UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Le Ngoc Tuyen THE EFFECTS OF FUNCTIONAL VALUE, HEDONIC VALUE AND SOCIAL VALUE ON CUSTOMER PARTICIPATION: A STUDY OF FANPAGES IN VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City – 2016 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Le Ngoc Tuyen THE EFFECTS OF FUNCTIONAL VALUE, HEDONIC VALUE AND SOCIAL VALUE ON CUSTOMER PARTICIPATION: A STUDY OF FANPAGES IN VIETNAM ID: 22140063 MASTER OF BUSINESS (Honours) SUPERVISOR: Assoc. Nguyen Thi Mai Trang Ho Chi Minh City – 2016 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT I would like to express my deep gratitude to my supervisor, Assoc. Nguyen Thi Mai Trang for her patient guidance, valuable comments and helpful advice of this research work. I would also like to thank my friends in MBUS 5 for their encouragement and assistance throughout the process of this research.
My grateful thanks are also extended to my colleagues for their help in collecting data. Finally, I wish to thank my parents for their support and encouragement throughout my research. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS ACKNOWLEDGEMENT TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES Abstract. Theoretical background and hypotheses.
Procedure and sample. Cronbach’s Alpha, EFA, CFA and SEM. Results of moderating effect. Implications for theory and research.
Implications for managers. Limitations and directions for future research. 44 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 1: Measurement scale .22 Table 2: Cronbach’s Alpha coefficients. 25 Table 3: Pattern Matrix.
26 Table 4: Unstandardized structural paths. 29 Table 5: Findings of qualitative research. 44 Table 6: The SEM results of variant and partial invariant model – Extraversion. 45 Table 7: The difference between fitness indices of variant model and partial invariant model in term of extraversion.
45 Table 8: The SEM results of variant and partial invariant model – Agreeableness46 Table 9: The difference between fitness indices of variant model and partial invariant model in term of Agreeableness. 46 Table 10: The SEM results of variant and partial invariant model –Conscientiousness. 47 Table 11: The difference between fitness indices of variant model and partial invariant model in term of Conscientiousness. 47 Table 12: The SEM results of variant and partial invariant model – Neuroticism 48 Table 13: The difference between fitness indices of variant model and partial invariant model in term of Neuroticism.
48 Table 14: The SEM results of variant and partial invariant model – Openness to experience. 49 Table 15: The difference between fitness indices of variant model and partial invariant model in term of Openness to Experience. 49 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Figure 1: Conceptual model .11 Figure 2: CFA for Customer participation. 27 Figure 3: Structural model.
28 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1 Abstract This study examines the effects of functional value, hedonic value and social value on customer participation in fanpages in developing country like Vietnam. Besides, it checks the effect of customer participation in fanpage on life satisfaction. An empirical test with the sample of 231 customers was analyzed by means of structural equation modeling. The results show that both functional value and social value has a positive effect on customer participation in fanpage.
In five traits of personality, just extraversion and conscientiousness have the moderating effect on the relationship between functional value, hedonic value, social value and customer participation. Finally, the participation of customer on fanpage has positive effect on life satisfaction. In general, this study suggests some important guidelines for marketing managers for improve their fanpage to keep the existing customers and attract more potential customers. Key words Functional value, hedonic value, social value, personality traits, customer participation, life satisfaction, fanpage, Vietnam LUAN VAN CHAT LUONG download : add luanvanchat@agmail.
Introduction In recent years, social media has dramatically changed the ways consumers communicate with each other and how they collect and exchange all information about the service and product (Hennig-Thurau et al. Social media is defined as “a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content” (Kaplan & Haenlein, 2010, p. It makes easier for people to search information, share ideas, communicate and interact about all the issues around the world. Social media also helps the company be able to reach a large of the potential customer without geographical limitation just with a little cost, improve service better by receiving and answering feedback from customers instantly, increase brand awareness and produce a new product fit to the customer’s demand.
Consequently, social media has played a significant role in building the relationship between the customers and the firm. Among social media platforms, Facebook is the most successful one with 1.19 billion mobile monthly active users in December 2014 (Facebook Annual Report, 2014). With the population over 90 million, Vietnam has around 49 million people using Internet, equivalent to 52% of the total population (Internet Live Stat, 2016). Vietnam ranks the thirteenth in hundreds of countries which have the most Internet users all over the world.
Facebook has 30 million monthly active users in Vietnam, with 27 million accessing the social network on their mobile devices, according to statistics obtained by Tuoi Tre News (2015). Each Vietnamese user spends an average of two hours and 30 minutes on Facebook every day, mostly LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 connecting with friends and visiting fanpage of brands and shops. Fanpage are public profiles that let artists, public figures, businesses, brands, organizations, and non- profits create a presence on Facebook and connect with the Facebook community Most of big enterprises in Vietnam also have fanpage such as: Samsung Mobile Vietnam, Vinamilk, Lazada, Coca-Cola, etc to connect with their customers. Customer participation has been considered as an important topic in a board range of journal and business research over the past 40 years (Mustak, Jaakkola & Halinen, 2013).
