UNIVERSITY OF ECONOMICS HOCHIMINH CITY International School of Business ------------------------------ Hoang Thi Le Thuy BRAND LOYALTY OF OFFICE WOMEN TOWARD COSMETIC PRODUCTS IN VIETNAM STUDENT ID: 22120140 MASTER OF BUSINESS BY HONOUR SUPERVISOR: Dr. DINH CONG KHAI Ho Chi Minh City - 2015 TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGEMENTS I would not have been able to complete my thesis without the advice, assistance, understanding and encouragement of a number of people. I would like to gratefully and sincerely acknowledge their assistance and support. First of all, the most important person I would like to thank is my supervisor, Dr.
Dinh Cong Khai. Thanks to his valuable advice and generous guidance throughout the journey of this reseach, I can finish my thesis. Secondly, I would like to thank all of the staff at International School of Business – University of Economics Ho Chi Minh City who are always enthusiastic and give me a lot of administrative support, assistance and understanding. Furthermore, I would like to express my grateful thanks to my friends and all the respondents who participated in filling the questionnaires and provided the valuable information for this study.
Finally, I would like to give my gratefulness to all classmates who have been sharing with me all their knowledge and experience as well as happiness and difficulties during MBA course. I would not complete my thesis without their encouragement and support. Personally, I wish to express my deep gratitude to my parents and my brother for their spiritual support and encouragement during the time of study. In brief, it has been a long journey and I have grown in so many ways.
I would like to say “thank you” again for the involvement of everyone who has helped me to complete this thesis. June 6, 2015 Ho Chi Minh, Vietnam, Hoang, Thi Le Thuy TIEU LUAN MOI download : skknchat@gmail.com Abstract For cosmetic industry, it is essential for businesses to understand the critical factors that influence brand loyalty of office women toward cosmetic products. These issues are critical to the long term business success of any industry. Based on the literature reviews in the thesis, this study empirically examines the roles of the factors: brand awareness, perceived quality, brand image and brand trust on brand loyalty of office women toward cosmetic products in Vietnam.
The test processes in a sample of 138 cosmetic users who are office women working in office buildings Ho Chi Minh City. Using a five-point Likert- scale to measure data together with some methods of data analysis (Cronbach‟s Alpha test, Exploratory factor analysis and Multiple regression analysis), the findings confirm that brand awareness, perceived quality, brand image and brand trust has the positive effect on brand loyalty. Extracted from the findings of this research, in order to receive the loyalty of women toward cosmetic products, cosmetic brand must set up effective strategies marketing to keep improving and maintaining the brand image, brand awareness, brand trust as well as perceived quality. The results of this research are important for cosmetic businesses to enhance and improve their competitiveness, in other words, to become successful and have more loyal customers, which will ultimately result in more profitability.
Key words: customer retention, brand loyalty. TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS CHAPTER 1. Scope and Research Methodology of Study. Significance of the Study.
LITERATURE REVIEWAND RESEARCH MODEL. From the traditional viewpoint of brand. From the synthetic viewpoint of brand. The Customer-based Perspective of Brand Equity.
The customer-based perspective .21 TIEU LUAN MOI download : skknchat@gmail. Data Collection Method. Data Analysis Method .3 Exploratory factor analysis (EFA).4 Multiple regression analysis. Preliminarily Data Analysis.
Cleaning and screening data. Profile of respondents. Evaluating the Measuring Scales .1 Cronbach‟s alpha Reliability analysis. Exploratory Factor analysis.
Exploratory factor analysis (EFA) for independent factors .2 Exploratory Factor Analysis (EFA) for dependent factor.3 Summary of Exploratory factor analysis (EFA).42 TIEU LUAN MOI download : skknchat@gmail. Test of assumptions. Explanation for the finding results of the hypotheses. CONCLUSIONS AND IMPLICATIONS.
Limitations and Future Research.52 TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table 3.1 Measurement scale of brand loyalty .2 Measurement scale of brand awareness .3 Measurement scale of perceived quality .4 Measurement scale of brand image .5 Measurement scale of brand trust .6 Measurement scale of the research after doing qualitative research .7 The result of collecting questionnaires .1 Descriptive Statistics of Sample.2 Cronbach‟s alpha result .3 KMO and Bartlett's Test .4 Total Variance Explained .5 First EFA analysis results for the independent factors .6 KMO and Bartlett's Test .7 Total Variance Explained .9 Description of the correlation among variables .13 Summary of hypotheses testing result .47 LIST OF FIGURES Figures 2.20 TIEU LUAN MOI download : skknchat@gmail. Research Background The history of cosmetic industry spans at least 6,000 years along with the development of human history. The Food and Drug Administration (FDA) has defined cosmetics as something that intends to be applied on the human body for cleansing, beautifying, promoting attractiveness, or altering the appearance without affecting the body's structure or functions, (Lewis, 2000). Cosmetic is generally considered to be make- up products.
However, they indeed present in different forms, varying from powders, body makeup, soap, shampoo, and toothpaste (Kumar, Massie, & Dumonceaux, 2006). Cosmetic industry is considered to be one of the fastest-growing industries in the business arena. The research of Kumar (2005) has showed that cosmetic products account for approximately 18% of the entire global market for cosmetic, toilet, and fragrance. The dramatic growth of the market not only exists in the Western hemisphere, due to the trend of globalization, the markets of cosmetic products gradually develop in the regions such as Asia, Eastern Europe and South America which represent a progressive consumption in the cosmetic markets (Kumar, 2005).
