UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyen Thi Kim Nhung ID: 22110042 CUSTOMER-BASED BRAND EQUITY A STUDY OF TRUNG NGUYEN COFFEE IN VIETNAM MASTER OF BUSINESS (Honours) SUPERVISOR: Prof. LE NGUYEN HAU HO CHI MINH CITY - August, 2014 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGMENTS This research could not have been done without the help and contributions of many people that I am very thankful to. First of all, I would like to express my deepest acknowledge to my supervisor, Professor Le Nguyen Hau for his help, valuable advices and recommendations. Especially during the whole time of doing thesis, his patient helps me to get through all mistakes in my work.
Moreover, he also teaches me much more than just finishing this thesis. Again, I want to say “Thank You Very Much” to my advisor for all he has done for me. I would like to use this chance to express my earnest appreciation to the professors and lecturers of International School of Business (ISB) – UEH for their guiding me in during my academic years at ISB. I have been assisted very much in the completing of this thesis by the knowledge and skills that I have learned.
Furthermore, I would like to appreciate the contribution of people who help me complete the survey questionnaires to share their valuable time and support me with useful information for completing this thesis. I also want to say “Thank You” to my friends, other senior students at ISB, who are doing thesis at the same time with me, for your supporting and encouragement during this difficult period of time and two years studying as well. Most of all, we like to thank our families and friends for their unconditional support and understanding during the research process. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS CHAPTER I INTRODUCTON.
Background of research. Research problem and purpose. Scope of the study. Contribution of the study.
Organizational structure of the study. 5 CHAPTER II LITERATURE REVIEW & THEORETICAL FRAMEWORK. Overview of branding. Customer based brand equity.
Aaker’s Brand Equity Model. 19 CHAPTER III RESEARCH METHOD. 29 CHAPTER IV DATA ANALYSIS & DISCUSSIONS. Respondent demographic profile.
Central tendencies measurement of construct. Evaluation and refinement of measurement scale. 36 iv LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Exploratory factor analysis.
EFA results for measurement scales of independent factors. EFA results for measurement scales of dependent factor – brand equity. Testing the relationship of independent factors and dependent factor. 48 CHAPTER V CONCLUSIONS & RECOMMENDATION.
Limitation and future research. 78 v LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 3.4: Rotated component matrix .5: Cronbach‟s alpha after EFA .9: The hypotheses testing result. 47 vi LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Figure 2.2: Aaker‟s Brand Equity Model .1: Final model of the study. 44 vii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT Brand equity is one of the important concepts in brand management, as well as in business practice and academic research.
Developing and properly managing brand equity has been emphasized as an important issue for most firms. Along with coffee brand in Vietnam, the competition of coffee shop market is fierily and fragmented due to numerous brands strike for consumer attention. This study uses Trung Nguyen coffee as example to explore the impact of brand equity in Vietnamese coffee shop market. The research is to develop a model to measure the customer based brand equity of Vietnamese Coffee and study the impacts of the brand equity‟s four dimensions on brand equity.
The findings in this paper with supporting of Trung Nguyen Coffee‟s case study were found that only three dimensions of brand equity (perceived quality, brand loyalty and brand association) have positive effect on Brand equity. The study shows that Trung Nguyen Coffee‟s managers and executives should put their efforts primarily on building brand loyalty, brand association and perceived quality in designing the marketing and brand building strategies. This study also provides important insights about the understanding of Hochiminh City consumers‟ perceptions of brand equity and its dimensions in the premium roasted coffee market. viii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER I INTRODUCTON 1.
Background of research According to data from MARD (2013), Vietnam exported 14.5 million bags of green coffee in the first seven months of 2013, an increase of 3 percent over the previous year, designating Vietnam as the second largest coffee exporter in the world. Moreover, Vietnam is also known as a coffee country with a long-standing coffee culture with first appeared in 1857. Gradually it becomes a popular and important drink in the lives of many Vietnamese people. Nowadays, many coffee brands, both foreign and domestics have been penetrating all over Vietnam to satisfy the huge demand for coffee of Vietnamese people.
Due to globalization, the domestic coffee market has also become very attractive to foreign investors and many famous international coffee brands have appeared and developed in Vietnam, such as NYDC Coffee, The Coffee Bean and Tea Leaf, Angel In Us Coffee, Starbucks coffee, etc. which make the domestic roasted coffee market become more competitive than ever. Confidence with many years‟ experience in producing roasted coffee, Vietnamese coffee brands like Trung Nguyen coffee, Highland coffee, Gogo coffee, etc. have tried to break into this market.
