Customer based brand equity a study of trung nguyen coffee in viet nam

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 findi

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

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

TABLE OF CONTENTS

CHAPTER I INTRODUCTON 1

1.1 Background of research 1

1.2 Research problem and purpose 3

1.3 Research objective 3

1.4 Scope of the study 4

1.5 Contribution of the study 5

1.6 Organizational structure of the study 5

CHAPTER II LITERATURE REVIEW & THEORETICAL FRAMEWORK 7

2.1 Concepts & Definitions 7

2.1.1 Overview of branding 7

2.1.2 Brand equity 9

2.1.3 Customer based brand equity 11

2.1.4 Aaker’s Brand Equity Model 12

2.2 Research model 15

2.2.1 Brand awareness 16

2.2.2 Brand association 17

2.2.3 Brand loyalty 18

2.2.4 Perceived quality 19

CHAPTER III RESEARCH METHOD 21

3.1 Research methodology 21

3.2 Quantitative approach 21

3.3 Questionnaire design 22

3.4 Sampling 27

3.5 Pilot test 28

3.6 Data collection 28

3.7 Data analysis 29

CHAPTER IV DATA ANALYSIS & DISCUSSIONS 32

4.1 Respondent demographic profile 32

4.1.1 Sample demographic 33

4.1.2 Central tendencies measurement of construct 34

4.2 Evaluation and refinement of measurement scale 36

4.2.1 Reliability analysis 36

4.2.2 Exploratory factor analysis 39

4.2.2.1 EFA results for measurement scales of independent factors 40

4.2.2.2 EFA results for measurement scales of dependent factor – brand equity 42

4.2.2.3 Testing the relationship of independent factors and dependent factor 42

4.3 Hypothesis testing 44

4.4 Discussion 48

CHAPTER V CONCLUSIONS & RECOMMENDATION 49

5.1 Conclusion 49

5.2 Recommendation 50

5.2.1 Perceived quality 51

5.2.2 Brand loyalty 53

5.2.3 Brand association 55

5.3 Limitation and future research 57

REFERRENCES 59

APPENDIX A 65

APPENDIX B 71

APPENDIX C 78

LIST OF TABLES

Table 3.1: Measurement scale 23

Table 4.1: Demographic profile 30

Table 4.2: Descriptive statistics 33

Table 4.3: Reliability Statistics 37

Table 4.4: Rotated component matrix 41

Table 4.5: Cronbach‟s alpha after EFA 42

Table 4.6: Pearson correlation 43

Table 4.7: Model summary 45

Table 4.8: The coefficients 46

Table 4.9: The hypotheses testing result 47

LIST OF FIGURES

Figure 2.1: Brand equity 10

Figure 2.2: Aaker‟s Brand Equity Model 14

Figure 2.3: Research model 15

Figure 3.1: Research design 19

Figure 4.1: Final model of the study 44

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

CHAPTER I INTRODUCTON 1.1 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

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

branding and always tried to build its brand to become a high-class brand of coffee for customers who have high income

1.2 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

1.3 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.e., brand awareness, brand association, perceived quality and brand

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?

1.4 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

1.5 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

1.6 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 Next, data analysis and discussion chapter is for analyzing and discussing about the results based on the data collected Then, conclusion and

recommendations are figured out in order to help answer the research question, make suggestions and also provide some basic for further study

CHAPTER II

LITERATURE REVIEW & THEORETICAL FRAMEWORK

This chapter provides the general of previous studies on the concepts and definitions of branding, and theoretical related of building brand equity as well; and the research model will also be presented later in this chapter

2.1 Concepts & Definitions

In the past, when brands were put on prodSucts with their features, characteristics and logos to differentiate them from others, brands were perceived by customers as the sources of the products that protected and prevented both the customers and the producers from competitors who try to make the same products (Aaker, 1991) This has become a traditional approach that ascertains brands as the visual feature of a product to help distinguish it from another product

However, the conditions of current market have changed due to the fact that it is getting harder to recognize one product from others and build brands nowadays compare with the past of a few decades ago (Aaker, 1991) Therefore, the traditional approach with the mechanism of differentiating by focusing too much on products and emphasizing

on visual features is no longer suitable to the current market environment (Arnold 1992; Crainer 1995)

