FOREIGN TRADE UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION ---------***--------- GRADUATION THESIS Major: International Business Administration FACTORS AFFECTING CUSTOMER BRAND PREFERENCE: A CASE OF BEER INDUSTRY IN HANOI Submission Approval Student name: Phạm Hữu Tuấn Trung Student ID: 1517280083 Class: Eng 12 Batch: 54 Bui Thu Hien, PhD. Instructor: Bui Thu Hien, PhD. Hanoi, May 2019 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com i TABLE OF CONTENTS CHAPTER 1: INTRODUCTION.1 The rationale of the research.2 Objectives of the research.3 Scope of the research.5 Structure of the research.6 CHAPTER 2: LITERATURE REVIEW ON CUSTOMER BRAND PREFERENCE IN BEER INDUSTRY.1 Customer brand preference in beer industry.2 Factors affecting Customer brand preference in beer industry.12 CHAPTER 3: RESEARCH METHODOLOGY.1 Variables, hypotheses and equation.1 Population and Samples.3 Data analysis procedure.28 CHAPTER 4: RESEARCH FINDINGS.1 An introduction about beer industry in Vietnam.4 Scale test on factors affecting beer preference.4 Exploratory factors analysis.5 Confirmatory factors analysis.6 Structural equation model.51 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.53 CHAPTER 5: RECOMMENDATIONS AND CONCLUSIONS.1 Conclusions and research limitations.1 Recommendations based on beer characteristics.2 Recommendations based on branding.3 Recommendations based on situation appropriateness.v LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com iii LIST OF FIGURES Figure 3.1: Research process Figure 3.2: Research model Figure 4.1: Vietnamese market-share 2012 - 2016 Figure 4.2: Measurement model in Confirmatory Factor Analysis Figure 4.3: Structural model Figure 5.1: Beer production process LIST OF TABLES Table 3.1: Acronym for variables22 Table 4.1: Top 10 Asian countries with highest market growth Table 4.2: Demographics - Gender Table 4.3: Demographics - Age Table 4.4: Demographics - Marital status Table 4.5: Demographics - Level of education Table 4.6: Demographics - Monthly income Table 4.7: Demographics - Consumption frequency Table 4.8: Demographics - Favorite beer brands Table 4.9: Questionnaire descriptive statistics Table 4.10: Reliability test on factors Table 4.11: Correlations matrix Table 4.12: KMO and Barlett's Test Table 4.13: Extraction of communalities Table 4.14: Total variance explained Table 4.15: Factor loading based on the size of a sample Table 4.16: Pattern Matrix Table 4.17: Evaluation of Model Fit Table 4.18: Evaluation of Model Fit Table 4.19: Unstandardized regression coefficient LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1 CHAPTER 1: INTRODUCTION 1.1 The rationale of the research A critical component of marketing in any product is consumer behavior. As a result, this paper aims to answer what makes a consumer buy a product, especially where other similar products and brands are available.
The study of consumer behavior in purchasing beer would allow marketing managers to come up with an insight on what factors governing a consumer's decision in order to put forward strategies and predictions that align with customer brand preference. Beer-making and its resultant beverage have been present for multitudinous centuries alongside the development of human history. However to Vietnamese people, beers as a topic only caught on since its first introduction in the 19th century, by the French colony. Ever since, it has grown on the general populace, gradually replacing traditional home-brewed liquors as a national favorite, through its lighter alcohol level, more refined taste and affordable price (FPTS, 2018).
Even for today, the beer industry is still ceaselessly expanding in Vietnam in both growth rate and production capacity, rivaling other big nations such as England, Japan and Poland (FPTS, 2018). Consequently, there is an increasing number of both local brand breweries and international brands emerging from within the market competing for market-share. Therefore it was one primary goal of this study to investigate beer brand preference pattern in Hanoi - a cosmopolitan city as a focus of this study. A set of identified 7 intrinsic and extrinsic (Khongsawatvorakul, 2016) factors will be examined for their potential influence on customers' behavior.
Myriad research has already been published internationally on the subject of brand preference in the beer market. Brand preference in these studies were discovered to be affected by both intrinsic factors (Aquilani, 2015), (Khongsawatvorakul, 2016) and extrinsic factors (Amadi & Sunday, 2014). Nevertheless, this topic of research was still few and far between in Vietnamese LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Hence, this paper aims to fill in the gap; it will put brand preference into a conceptual framework in Hanoi.2 Objectives of the research This research aims to investigate factors affecting customer brand preference in Hanoi beer industry.
In detail, it resolves the 3 main objectives, as state below: First of all, it sets to identify factors that can positively or negatively affect Vietnamese customer's beer brand preference. Next, using an empirical framework, it aims to unravel the underlying reasons and to explain the correlation between factors in the model, all has a basis on the context of the overview of beer industry in Vietnam. Finally, the findings may be of use to marketers and policy makers to better understand a customer's mindset and create corresponding strategies. In order to give light to the objectives above, this research will also aim to answer some research questions: 1.
Do beer characteristic, branding, beer types, situation appropriateness statements, packaging, social media and country of origin have relationships with consumer brand preference in Hanoi beer industry? 2. Do beer characteristic, branding, beer types, situation appropriateness statements, packaging, social media and country of origin a with consumer brand preference in Hanoi beer industry? 1.3 Scope of the research The study is conducted in the area of Hanoi, through non-random convenience sampling method. Data collected by questionnaires from 300 respondents aged over 18 who had experienced drinking before will be analyzed to seek the correlation between independent variables: Beer characteristic, Branding, Beer types, Situation appropriateness statements, Packaging, Social media, Country of origin and the latent dependent variable: Brand preference. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 The study was conducted from March, 5th 2019 to May 30th 2019.
