UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Thai Hong Kim KEY FACTORS AFFECTING BRAND LOYALTY IN HOTEL INDUSTRY IN HO CHI MINH CITY MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 123doc UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Thai Hong Kim KEY FACTORS AFFECTING BRAND LOYALTY IN HOTEL INDUSTRY IN HO CHI MINH CITY ID: 22110031 MASTER OF BUSINESS (Honours) SUPERVISOR: DR.DINH THAI HOANG Ho Chi Minh City – Year 2014 123doc ACKNOWLEDGEMENTS I would like to express my sincere gratitude to Dr. Dinh Thai Hoang who has supported me a lot with the thesis preparation and motivated me throughout the journey of the thesis. I strongly believe that I could have not completed this thesis without the assistance from all of my friends who helped me to guide the customers to do the survey and chased for data submission. I would like to take this opportunity to thank leaders, teachers and staffs in ISB who help me usefully all the subjects of my master course.
Last at all, I would like to present the achievement to my family who supported and encouraged me during this time. July, 2014 Ho Chi Minh City, Viet Nam Thai Hong Kim 123doc TABLE OF CONTENTS CHAPTER 1 : INTRODUCTION. 3 CHAPTER 2 : LITERATURE REVIEW. Consumer-based brand equity .2 Service quality: Physical quality and Staff behavior.
Ideal self-congruence .5 Consumer satisfaction and Brand loyalty. Research Model and Hypotheses. 21 CHAPTER 4: DATA ANALYSIS AND RESULTS .2 Exploratory factor analysis .1 Model 1: Multiple Regression Analysis with all independent variables and CS .2 Model 2: Multiple Regression Analysis with with consumer satisfaction variable as independent variable and brand loyalty as dependent variable.5 Discussion of Findings. 46 CHAPTER 5: CONCLUSION AND IMPLICATION .3 Limitations and Future Research.
53 123doc ABSTRACT Recent years, the hotel industry in Vietnam is developing sharply. The development of high standard or luxurious hotels to satisfy the demand of consumers creates the competitive market. Besides that, the return of Ho Chi Minh City hotel market through recent years is the good news and also the challenge for the firms in this industry (2010-2013: hotel room increased 35% , source: Alternaty, 2011-2013: total tourist arrival increased 11%, source: The Ho Chi Minh City Department of Culture, Sports and Tourism). This development reflects the growing of travelling, enjoying, eating and drinking demand of a large number of hotel guests in a developing economy of Vietnam.
The firms in this industry need to pay attention to maintain business performance through building the brand loyalty and also recruit new users to develop themselves. This study aims to investigate which factor affecting brand loyalty and explores how these factors affect on brand loyalty. Keywords: key factors, hotel, brand loyalty 123doc 7 123doc CHAPTER 1 INTRODUCTION 1. Research background According to “Vietnam National Administration of Tourism Report” (2013), in the recent years, the international visitors came to Viet Nam increase continually: 5,049,855 turns (2010), 6,014,032 turns (2011) and 6,847,678 turns (2012), 2011-2013: total tourist arrival increased 11%, source: The Ho Chi Minh City Department of Culture, Sports and Tourism).
Besides, attracting the number of domestic visitors rapidly 28 million (2010), 30 million (2011) and 32. Capturing the trends and potential of hotel industry in Vietnam, the existing and new comers in this industry are facing with a strong competitive environment. The issue is how the firms in this industry survive and develop themselves. Research Problems In Vietnam, there are many hotels, resorts, restaurants are in business, and in parallel international visitors increase shapely, it is easy to understand the consumers have many choices to choose a place for their vacation.
The demands of consumer about the service quality, the product quality, etc. at the place they choose have to meet their needs. The big first purpose of any business is to satisfy their consumers. A happy consumer means better business.
Consumer satisfaction is essential to long-term business success, and one of the most frequently researched topics in marketing (e., Jones& Suh, 2000; Pappu & Quester, 2006). Loyalty comes from consumer satisfaction. Consumers become loyal when they feel satisfied from the quality of the service provided by the companies. Because consumer satisfaction has been regarded a fundamental determinant of long-term business success, much of the research on consumer 1 123doc satisfaction investigates its impact on consumers’ post consumption evaluations such as behavioral and attitudinal loyalty (Cooil, Keiningham, Aksoy, & Hsu, 2007).
It is widely accepted that satisfied consumers are less price sensitive, less influent by competitors’ attack and loyal to the firm longer than dissatisfied consumers (Dimitriades, 2006). This mean a satisfied consumer might spread the word about having a good experience, but a dissatisfied one will almost certainly complain to at least one person, recommending that their friends do not use your product and looking for another supplier themselves. This means less money and less business for a company, with a strong possibility that at least a quarter of the disgruntled consumers never deal with your business again. Ekinci et al.’s (2008) study is notable because it shows that service quality and ideal self-congruence are antecedents of consumer satisfaction.
They proposed these factors are key determinants of intention to return. With this parallel the concept and measurement of brand equity in the hotel industry has gained considerable attention from academicians, practitioners, and researchers in recent years (Bailey and Ball, 2006; Kim and Kim, 2005; Prasad and Dev,2000; Cobb-Walgren et al. Despite the availability of numerous definitions for brand equity in the literature, there is no common consensus about the meaning of brand equity and how a firm can measure the value of the brand (Bailey and Ball, 2006; Park and Srinivasan, 1994). This research shows others dimensions of consumer-based brand equity as brand identification and ideal self-congruence based on Ekinci et al.’s (2008) model of consumer satisfaction and Aaker’s (1991) model of brand equity.