In recent years, there has been a shift from product focus to a brand focus The new approach is the holistic perspective in which the brand itself is the main focus point (Wood, 2000) Brand is underlined as an image in consumers‟ minds by this approach (Keller 1993), brand personality (Aaker, 1996) and brands as added value (De Chernatony & Mcdonald 1992; Doyle 1994) Hence, the product is only one attribute of the brand under this approach

This branding approach has been broadly accepted by researchers (Aaker, 1991; Keller 1993) The brand is seen to provide benefits to the customer in both physical and emotional needs, while the product can only satisfy the customer‟s physical needs A brand is therefore defined as “a product that provides functional benefits plus added values that some consumers value enough to buy” (Aaker, 1991, p.1) Stephen King states that “A product is something that is made in a factory; a brand is something that is bought by a customer A product can be copied by a competitor, a brand is unique A product can be quickly outdated, a successful brand is timeless.” (Aaker, 1991, p.1)

As a consequence, brands are now perceived as the key success element for

share for firms by differentiating (Wood, 2000) Moreover, the attributes that differentiate brands from other products provide the customer with satisfaction and benefits for which they are willing to pay (Wood, 2000) In other words, brands create added value to both firms and customers Brands play an important role in increasing the value of products and protecting products from being imitated by competitors (Aaker, 1991) Therefore, a strong brand is counted as a valuable asset of a company (Aaker, 1991)

2.1.2 Brand equity

Since the term “brand equity” emerged in the 1980s, there has been a growing interest in this subject among academic marketers and practitioners (Cobb Walgren, et al., 1995) Many arguments about the meaning of the term brand equity have been raised

in different ways and for a number of different purposes (Keller, 2002) Brand equity is the difference between overall brand preference and multi-attributed preference based on objectively measured attribute levels (Park & Srinivasan, 1994); overall quality and choice intention (Agarwal & Rao, 1996)

Brand equity is one of the significant concepts in brand management, as well as in business practice and academic research (Kim et al., 2008) Developing and properly managing brand equity has been emphasized as an important issue for most firms (Hao et al., 2007) Because, it can help firms to gain or increase their cash flow to the business, and make products differentiation in order to lead to competitive advantages (Yoo et al., 2000; Aaker, 1991) Thus, brand equity is been appreciated as one of the most valuable intangible assets by most firms (Hao et al., 2007)

One of the most popular definitions widely accepted in the branding literature is that by Aaker (1991, p 15) Aaker (1991) defined brand equity as “a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm‟s customers” (Aaker,

1991, p 15) The assets and liabilities in which brand equity is based that he proposed are divided into five dimensions (Aaker, 1991): Brand loyalty, Name awareness, Perceived quality, Brand associations, other proprietary brand assets – patents, trademarks, channel relationship, etc

Figure 2.1: Brand equity

(Source: Aaker, 1991)

2.1.3 Customer based brand equity

Brand equity is conceptualized from the perspective of the individual consumer and a conceptual framework is provided of what consumers know about brands Customer based brand equity is defined as the differential effect of band knowledge on consumer response to the marketing of the brand (Washburn and Plank, 2002) Proponents argue that for a valuable brand must be valued by the customer

In one of the earliest and most popular definitions of brand equity from the viewpoint of individual consumers, brand equity is viewed as added value reflected by increasing the attitudinal strength for a product using the brand (Farquhar, 1989) The consumer attitude is explained as the link between an „object‟ and the „evaluation‟ of that object saved in an individual‟s memory For a customer, a strong brand is based on three critical elements: a positive brand evaluation; a clear brand attitude; and a reliable brand image According to Martin and Brown (1990), brand equity is an impression of a brand, which represents the whole of a consumer‟s perception about that brand Sharing this argument, Blackston (1992) describes brand equity as consumer‟s ideas about the brand Further, Edell (1993) supposes that brand equity is the difference between the consumer‟s evaluation of a branded product and an unbranded product with the same attributes

It can be said that the most widely accepted definition of consumer based brand equity arises when the customer is acquainted with the brand and keeps some favorable, solid and unique brand associations in memory (Keller, 1993) Moreover, Keller defines brand equity as impact of different brand knowledge on the customer response to the marketing of the brand in which brand knowledge is theorized, based on an associative

network memory model in terms of two factors, brand image and brand awareness (Keller, 1993, p 1) Therefore, as said by this definition, a brand is said to have positive customer based brand equity if customers react more favorably to the product, promotion, price or distribution of the brand than they do to the same marketing mix element when it

is attributed to a fictitiously named or unnamed version of the product or service (Keller, 1993)