Dabholkar (1990) defined customer participation as “the degree to which the customer is involved in producing and delivering the service” (p. Customer participation in this study is consistent with the concept of value “co- creation” in service-dominant logic (Vargo & Lusch, 2004; Lusch &Vargo, 2006). Service-Dominant logic considers customer is always a co-creator (Vargo & Lusch, 2004). In addition, Prahalad and Ramaswamy (2004) showed that customers are no longer “passive audience” but “active” co-producers.
In the past, companies decided which products and services produced because they believed that these products and services were valued to customers; customers had little or no role. Nevertheless, in customer-centric view, customers have been more active, and they are considered as a partner in developing new product (Sawhney, Verona & Prandelli, 2005). Hence, nowadays many companies try to encourage customers participate in activities through social media platform in order to understand more about the customers’ demand and get more contribution for new product and service development processes. Motivations driving consumers to take part in the virtual community attracted more attention from many researchers (Dholakia, Bagozzi & Lisa, 2004; Wang & LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 4 Fesenmaier, 2004a, 2004b; Madupu, 2006; Raacke & Bonds-Raacke, 2008; Foster, Francescussi & West, 2010; Kang, 2011; Jahn & Kunz, 2012, de Vries & Carlson, 2014).
Wang and Fesenmaier (2004a) divided these factors into four categories: functional, social, psychological, and hedonic. Based on the classical concepts Uses and Gratifications theory, Jahn and Kunz (2012) proposed a framework with five factors (functional value, hedonic value, social interaction value, brand interaction value, self-concept value) motivated customer engagement on fanpage of Facebook. Almost earlier studies about participation in virtual community have been undertaken into advanced countries. With our knowledge, there are a little research have been done in developing countries such as Vietnam.
Personality traits also influence to the use of Facebook. In virtual community, many researchers show that there was the relationship between the personality traits and customer participation (Kraut, Kiesler, Boneva, Cummings & La, 2002; Acar & Polonsky, 2007; Ross et al., 2009; Wilson, Fornasier & White, 2010; Seidman, 2013). Acar and Polonsky (2007) stated that personality factors such as extraversion, self- esteem, opinion seeking and opinion leadership have direct and indirect impacts on time spent using online social media networks. Ross et al.
(2009) indicated that personality variables (extraversion, neuroticism, openness to experience, agreeableness and conscientiousness) were associated with some aspects of Facebook use. From these reasons, the purpose of this study is to examine factors affecting to customer participation in social media. Besides, we want to test personality traits whether they moderates the relationship between functional value, hedonic value, LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 5 social value and customer’s participation in fanpage. Finally, customer particpation in virtual community has many consequences, but in this study we focus on how customer participation in fanpage affects life satisfaction, especially in a developing country like Vietnam.
We believe that understanding the reason customers take part in fanpage will offer useful guidance for managers using it as a channel in their strategy marketing to create a competitive advantage and improve the relationship with existing customers or attract more potential customers. The paper is organized as follows. The first section represents the brief review of customer participation in the context of social media environment. The second section includes theoretical background and hypotheses.
The third section describes the methods used to collect and analyze the data. It is followed by analyzing the findings and discussion. Finally, the paper closes with study limitations and directions for future research. Theoretical background and hypotheses 2.
Customer participation Customer participation was adopted from the concept of Dabholkar (1990) as “the degree to which the customer is involved in producing and delivering the service” (p. Customer participation is also consistent with the concept of value “co-creation” in service-dominant logic (Vargo & Lusch, 2004; Lusch & Vargo, 2006). Vargo and Lusch (2004) emphasized on value co-creation in Service -Dominant logic framework as a mutual process in which customers and firms are equally involved in value creation. In the past, customers were passive in receiving products or services offered LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 6 by the firms.
They are now informed, connected, networked, and empowered more than before, thanks to search engines and the explosion of social networking sites. Customers become active players and equally in co-produce and co-create value with the firms. Social media plays a central role to encourage customer participation with the firms because it increases communication between the company and the customer. Long time ago, many companies spent a lot of money interviewing group of targeted customers or collecting survey data, but at the present, social media platform gives them better opportunities to connect with people all around the world.
Social media helps the company not only decrease the time to get insights about the products but also increase information’s quality collected. Some popular social media platforms include Facebook, YouTube, Flickr, Instagram, LinkedIn, etc. Among them, Facebook is the most popular social networking site in the world. Facebook offers the firms, organizations many services to contact and communicate with their customers, and fanpage maybe used most.
Cvijikj and Michahelles (2013) mentioned that through fanpage, customers can engage with the firms by: posting content on the wall, commenting on the existing post shared by the moderator, pressing the “like” button to show interest in an existing and sharing the post on their profile wall. Moreover, Ho and Wang (2015) presented that customer participation in fanpage through some activities such as becoming a member and sharing experiences, interacting with others, asking questions about the brand or product, or answering the comments.