With the first month (March) spent on reviewing the literatures and drafting research outline as well as the questionnaires; from April 1st to May 5th dedicated to survey collection and the remaining time spent on analysis and developing a conclusion.4 Research methodology Most scientific research is done through either qualitative or quantitative method. With qualitative research - a method primarily employed for exploratory purposes, does not involve numbers or numerical data. It often involves words and languages to express observations gathered from a variety of methods such as interviews, focus group, secondary data or plain observations. Quantitative research on the other hand can be more easily identified and defined.
The data produced are always numerical, and they are analyzed using mathematical and statistical methods (Mark Saunders, 2009). The data for quantitative research are primary data through surveys, observations and other secondary data. These data will be further analyzed and visualized for correlation and statistical significance through quantitative programs. For the sake of this research, a mixed method will be utilized to both the collection and analysis of data.
Qualitative method will be used in the survey development phase of the study when latent variables are encoded with representing questions. While quantitative method will be utilized in model development process, when IBM SPSS and IBM AMOS are used to analyze the resulting surveys.5 Structure of the research This research will be divided into 5 distinct chapters, each with a singular purpose as detailed: Chapter 1 - INTRODUCTION: We will discuss the rationale of the research, what this thesis aims to accomplish, its respective area of scope and also lightly touch on relevant researches on the same field. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 4 Chapter 2 - LITERATURE REVIEW ON CUSTOMER BRAND PREFERENCE IN BEER INDUSTRY: This chapter aims to cover all the literature review on all factors, such as customer brand preference, beer characteristic, branding, beer types, situation appropriateness statements, packaging, social media and country of origin with their respective previous findings and how these will come together to build a feasible theory model. Chapter 3 - REASEARCH METHODOLOGY: This chapter is to build research methodology and data analysis.
The study will discuss the data collecting procedures, questionnaires, how data would soon be analyzed and finally come up with a conclusive model to test out all my previous hypotheses. Chapter 4 - RESEARCH FINDINGS: This chapter aims to illustrate research findings from said questionnaires, and further analysis on both individual factors and the model's regression validation, using Confirmatory Factor Analysis and Structural Equation Modeling. These results are then compared to a set of indices for model fit and used to either approve or reject the hypotheses. Chapter 5 - RECOMMENDATIONS AND CONCLUSIONS: This final chapter sums up all previous findings, and give recommendations for future further research, strategies for marketers and students who are interested in bettering the beer industry in Vietnam.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 5 CHAPTER 2: LITERATURE REVIEW ON CUSTOMER BRAND PREFERENCE IN BEER INDUSTRY 2.1 Brand Brand is considered firm asset which can contribute identity and character, guide consumers' product choices and form the relations among consumers. Other than that, brand has several benefits for firms, consumers and society (Bahtışen Kavak, 2015). In terms of consumers, brand is a quality indicator and creates awareness for products. A highly sought after brand is great indicator that it is a brand of good quality and reputation.
In terms of firms, brand provides customer loyalty, consistent sales amount and a high profit margin. As a result of consumer and firm benefits, brand plays a key role on social development, where both the incentives of firms and customers are satisfied in the act of exchanging goods, services and cash. In intense competitive conditions, firms need to create strong brands in order to survive and gain a competitive advantage. However, the exact definition of a "brand" is still in debates.
Some would consider it the personality of a business (Dib, 2016), where it must be able to illustrate several attributes: name, design, positioning, brand promise, target market and awareness. Others define that brand is the perception of customers about said companies, organizations or individuals (Lischer, 2018). Since it is an intangible concept, it must be defined in the place where it shows. Brand lives in people's minds, which includes all employees, investors, consumers and the media.
A brand’s personality is the reason it is identifiable to its loyal customers and the basis for the highly personal relationships they form with it. To sum up, brand is the sum total of how people perceive a particular organization. This is influenced by the brand compass - of where the direction of the brand is going through the use of a clear vision statement, mission statement, purpose statement, values proposition and strategic objectives to attain these goals. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 6 In this regards, values proposition or core values are especially important in guiding how the brand will engage and leave its mark with the world outside, and in turns, be perceived favorably or unfavorably.1 Customer brand preference in beer industry Amadi and Sunday (Amadi & Sunday, 2014) definition of brand preference being a measure of brand loyalty where a consumer would prefer a one brand in presence of competing others, but will switch to substitute products should that brand is unavailable.
The notion of preference has been considered by different disciplines, such as economist, psychologists and sociologists. Economists (Samuels, 1978) state that preferences are exogenous stable, known with adequate precision and are revealed through choice behavior, but many other refused to believe on this exclusive exogenous characteristic. In marketing, the concept of preference means the desirability or choice among alternatives. This concept of Brand Preference is often denoted differently by different academic authors.
But in summary, first brand preference is created from consumers' differentiation and comparisons between various alternatives of brands considered by them. Second, the resulting preference displays several biases in certain brands in evaluation of alternatives. And finally, the attendant predisposition of customers is reflected by affective, cognitive and behavioral responses (Ebrahim, 2013).