A thorough understanding of brand equity from the customer‟s point of view is essential for successful brand management As Keller (1993) explained, positive customer based brand equity can create greater revenue and higher profit, reduce cost It has direct influences on the firm‟s ability to charge higher prices, a customer‟s willingness to look for new distribution channels, the efficiency of marketing communications, and the success of the extensions of brand and licensing opportunities (Keller, 1993)

2.1.4 Aaker’s Brand Equity Model

Customer based brand equity is a multidimensional construct consisting of various attitudinal and/or behavioral components (Anantachart, 1998) However, most of customer based brand equity models are measured by attitudinal components As the most common constructs of measurement models are brand image or brand association (Kim & Kim, 2004; Martin & Brown, 1990; Pappu et al., 2005; Washburn & Plank 2002; Yoo et al., 2000); brand awareness (Holden & Lutz, 1992; Nguyen & Nguyen, 2003; Washburn & Plank, 2002; Yoo et al., 2000) and brand preference (Anantachart, 1998;

some research as parts of the combination of attitudinal components of customer based brand equity, brand performance (Lassar et al., 1995) and brand loyalty (Kim & Kim, 2004; Nguyen and Nguyen, 2003; Washburn & Plank, 2002; Yoo et al., 2000) In empirical studies, to measure brand equity, the Aaker‟s brand equity model (1991) has usually been used (Baldauf et al., 2003; Cobb-Walgren et al., 1995; Kim & Kim, 2004; Washburn & Plank 2002; Yoo et al., 2000) This model was one of the first published studies that conceptualized brand equity from the perspective of customer, combining both the attitudinal and behavioral aspects of brand equity It probably provides the most comprehensive framework for examining brand equity (Anantachart, 1998)

This model groups the assets that make up brand equity into five dimensions that are perceived quality, brand associations, brand awareness, brand loyalty and other proprietorial brand assets These categories are the fundamental cornerstones and symbolize crucial pieces in the process of enhancing brand equity Asaker‟s brand equity model can be looked upon as a puzzle that more value will be achieved as the whole puzzle is correctly fitted

Figure 2.2: Aaker’s Brand Equity Model

Source: (Aaker, 1991, p 17) Many former studies and researches assessing the applicability of Aaker‟s (1991) model show encouraging results The first study which adopted Aaker‟s (1991) model to measure consumer-based brand equity was the study of Cobb-Walgren et al (1995), which included four dimensions: brand loyalty, perceived quality, brand awareness and brand association Meanwhile, Sinha & Popkowsi Lesczyzc (2000) and Sinha & Pappu (1998) adapted Aaker‟s (1991) model to measure customer based brand equity using

Brand Equity (Name Symbol)

Provides Value to firm by enhancing:

 Efficiency and Effectiveness of Marketing Program

Bayesian methods (Pappu et al 2005) In addition, this model has also been tested in other empirical studies such as Kim and Kim (2004); Vazquez, Del Rio &Iglesias (2002), and Washburn & Plank (2003) and found to reliable and valid

2.2 Research model

Base on the literature review discussed above, Aaker‟s brand equity model (1991)

is chosen to be applied in this study of Vietnam‟s coffee brand The original model presented by Aaker (1991) comprises of five dimensions: brand awareness, brand associations, brand loyalty, perceived quality and other brand assets The five dimensions are tested with the overall evaluation of customers And with Aaker‟s brand equity model, this study is conducted to retest the measurement of customer based brand equity with four dimensions that are brand awareness, brand associations, brand loyalty and perceived quality, which is shown in following figure:

Figure 2.3: Research model

Brand equity

Brand awareness (H1+)

Brand association

s (H2+)

Brand loyalty (H3+)

Perceived quality (H4+)

In the research model, the independent variables are separated into four categories, which are brand awareness, brand associations, brand loyalty and perceived quality The four categories of chosen independent variables will influence on the dependent variable, which is Brand equity

