MINISTRY OF EDUCATION TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ----oOo------- HUỲNH KIM PHỤNG THE EFFECTS OF MARKETING COMMUNICATON ON BRAND EQUITY Major: Business Administration Major Code: 60. TRẦN HÀ MINH QUÂN Ho Chi Minh City - 2011 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENT ACKNOWLEDGEMENTS………………………………………………………. Research methodology and scope…………………………………………. Structure of the research report…………………………………………….
LITERATURE REVIEW AND RESEARCH MODEL…. The elements of marketing communication…………………………………9 2. Field Support Activities…………………………………………….12 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Measurement scale development………………………………………….
Measurements of brand awareness…………………………………19 3. Measurements of perceived quality………………………………. Measurements of brand loyalty……………………………………. Measurements of attitudes toward advertising spending………….
Measurements of attitudes toward field support activities………. Measurements of attitudes toward sales promotion……………….28 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Measure reliability check…………………………………………………. Exploratory factor analysis (EFA)…………………………………………31 4.
Examination research model by multiple regression………………………36 4. Examination the effects of advertising spending, field support activities and sales promotion on brand awareness………………………………. Examination the effects of advertising spending, field support activities and sales promotion on perceived quality………………………………37 4. Examination the effects of advertising spending, filed support activities and sales promotion on brand loyalty………………………………….
DISCUSSION AND CONCLUSION……………………. Marketing communication elements and building brand equity…………. Limitation and future research…………………………………………….46 APPENDIX TABLE Table 2.1: Structural model – Relationship between some key elements of marketing communication and brand equity………………………………………13 Table 3.16 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.3: Measurement scales for brand awareness…………………………….4: Measurement scales for perceived quality…………………………….5: Measurement scales for brand loyalty…………………………………20 Table 3.6: Measurement scales for attitudes toward advertising spending……….7: Measurement scales for attitudes toward field support activities…….8: Measurement scales for attitudes toward sales promotion…………….1: Sample Characteristics…………………………………………………28 Table 4.2: Cronbach’s Alpha coefficient for the used measurement scales……….3: Total Variance Explained – elements of marketing communication….4: Rotated Component Matrix(a) – elements of marketing communication…………………………………………………………………….5: Total Variance Explained – elements of brand equity…………………33 Table 4.6: Rotated Component Matrix(a) – elements of brand equity…………….7: New Variables Computed…………………………………………….8: Model Summary – Marketing Communication and Brand Awareness…………………………………………………………………………37 Table 4.9: ANOVA (b) – Marketing Communication and Brand Awareness……37 Table 4.10: Coefficients (a) – Marketing Communication and Brand Awareness…………………………………………………………………………37 Table 4.11: Model Summary – Marketing Communication and Perceived Quality…………………………………………………………………………….39 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.12: ANOVA (b) – Marketing Communication and Perceived Quality…………………………………………………………………………….13: Coefficients (a) – Marketing Communication and Perceived Quality…………………………………………………………………………….14: Model Summary – Marketing Communication and Brand Loyalty…………………………………………………………………………….15: ANOVA (b) – Marketing Communication and Brand Loyalty………41 Table 4.16: Coefficients (a) – Marketing Communication and Brand Loyalty…………………………………………………………………………….17: Hypothesis and research results………………………………………42 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Page 1 of 52 ACKNOWLEDGMENTS The author would like to thank Dr Tran Ha Minh Quan for his instructions and valuable comments during the research. I also would like to thank Mr Dang Huu Phuc who gave meaningful advice for processing data.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Page 2 of 52 ABSTRACT The objective of this paper is to investigate the relationship between selected elements of marketing communication and brand equity of in the body lotion category. The selected set includes three key elements from each of marketing factors. They are advertising spending, field support activities and sales promotion from communication. Plus, awareness, perceived quality and brand loyalty are from brand equity.
With the concrete measurement, the study surveys body lotion users in HCMC. The results show that to selected component of brand equity of body lotion category, advertising spending and field support activities response a positive side, whereas sales promotion have a negative impact. These findings provide insights for doing strategy of marketing communication activities generating and managing brand equity. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Page 3 of 52 CHAPTER 1.
Introduction Brand equity is very important as it is a source of sustainable competitive advantages of a brand. The brand owning strong equity increases a chance for the brand to be selected, purchased more frequently and so the loyalty to the brand is higher, Pitta and Katsanis (1995). Moreover, brand equity has strong relationship with marketing communication. From various study, importance of brand equity are witnessed According to Rajh 2005, brand equity is very important because it has many benefits for companies.
Bharadwaj et al., (1993) and Hoffman (2000) find that brand equity could be considered as a source of sustainable competitive advantage while Pitta and Katsanis (1995) discover that there is the positive relationship between brand equity and brand loyalty. It means that the brand owning strong equity increases a chance for the brand to be selected, purchased more frequently and so the loyalty to the brand is higher. Aaker and Keller (1990) also find other benefits related to brand extension such as strong brand equity of the brand enhances possibility of brand extension to other product categories. It allows companies to use established brand name to drive consumers to enter new product categories.
In relation to marketing mix, various studies (Barwise, 1993; Farquhar et al., 1991; Keller, 1993; Keller, 1998; Pitta and Katsanis, 1995; Simon and Sullivan, 1993; Smith and Park, 1992; Yoo et al., 2000) find that brand equity is one of the sources to increase efficiency of marketing communication programs. Brand equity also increases willingness of consumers to pay premium price for a specific brand. Brand equity also impact elasticity of consumers to price change. More precisely, brand equity increases elasticity of consumers to price reductions and decreases elasticity of consumers to price increases.