In addition, with the growth of global economics, the cosmetic and fragrance industry show a successful performance with an average of 5% growth rate among the industries every year (Kumar, 2005). In the traditional agricultural society like Vietnam, cosmetic seemed to be luxury products to Vietnamese people in the past. However, due to the improvement of living standard, people have generated more and more demands toward cosmetic. In some cases, cosmetic becomes one of daily necessities to some people.
People are even willing to pay a big amount of money for the sake of taking care of the beauty of face and skin by buying trusted cosmetic. For example, through a survey, Q&Me (2015) studies the routine of using cosmetic of Vietnamese women. This survey states that Vietnamese women often makeup. Specially, the survey showed that 24% women makeup daily and 44% women makeup at least once a week.
That means about 68% women often use cosmetic to makeup excluding TIEU LUAN MOI download : skknchat@gmail.com 2 cosmetic for skin care. Also, Nguyen (2012) notes that cosmetic market in Vietnam very potential. In addition, Nielsen (2013) indicates that only 34% of Vietnamese customers seemed to be loyalty. Based on this result, it shows that office women seemed to be not much loyalty to cosmetic brand.
Nevertheless, office women more and more have high demand for using cosmetic products. In addition to, high brand loyalty could generate more profits and lower many aspects of cost spent by the organization. Thus, measuring customers‟ perception for cosmetic brand equity in Vietnam becomes very important and necessary. That will be the basis for improving the brand equity for cosmetic industry.
It is essential to reveal the factors that influence the brand loyalty by examining determinants of brand loyalty. Then, research results will support the brand loyalty theory through understanding the meaning of the factors that affect office women‟s loyalty toward the cosmetic brands. Thereby, the results also provide marketing managers with insights of establishing a more comprehensive business strategy to keep customers loyal to the cosmetic brand. Research Problem The cosmetic market is regarded as one of the most competitive market with an enormous potential in business and innovative brands which are developed rapidly every day in order to enter this lucrative market.
It is stated that cosmetic industry is a “very lucrative, innovative fast paced industry” (Kumar et al. Namely, innovation is significant and considered to be the key to success. In addition, the extent of competitiveness in the cosmetic market becomes more and more fierce. Owing to the volatility of the cosmetic market which is included by a variety of brands and products, the role of establishing, consolidating and maintaining competitive advantages becomes more and more important.
In order to achieve competitive advantage and efficiency, businesses have to seek profitable ways to differentiate themselves. The necessary thing to survive and maintain customer revisits is to understand customers‟ needs and their expectations. Numerous of TIEU LUAN MOI download : skknchat@gmail.com 3 researches have indicated the importance of brand loyalty. The aim of studying brand loyalty is to unveil the factors that give rise brand loyalty and provide insights for managers to sustain a competitive brand.
So, brands create higher customer loyalty, the higher profit the company receives, which means that this brand has high value (Aggarwal, 2004). Several previous studies have investigated about the brand loyalty and consuming cosmetic products with many different components from many other aspects. Such as the impact of factors of brand loyalty on cosmetic purchase intention of Iranian female consumers (Kambiz and Leila, 2012), investigation about how the respondents are influenced by factors of brand loyalty towards cosmetics brands (Khraim, 2011), the effects of using internet in consuming cosmetics (Lee, Wu, Lin & Lee, 2014) and the effects of emotional aspects and functional ones on customers‟ decision-making towards cosmetics (News Rx Health & Science (2011). These above reaches evaluate the effect of brand loyalty toward cosmetic brand by using different components and aspects.
In Vietnam, there are also many researches about cosmetic products and the relationship between determinants of brand loyalty toward cosmetic industry. Besides, the target customers of cosmetic companies are principally female consumers. Along with the development of cosmetic‟s history, it has become more and more familiar to women. Especially, cosmetic have even become one of daily necessities to most of office women.
Office women in this research are considered as women working in office businesses, school or institute. Office woman is one of biggest segments of cosmetic market for women. They also account for big amount of women residents who are consuming cosmetic products in Ho Chi Minh City. Most of them have high demand of cosmetic products for their daily activities and supporting their job demand.
Moreover, they mostly have jobs and stable income to maintain their need toward trusted cosmetic. Therefore, they are expected to contribute significantly to the consumption of cosmetic. As a result, the market segment of office women is potential for cosmetic industry to conquer. However, it does not find out a specific research about components influencing TIEU LUAN MOI download : skknchat@gmail.com 4 on brand loyalty of office women toward cosmetic products in Vietnam by measuring factors of brand equity.
Therefore, in order to fulfill the gap of relationship between components of brand equity in the cosmetic industry, the author would investigate some components to explore the key factors influencing on brand loyalty of office women in Vietnam toward cosmetic products. That is the research problem which the author intends to investigate through this thesis. Research Objectives Based on the research background and research gap, the overall objective of this study is to examine the relationship between some key factors which are supposed to affect brand loyalty toward cosmetic products in Vietnam of office women such as brand awareness, perceived quality, brand image and brand trust. Thank to examining the impact of those key factors on brand loyalty of office women toward cosmetic products, the author would suggest some implications to enhance brand loyalty of office women toward cosmetic products.