2.2.1 Brand awareness

Brand awareness refers to the strength of the presence of a brand in consumers‟ minds and is a principal component of brand equity (Aaker, 1991; Keller, 1993) Brand awareness may be a signal of quality and commitment, let customers become familiar with a brand and make them consider it at the point of purchase (Aaker, 1991)

Aaker (1991) mentioned many levels of brand awareness, ranging from simple recognition of the brand to dominance, which states the condition that the brand involved

is the only brand a consumer recalled Aaker (1991, p 61) describes brand awareness as the potential buyer‟s ability to recognize and recall that a brand is a member of a certain product category According to Keller (1993), brand awareness consists of two sub dimensions: brand recall and recognition Keller (1993) explains brand recall as the ability of retrieving the brand from memory of customers, for example, when the product category or the needs fulfilled by the category are mentioned Keller (1993) also argued that brand recognition may be more important to the extent that product decisions are made in the shop

Brondoni (2001) argued that level of awareness become a critical factor when competitors‟ offers are related to a condition of direct comparability and other factors of

selection Brand awareness plays an important role in brand equity such as consumers think about the brand when they think about the products/services so raising brand awareness increases the likelihood that the brand will receive repeated consideration of purchase Customer based brand equity happens when customers have a high level of awareness and familiarity with the brand and hold some strong, positive, and unique brand associations in memory Thus, the following hypothesis is posited:

H1: Brand awareness has a positive effect on brand equity

2.2.2 Brand association

Brand association is described as the information nodes linked to the brand node

in memory that results in the meaning of the brand for consumers (Keller 1993) The favorability, strength and distinctiveness of brand association are the brand knowledge‟s dimensions, which is the source that creates the differential response of the customer, creating brand equity (Keller 1993)

Aaker (1991) positions brand association as the most accepted dimension of brand equity, including product attributes; customer benefits; uses; users; lifestyles; product classes; competitors; and nations Brand association can help the customer to process or

to retrieve information Further, Aaker (1991) suggested that brand associations could provide value to the consumer by providing a reason for consumers to buy the brand and creating positive attitudes/feelings among consumers Rio et al (2001) also proposes that brand associations are a key element in brand equity formation and management Generally, brand association is what customers hold in their mind about a brand related to

their needs and demands (Wood 1998) In this respect, high brand equity implies that consumers have strong positive associations with respect to the brand Thus, the following hypothesis is posited:

H2: Brand association has a positive effect on brand equity

2.2.3 Brand loyalty

Brand loyalty is a main component of brand equity Aaker (1991, p 39) describes brand loyalty as a condition, which reflects the possibility that a customer will switch to another brand, especially when that brand changes, either in price or in product traits Javalgi and Moberg (1997) defined brand loyalty consistent with behavioral, attitudinal, and choice perspectives

Whereas behavioral perspective is based on the amount of purchases for a certain brand, attitudinal perspective combines consumer preferences and natures towards brands, definitions of choice perspective concentrates on the purposes of purchasing or the factors that may influence on choices These brand loyalty definitions were empirically researched under three major categories: behavioral approach, attitudinal approach and multi domain approach (Rundle-Thiele & Bennett, 2001)

Brand loyalty is also conceptualized based on an attitudinal perspective Chaudhuri and Holbrook (2001) argued that attitudinal brand loyalty includes a level of dispositional commitment about some unique value attached to the brand From an attitudinal perspective, Yoo and Donthu (2001) defined brand loyalty as the tendency of

being loyal to a main brand, which is determined by the intention to buy the brand as a first choice

Aaker (1991) states that, brand loyalty is a measure of the attachment that a customer has to a brand Subsequently, Oliver (1997) explains brand equity as “a deeply held commitment to rebury or re-patronize a preferred product or service consistently in the future, deposit situation influences and marketing efforts having the potential to cause switching behavior” Thus, brand loyalty is believed to be one of important brand equity

dimension Thus, the following hypothesis is posited

H3: Brand loyalty has a positive effect on brand equity

2.2.4 Perceived quality

Perceived quality is the core component across the CBBE framework (Aaker, 1996; Farquhar, 1989) It is not the actual quality of the product but the customer‟s perception of the overall quality or superiority of the product (or service) with respect to its intended purpose, relative to alternatives (Zeithaml, 1988) It is a competitive necessity and many firms today have turned customer driven quality into a powerful strategic tool They create customer satisfaction and value by consistently and profitably meeting needs of customer and their preferences for quality

