand Equity Generates Value (Aaker 1996). 5 Dimensions of brand knowledge (Kevin Lane Keller 1993). 6 The conceptual model of customer-based brand equity. 7 The relationship between brand loyalty and other dimensions.
1 The structure of chapter 3. 1 The structure of chapter 4. 2 Sex of respondents. 3 Age of respondents.
4 The first stage of the assessment of the construct measurement scales. 5 The revised model of the relationship between brand loyalty and the other dimensions of brand equity. 1 Structure of chapter 5. 2 The results of linear regression analysis between brand loyalty and the other dimensions.
3 The revised model of relationship between brand loyalty and the other dimensions. 89 TIEU LUAN MOI download : skknchat@gmail.com 7 Chapter 1: Introduction 1.1 Introduction This chapter provides a general introduction for the current study, by drawing a general picture of the following chapters and the study as a whole, beginning with a general introduction in section 1.2 examines the research background, in which the gaps in the empirical studies on branding strategies are identified.3 defines the research questions and lists the research hypotheses. In addition, section 1.4 discusses scope and some limitations of the current study.5 briefly discusses the general aspects of research methodology such as research types and research design.6 provides implications of this study.7 introduces the structure of the study. The structure of chapter 1 is provided in Figure 1.
1 Structure of chapter 1 1.4 Scope and limitations 1.6 Implications of the study 1.7 Structure of the study TIEU LUAN MOI download : skknchat@gmail.2 Research background Branding and brand equity have been topics of interest to marketing researchers for many years (Krishnan & Hartline 2001). Traditionally, branding has been focused on tangible products, but in recent decades the focus has expanded to also include branding of services. Although branding of services has started to develop, this has not kept pace with the growth of the service sector overall. The growth of the service sector has led to increased competition where brand has become an important tool for gaining competitive advantages.
Branding plays a special role in service companies because strong brands increase customers’ trust of the invisible purchase. A strong service brand is essentially a promise of future satisfaction (Berry 2000). Some researchers have also argued that branding is more critical for services than for goods (Krishnan & Hartline 2001; Brady et al. A strong brand can help to reduce the risks associated with the purchase and consumption of many services.
Other advantages of a strong brand are for example that it creates better margins by adding value to the service, builds stable long-term demand and increases market share. Consequently, a strong brand offers many advantages in the service industry and when evaluating the strength of the brand, the concept of brand equity is used. Researchers have defined brand equity variously introducing different viewpoints, but there seems to be a basic agreement on the concept of brand equity. All these definitions imply that brand equity is the incremental value of a product due to the brand name (Kim et al.
Brand equity research in marketing has largely concentrated on customer perception (Kim et al. Keller (1993) defined customer-based brand equity as “the differential effect of brand knowledge on consumer response to the marketing of the brand”. Brand equity is a multidimensional concept (Aaker 1996a). Nowadays, it is no longer enough to brand a product just using its name, it is important that all the TIEU LUAN MOI download : skknchat@gmail.com 9 dimensions of brand equity are used in a consistent way in the marketing of the product.
An understanding of the brand equity dimensions/sources offers managers valuable insights into how brands endow value to the customers and the firm (Balaji 2009). Therefore the understanding about the extent of the contribution of each dimension to the brand equity of some industry is vital for brand managers to create sustainable competitive advantages in today’s competitive business environment through marketing strategies. On the other hand, a business is considered successful when that business reaches its goals in terms of revenue, market share, and brand equity. The results are usually created through customers’ brand loyalty.
Loyalty is the core of brand equity (Aaker 1996b). When customers are loyal to a brand for a product category, it would be expected that they would purchase the same brand of that product category on each purchase occasion. Managers have also rediscovered that the best kind of loyalty is brand loyalty, not price loyalty or bargain loyalty, even though as a first step it is useful to create behavioral barriers to exit (Kapferer 2008). It is well known that it is much more expensive to gain new customers than to keep existing ones, especially when the existing customer base is satisfied and loyal.
Moreover, loyal customers tend to provide brand exposure to new customers through “mouth to mouth” communication. Thus, brand loyalty creates value to the firm by reducing the marketing expenditure, creating strong brand affiliation and influences others through word-of-mouth (Balaji 2009). According to Moisescu (2006), a high degree of loyalty among customers provides the firm with a series of specific competitive advantages, loyalty having a strong positive effect in two main directions, reducing marketing cost and increasing the brand’s revenue. Still, brand loyalty can’t be analysed without considering its relationship to other descriptive dimensions of brand equity like awareness, perceived quality, or associations (Moisescu 2006).
Loyalty is of sufficient importance that other measures, such as perceived quality and associations, can often be evaluated based TIEU LUAN MOI download : skknchat@gmail.com 10 on their ability to influence it (Aaker 1996b). Thus, it is necessary to empirically examine the linkages between the brand loyalty and the other dimensions of brand equity. Along that line, in fact, brand equity is recently considered one of the top issues in the English training industry.