Notwithstanding, most companies have admitted it was difficult to increase even a small market share. The competition of coffee market in the segment of premium roast coffee is now moving from price and product‟s quality to brand building, particularly, the branding and product image are becoming more and more significant to Vietnamese customers. So, brand equity is 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com recognized as an important part that assisting Vietnamese coffee marketers or companies increase competitive advantage and assist to make management decision. Beginning with the application of trademarks to products for the purpose of product differentiation, brands have developed and become one of the key success factors in firms achieving competitive advantage though differentiation (Wood, 2000).
Brands create added value for both firms and customer. According to Aaker (1991), brands play a key role in increasing the value of products and protecting the product from being imitated by competitors. If Vietnamese roasted coffee brands could deeply understand the importance and get benefit from brand equity, they get greater profit and loyal customers. These circumstances motivated me to investigate the relationship between selected brand equity‟s dimensions and brand equity.
Founded by Dang Le Nguyen Vu in 1996, Trung Nguyen coffee was a small business processing coffee in Ban Me Thuoc city. At that time, Vietnam had risen once again to be one of the leading coffee producers in the world, but almost solely producing "green" coffee (unroasted beans) that were sold on the commodity market. This resulted in no control over the final coffee quality or prices. In 1998, the first Trung Nguyen coffee shop was officially launched in Ho Chi Minh City.
In 2001, Trung Nguyen coffee shops were launched in all provinces. Up to now, Trung Nguyen coffee has more than 50 coffee shops operating throughout Vietnam. Trung Nguyen coffee is confident in the future of sustainable development with the emergence and continuous growth of the country. At the beginning, Trung Nguyen Coffee has recognized the importance of 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com branding and always tried to build its brand to become a high-class brand of coffee for customers who have high income.
Research problem and purpose Competition is the most fundamental factor that directly affects the brand emergence and growth (Laaksonen, 1994). Today, the competition is fiercely in all fields due to the threat of new entrances and rivals, coffee shop market are not an exceptional. The company always try to outperform their competitors to grab a greater share of market, thus, an appropriate marketing strategy is necessary. Here, brand equity is a concept in marketing field which plays an important role that affects developing business for a company.
When the market is full of competition, the brand, the style and the quality of a product are vital points in customer‟s selection. Vietnamese roasted coffee brands have spent much money on producing mass of products, reducing prices, and introducing promotional campaigns to attract customers but they forget that customers always choose famous, trusted and reliable brands. Up till now, many domestic coffee enterprises cannot build their own unique brand in an effective way associated with their roasted coffee. Most of them have not yet achieved national recognition.
Research objective The main purposes of this study are to understand of the brand equity concept employ in marketing. Especially, to measure and examine the effectiveness of brand equity dimensions, i., brand awareness, brand association, perceived quality and brand 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com loyalty on consumer based brand equity creating and also determine what dimensions of customer based brand equity have positive effect on the brand equity of Trung Nguyen Coffee. The finding of this paper will help Vietnamese‟s coffee company to create positive brand equity in order to increase the development of their future business growth and profit, by answering follows questions: What dimensions of brand equity have positive effect on perception of Vietnamese coffee brand with representative is Trung Nguyen coffee? How much they affect the brand equity of Trung Nguyen coffee? What is the current brand equity level of Trung Nguyen Coffee? How to improve the current brand equity level of Trung Nguyen Coffee? 1. Scope of the study The research is conducted in Ho Chi Minh City and on customers of Vietnam coffee brands and mainly focused on Trung Nguyen Coffee.
Moreover, this research just focuses on some office buildings that have large number of officers who are the potential customers of Vietnam‟s coffee brand. Thus the findings of this research cannot illustrate the overall perception of entire customers in Vietnam about brand equity of Vietnam„s coffee brand. This research may not reflect the opinions of all Vietnam‟s coffee brand customers in Ho Chi Minh City as the survey was mostly conducted at some office buildings in some districts. Due to lacking of time and experience to analyze and research the real problem, there could be some biases that might affect the results.
4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Contribution of the study The results of this study can help the managers of Vietnam‟s coffee brand especially of Trung Nguyen coffee measure the current brand equity level of their brand under the view of customers and figure out current problems in their branding strategies. It also helps to come up with scientific solutions to improve the brand equity of Vietnam‟s coffee brands and gain competitive advantages. The questionnaires designed in this study can be applied in practice to support to the customer survey system of Vietnam‟s coffee brands.
Moreover, the research may help Vietnam‟s coffee brands have a better understanding of the influencing level of brand equity on customers. The results of this study will not only be considered as a reference for similar coffee brands to review their current services and performance, but it will also be the reference for further researches on the related fields or sectors. Organizational structure of the study The paper is organized as follows. First, introduction part includes general background of the research, research problems and purposes, scope of the study, significant, and structure of the study.
Second section is the literature review which shows up the definition and conceptual framework of the terms used as well as related and previous studies. Third, research methodology presents an overview of the approach used to conduct the research.