UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ________________ Le Minh Hoang Long CUSTOMER ENGAGEMENT IN A FACEBOOK BRAND COMMUNITY: A study of Airline consumers in Vietnam ID: 22130038 MASTER OF BUSINESS (Honors) SUPERVISOR: DR. NGUYEN THI MAI TRANG Ho Chi Minh City, Year 2016 TIEU LUAN MOI download : skknchat@gmail.com Acknowledgement Firstly, I would like to express my gratefulness to my supervisor Dr. Nguyen Thi Mai Trang for her professional guidance, intensive support, valuable suggestions, instructions and encouragement during the time of doing my research. I would like to express my deepest gratitude to ISB Professors Committee for their valuable time as the members of the proposal examination committee.
Their comments and meaningful suggestions were contributed significantly for my completion of this research. My sincere thanks are given to all of my teachers at International Business School – University of Economics Ho Chi Minh City for their teaching and guidance during my master course. i TIEU LUAN MOI download : skknchat@gmail.com Abstract Customer engagement is a group of factors that can affect the customer satisfaction, loyalty. The advent of Web 2.0 and in particular the social network media in recent years have led to an explosion of interest in customer engagement.
Attracted by a great amount of users, companies have created brand communities in social networks. With the abilities to creating the interaction among individuals and firms in brand communities, social media can use to better serve customer and satisfy the needs. In Vietnam, former researches measuring the loyalty and satisfaction of customers engaged in social networking sites, such as Facebook, are still rare. This research aims to fill this gap by testing these hypotheses in airline industry and raising recommendations for its applications in practice.
Key words Customer engagement, brand community, facebook, customer loyalty, customer satisfaction. ii TIEU LUAN MOI download : skknchat@gmail.com CONTENTS Acknowledgement. i List of Figures. vi List of Tables.
1 Statement of the problem. 7 Structure of the research. 9 Online brand community (OCB). 10 Customer engagement in brand community.
12 Perceived relationship benefits of customer engagement in brand communities. 12 Relationship outcomes of customer engagement in brand communities. 14 Proposal model and hypotheses. 24 iii TIEU LUAN MOI download : skknchat@gmail.
Main survey - Quantitative research. 27 Data analysis and results. 28 Data statistical analysis. 28 Cronbach’s alpha reliability test.
29 Exploratory factor analysis (EFA). 32 Reliability test after EFA. 36 Modified Model and Hypotheses. 36 Testing research model using structural equation modeling (SEM).
Confirmatory factor analysis (CFA). Structural equation model. 46 Conclusion and implication. 48 Key findings and research contributions.
Impact of customer engagement behavior. Customer engagement behaviors. Perceived relationship benefits. 51 Limitations and future research.
52 APPENDIX 1: List of in-depth interview’s participants. Maximum Likelihood Estimates. 77 iv TIEU LUAN MOI download : skknchat@gmail.com List of abbreviations ATAG Air Transport Action Group BC Brand Community CE Customer engagement CEB Customer engagement behavior IATA International Air Transport Association JPA Jetstar Pacific Airlines OCB Online brand community VJ VietJet Air VNA Vietnam Airlines v TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURES Figure 2. The conceptual Model.
The Research Process. The Revised Model. The structural model result .43 vi TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table 3. Source of measurement scale.
Sources of data collection. Description of sample. Cronbach’s alpha results. Retest Cronbach’s alpha results.
Pattern Matrix – EFA first round. Pattern Matrix – EFA last round. Cronbach's alpha of new measurements. Composite Reliability and Average Variance Extracted.
Discriminant validity test. Fitness of conceptualized model. Result of hypothesis testing. Standardized regression weight of hypothesis .44 vii TIEU LUAN MOI download : skknchat@gmail.com INTRODUCTION Research background The globalization of competition, saturation of markets, and development of information technology have enhanced customer awareness and created a situation where long-term success is no longer achieved through optimized product price and qualities.
Instead, companies build their success on a long-term customer relationship by satisfying customer’s needs and transferring customers to loyal customers. In recent years, customer engagement has been viewed as a hot issue to build long-term customer relationship (Sashi, 2012). Customer engagement (CE) is difined as “the engagement of customers with one another, with a company or a brand. The initiative for engagement can be either consumer- or company-led and the medium of engagement can be on or offline.
Customer engagement can be the variety activities as joining the brand’s fan group, take part in brand’s contest, disscussing about products or like brand’s facebook, commenting on website, etc. Firms that have more engagement of customer can improve customer satisfaction and loyalty (Brodie, Ilic, Juric, & Hollebeek , 2011; Gummerus, Liljander, Weman, & Minna, 2012). Customer engagement (CE) generate enhanced corporate performance, including sales growth (Neff, 2007 as cited in Brodie et al., 2011), and profitability (Voyles, 2008 as cited in Brodie et al. As a result, customer engagement becomes a competitive advantage in the globalization economic.
Aviation is one of the most important aspects of global economic nowadays. Aviation provides the rapid worldwide transportation network, which makes it essentials for global business and tourism. The total value of goods transported by air represent 35% of all international trade and 52% of international tourists travel by air (ATAG, 2014). Come up with the globalization process, airlines industry is in the difficulty situation.
Volatile fuel pricing, intense competition, security concerns and a focus on the environmental impact of air travel have resulted in airline profitability taking a nosedive. Therefore, increasingly airlines are looking to have a far more direct and real-time connection with their customers and prospective customers. Leung, Schuckert and Yeung (2013) state that social media is a suitable tools for marketing purpose in the airlines bussiness. In the global trends, the social 1 TIEU LUAN MOI download : skknchat@gmail.com networks are increasingly replacing traditional media for marketing and communications.