Brand equity has positive relationship LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Page 4 of 52 with willingness of stores (distribution channel) to collaborate and provide support for the brand. Brand equity reduces the company vulnerability to marketing activities of the competition and their vulnerability to crises. Although of understanding importance of brand equity, managers have not invested in creation brand equity properly in the body lotion category which is growing in Vietnam market.Top two giant advertisers Unilever and Beiersdorf are competing in advertising spending, sales promotion, etc. However, they have not hadany research to investigate the relationship between elements of marketing communication and brand equity for this category.
In the last two years, the managers have frequently used sales promotion to improve their sales performance in the short-term. They may ignore to analysis whether sales promotion can deteriorate brand equity in the long-term. In addition, they don’t have clear communication strategy to enhance brand equity. Therefore, it’s necessary to explore the relationship between elements of marketing communication and dimensions of brand equity.
Research objectives The purpose of this research is to explore impacts of factors of marketing communication on brand equity’s elements. This has been one of hottest topics in management today in Vietnam emerging market where building brand equity plays an important role for giant advertisers’ communication strategy.The research also provides a starting point for further research on relationship between marketing mix and brand equity 1. Research methodology and scope The research is conducted in the dynamic market, HCMC in which there is the biggest sales contribution, up to 80% of sales on each key brand (Source AC Nielsen Market Retail Audit 2010) LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Page 5 of 52 Key brands are defined as brands with satisfying one of following criteria: The brand is the market leading in the body lotion category or The brands have long heritage in Vietnam market and have influence on the market or The brand have been active in marketing activities like adverting, promotion, etc or The brands that have high chance of consideration when making buying decision This study is conducted by two steps: (1) qualitative study and (2) quantitative study. Qualitative study is conducted through analyzing secondary data and in-depth interview with some current users and brand managers in cosmetic companies.
This step helps to (1) confirm key drivers of marketing communications (2) adjust and fine tune the measurement scales. Quantitative study is conducted through face-to-face interview at consumers’ houses. The second step p is to (1) re-confirm the components and the measurement scales and (2) test the research model. Cronbach’s alpha, Exploratory Factor Analysis (EFA) and multiple regression methods are used to analyze collected data in this step 1.
Managerial implications Findings of the research will help managers have in-depth understanding about elements of marketing communication and role of each element to increase or decrease brand equity of the body lotion market. Hence, brand managers can design effective marketing communication strategy 1. Structure of the research report LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Page 6 of 52 This paper comprises five chapters. Chapter 1 introduces the background of the study.
Chapter 2 presents the literature review on brand, brand equity and the research model and hypotheses. Chapter 3 explains research methodology and measurement scales. Chapter 4 presents data analysis process and results of the study. Chapter 5 summarizes the key findings, discussion, managerial implications, limitations of the research and recommendations for future research.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Page 7 of 52 CHAPTER 2. LITERATURE REVIEW AND RESEARCH MODEL 2. Introduction This chapter reviews literature to establish a theoretical framework for the research. The concept of brand equity and common elements of marketing communication are presented in the part.
The research model is developed to investigate the relationship between elements of marketing communication and factors of brand equity. Hence, it helps marketing managers to design marketing strategies more effectively 2. Brand equity Brand equity is defined as a set of assets and liabilities linked to the brand, which add value to or subtract value from a product in its relationship with customers. According to the proposal formulated by Aaker (1991, 1996) brand equity is a multidimensional concept.
It comprises of perceived quality, brand awareness, brand loyalty, brand associations, and other proprietary assets. Other researchers also share these dimensions as Aaker. For example, Shocker and Weitz (1998) suggest brand loyalty and brand association, Keller (1993) recommends brand knowledge, including brand awareness and brand image. And Lasscar et al., (1995) suggest five elements of brand equity (1) perceived quality, (2) perceived value, (3) brand image, (4) trustworthiness, and (5) commitment to the brand.
Brand awareness It relates to the strength of the brand node or trace in memory, as reflected by consumer’s ability to identify the brand under different conditions (Rossiter and Percy 1987). Brand awareness includes brand recognition and brand recall performance. Brand recognition requires that consumers correctly discriminate the brand as having been seen or heard previously. Brand recall requires that consumers correctly generate the brand from the memory.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Page 8 of 52 2. Perceived Quality Zeithaml (1988) defines perceived quality as “the consumer’s [subjective] judgment about a product’s overall excellence or superiority” (p. These judgments may be influenced by personal product experiences, unique needs and consumption situations. High perceived quality indicates that consumers recognize the differentiation and superiority of the brand through the long-term experience related to the brand.
Zeithaml also identifies perceived quality as a component of brand value; hence, high perceived quality would drive a consumer to choose the brand rather than other competing brands. Therefore, to the degree that brand quality is perceived by consumers, brand equity will increase. Brand Loyalty Oliver (1997) defines brand loyalty as “a deep held commitment to rebuy or repatronize a preferred product or service consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behavior” (p. Brand loyalty makes consumers purchase a brand routinely and resist switching to another brand.
Therefore, to extend that consumers are loyal to the brand, brand equity will increase 2. Brand Association Aaker (1991) defines brand associations as “anything linked in memory to a brand” and brand image as “a set of [brand] associations, usually in some meaningful way” (p.