Cai and Hobson (2004) suggest an integrated approach to successful brand development and brand loyalty by taking into account brand experiences. Accordingly, the effect of brand equity on brand loyalty is examined when consumers have direct experiences with brands (Brakus, Schmitt, & Zarantonello, 2009). 2 123doc This study aims to identify the impacts of consumer-based brand equity on consumer satisfaction, and how consumer satisfaction affects the brand loyalty when its role is as an intermediate factor in this research model. Research Objectives The research objectives are: - To identify factors affecting brand loyalty in Hotel industry.
- To determine the impact of each factor on brand loyalty in Hotel industry. Research Scope This study focuses on hotel consumers in Ho Chi Minh City; include three to five hotels, around big center districts at Ho Chi Minh City: district 1, 3, 5, Go Vap, Binh Thanh 1. Research Structure The below structure is implemented for this research: • Chapter 1: Introduction to introduce research background, research problem, research objective, research question, research scope and structure of the research. • Chapter 2: Literature review.
This chapter reviews theories and selects the research’s factors as well as formulates the research hypotheses and model. • Chapter 3: Research methodology. This chapter provides general idea how the research is designed and implemented. • Chapter 4: Data analysis, result and finding discussion.
This chapter translates data collected from survey, analyses data as well as discusses the result finding in connection with theory. 3 123doc • Chapter 5: Conclusion, implication, limitation and future research. This Chapter concludes the research finding, provides implication, further suggestion as well as research limitation. 4 123doc CHAPTER 2 LITERATURE REVIEW There are many previous studies for the factors that affecting brand loyalty in hotel industry.
In this study, key concepts of Consumer based Brand equity, Physical quality, Staff behavior, Brand identification, Consumer satisfaction and Brand loyalty and their roles and importance in business will be reviewed. Consumer-based brand equity Prasad and Dev (2000) identified hotel brand equity as the favorable or unfavorable attitudes, then the perceptions are formed and influence a consumer to book at a hotel brand represent the brand equity. According to Bailey and Ball (2006) hotel brand equity is viewed as “the value that consumers and hotel property owners associate with a hotel brand, and the impacts of these associations on their behavior”. Researchers also claimed that a hotel will have strong brand equity when a large number of customers have a favorable perception of and attitude toward the hotel brand.
Brand equity is a perception of belief that extends beyond mere familiarity to an extent of superiority that is not necessarily tied to specific action. Familiarity does not imply belief in superiority. Brand equity does not imply action, only perception. Commitment and loyalty also do not imply superiority, whereas brand equity does.152) Empirical research conducted by Kim and Kim (2005) on luxury hotels tests the consumer based brand equity and its effects on company performance.
Based on earlier research in the service industry (e., Ekinci et al.2008; Gronroos, 1984), study consists of four dimensions of customer based brand equity: two service quality dimensions—physical quality and staff behavior are incorporated to the consumer-based brand equity model. The third is ideal self-congruence and 5 123doc brand identification are also included to capture symbolic consumption of the hotel brands (e., Johnson, Herrmann, & Huber, 2006; Kim, Han, & Park, 2001). This research model proposes that the dimensions of consumer-based brand equity, physical quality, staff behavior, ideal self-congruence, brand identification have positive effects on brand loyalty via consumer satisfaction.2 Service quality: Physical quality and Staff behavior Service quality is defined as “an overall assessment of service by the consumer” (Lewis and Booms, 1983, cited in Ganguli and Roy, 2010). It is central to the development of strong service dominant brands because it helps to differentiate brands in competitive markets and help to enhances perceived superiority of the brands (Aaker, 1996; Low & Lamb, 2000; Yoo, Donthu, & Lee, 2000; Zeithaml, 1988).
Service quality also are described as a form of attitude, related but not equivalent to satisfaction based on the results from the comparison of expectations with performance (Bolton and Drew, 1991; Cronin Jr. and Taylor, 1992; Parasuraman et al. Service quality focus to the development of strong service domi- nant brands because it enhances perceived superiority of the brands and helps to differentiate brands in competitive markets (Aaker, 1996; Low & Lamb, 2000; Yoo, Donthu, & Lee, 2000; Zeithaml, 1988). The concept of service quality is widely accepted as multidimen- sional, but the content and number of its dimensions is still debated (Chao, 2008).
Besides that, service quality is an antecedent of the broader concept of consumer satisfaction (Gotlieb et al., 1994; Buttle, 1996; Zeithaml and Bitner, 1996; Lee et al., 2000) and the relationship between service quality and loyalty is mediated by satisfaction (Caruana, 2002; Fullerton and Taylor (2002). Service quality is often highly dependent on the customer’s contacts and relations with the employees. His trust is often 6 123doc more related to a specific person than to the company (Thomasson, 1993). Many researchers suggested that high service quality resulted in high consumer satisfaction (Parasuraman, Zeithaml, and Berry, 1985, 1988).
The model of service quality best known as the SERVQUAL model of The North American School of Thought consists of five service quality dimensions: tangibles, reliability, responsiveness, assurance and empathy (Parasuraman, Zeithaml, & Berry, 1988). Although the SERVQUAL model had been applied by many research and academics, validity of the model is seriously questioned and being researched by many studies. One of disagreements is about the exact number of dimensions and its suitability to a specific service sector (Buttle, 1996). The view of Nordic School is service quality consists of two dimensions: technical quality and functional quality (Gronroos, 1984).