They have become a major factor in influencing various aspects of consumer behavior including awareness, information acquisition, opinions, attitudes, purchase behavior, and postpurchase communication and evaluation (Mangold & Faulds, 2009). The application of social media and web 2.0 is changing the communication between business and consumer and consumer to consumer significantly (Au, 2010; Jones & Yu, 2010). This reality is shown by airlines’ increasing social media engagement of customers (Kepes, 2014). With airline industry, social media is playing an increasing important role in daily operations (NIIT, 2013).
Passengers are increasingly using the web and mobile devices to research, book and pay for trips. AITA (2014) reports that more than 50% passengers go online to book flights. From the airlines side, the world airline industry is switching to promoting booking deals and flight promotions on Facebook and other social media websites. For examples, passengers can book their flights via Facebook or Twitter on KLM Royal Dutch Airlines, JetBlue or Virgin America (Consumerreports.
This new trend put airlines in the effort of building customer engagement to firms’ social media. In Vietnam, air service industry affected economic growth significantly. According to the statistics of IATA by Tyler (2014) - IATA’s Director General, Vietnam’s aviation market is forecast to be the world’s 7th fastest-growing in the period of 2013-2017, with annual growth rates of 6.6 percent expected for international passengers (Tyler, 2014). In the trend of transitioning and developing Vietnam’s economy, a restructuring plan of Vietnam’s air service industry was approved by the Ministry of Transport aim to gain the 5th position in ASEAN aviation market and raise the passengers carried by airlines achieving 3.23% of all overall the domestics transport market share (Viet Nam Government Portal, 2015).
Hence, there is a tough competition between airlines companies from the time government authorized the operation of private airlines as the commitment between Vietnam and WTO in 2007. Up to now, there are four major air carries in Vietnam: Vietnam Airlines (VNA), Jetstar Pacific Airlines (JPA) and VietJet Air (VJ) and Vietnam Air Services Company (VASCO) (Civil Aviation Administration of Vietnam, 2015). Customers have choices to 2 TIEU LUAN MOI download : skknchat@gmail.com choose airlines when traveling in domestic routes. This competition leads to the result that airline companies must find the effective ways to attract and retain customers.
As per the statistics by Moore Online Development Solutions Corporation, Vietnam has the population of 90.73 million with 39% internet users. 40% internet users use online brand website to make purchasing decision (Moore Corporation, 2015a). Therefore, the understanding on role of social media affecting to the Vietnam airline industry becomes important than ever. Besides, social networking sites such as Facebook, YouTube, or LinkedIn are playing more important roles in business.
According to Chui, Manyika, Bughin, Dobbs, Roxburgh, Sarrazin, and Westergren (2012) there are 70% companies advocated social media technologies to transform businesses and improve organizational performance. The application of social media affects the ways company and in particular airlines company doing business. In the report of We are social (2015) facebook is reviewed to become the world largest social media platform with 1,366 million users in Q1, 2015. Besides, in the academic aspect, Gummerus, Liljander, Weman and Minna (2012) have indicated facebook brand community offer both firms and customers new ways to engaged with each other.
They pointed out that customer engagement in a facebook brand community is the group of people who engaged into a specific brand by clicking “Like” on its Facebook fan page. Customer as a fan page’s member easy to follow information, to read and write comments, to share experiences, to complain to the brand owner as well as to communicate with other members of that fan page. Companies who encourage customer engagement in their facebook brand community will lead to purchase behavior, customer satisfaction and customer loyalty (Gummerus, Liljander, Weman, & Minna, 2012). In fact, Facebook is emerging as the largest social media networks in Viet Nam.
It is the most popular social platforms with 31.3 million users, make up 94% of social network account ownership (Moore Corporation, 2015a). 33% Vietnamese passengers research information before trip on social media (Moore Corporation, 2015b). This situation creates an environment to airline’s marketers for touching with this community. Airline companies started to build their facebook fan page for so that customers can follow their information and 3 TIEU LUAN MOI download : skknchat@gmail.com directly interact with them.
With the tendency of opening airlines market and the more competition, Vietnam airline companies should concern about the issue of attracting customer engagement to their facebook brand community to gain customer satisfaction, customer loyalty and good business performance. Statement of the problem Customer engagement has emerged in the last few years as a topic of great interest to managers and consultants in diverse industries and companies worldwide (Sashi, 2012). This issue has been discussed in many researches (see e.g Bowden, 2009; van Doorn et al., 2010; Roberts & Alpert, 2010; Brodie et al., 2011; Fliess, Nadzeika & Nesper, 2012). All these disscussions generally have the deep understanding in customer engagement and the important of customer engagement in achiving bussiness growth.
Customer engagement create the deep connections with customers that drive purchase decisions, interaction with firms (Forrester Consulting as cited in Sashi, 2012). A customer's engagement in a brand community results in a number of outcomes for firms’ growth, including the customer's continuing participation in the community, satisfaction, increased trust in, commitment and loyalty (Wirtz et al., 2013; Brodie et al. The advent of Web 2.0 and in particular the social network sites (like My space, Facebook, Google plus) in recent years have led to an explosion of interest in customer engagement. Attracted by a great amount of users, companies have created brand communities in social media.
With the abilities to creating the interaction among individuals and firms in brand communities, social media can use to better serve customer and meet the needs .