Kotler (2000) drives attention to the close connection among customer satisfaction, product and service quality, and company profitability Perceived quality contributes value to a brand in several ways: high quality makes up good reason for consumers to buy the brand and allows the brand to separate itself from other competitors, to charge a premium price, and to have a strong basis for the brand

extension (Aaker, 1991) Marketers across all product and service categories have gradually recognized the importance of perceived quality in brand evaluations (Morton, 1994)

H4: Perceived quality has a positive effect on brand equity

CHAPTER III

RESEARCH METHOD

This chapter demonstrated how the research is carried out in terms of research

design, sample size, sampling method, data collection method, and data analysis

3.1 Research methodology

This research adopted Quantitative method, included:

- Primary data: customer survey

- Secondary data: literature review, articles, research papers, books, etcs

The research follows Quantitative approach to conduct customer survey Primary data will be collected for analyzing and coming up with findings in the later section

3.2 Quantitative approach

Malhotra and Birks (2006) introduce quantitative research is a research manner which seeks to quantify data; especially, it employees some form of statistical analysis Indeed, Parasuraman (1991) argue quantitative research is a form of conclusive research involving large representative samples and fairly structured data collection procedures

He also explained that quantitative research is comprised by large-scale questionnaire survey or structure observation in conclusive research projects Again, Veal (2006) defines that quantitative research including statistical analysis that relies on numerical evidence to draw conclusions or to test hypotheses, often, it is essential to research

relatively large numbers of people and to utilize computer to analysis the data to be sure

of the reliability of the results

3.3 Questionnaire design

The purpose of the questionnaire survey is to develop empirical evidence and measure brand equity in Trung Nguyen Coffee based on the customer perspective The questionnaire is designed to directly collect data from the customers The language of the questionnaire is simple, clear and easy to understand and answer The statements in the questionnaire are clear and short, avoids making the respondents confused

There are two parts in the questionnaire The first part includes some demographic questions to collect personal information about customers of Trung Nguyen Coffee The second part consists of questions for measuring brand equity and the dimensions of brand equity including brand awareness, brand association, brand loyalty and perceived quality

The 5-points Likert scale is applied to measure in the questions about brand equity and its dimensions mentioned above According to Cooper et al (2006), the likert scale, which was developed by Rensis Likert, is the most commonly used variation of the summated rating scale It comprises statements expressing either a favorable or an unfavorable attitude toward the object of interest Respondents are asked to indicate their level of agreement with a given statement by the way of a 5-point scale ranging from

“Strongly Disagree” on one end to “Strongly Agree” on the other with “Neither Agree nor Disagree” in the middle as following: 1) Strongly disagree 2) Disagree 3) Neither agree nor disagree 4) Agree 5) Strongly agree

The questionnaire was initially designed in English The original English version was then translated into Vietnamese Back-translation is necessary in this study because English is not commonly used and understood by customers in the market being studied, i.e Viet Nam The original and Vietnamese versions of the questionnaire were compared

to ensure the equivalence of meanings of the items, and were refined where necessary

The concepts of scaling and measurement should be considered if the marketing researcher has a clear understanding of what they want to know in their target respondents (Malhotra and Birks, 2006) Summers (1970) defined a typical definition of measurement is “the assignment of numbers to observations (or responses) according to some set of rules”

Malhotra and Birks (2006) suggest that measurement means passing on numbers

or other symbols to distinctive of objects according to certain pre-specified rules The specification of rules for passing on numbers to the characteristics is the most important feature of measurement It is very important that the marketing researcher develop operational definitions of the concepts to be measured and that these are stated clearly Theory plays an important role in measurement; there can be no measurement without theory (Malhotra and Birks, 2006)

Parasuraman (1991) declare that the first step in developing a measure to be used

in marketing study is to devise the type of response scale that can be correctly performed

by using the collected data Malhotra and Birks (2006) argued that scaling may be

“considered an extension of measurement” Scaling involves creating the answering from the respondents and measured the objects located are In this project, likert scale has been

using for questionnaire measurement, because it is a widely used rating scale that requires the respondents to indicate a degree of agreement or disagreement with each of a series of statements about the stimulus objects (Miller and Salkind, 2002) In general, likert scale

is used to measure respondents attitudes of the product; it is easy to construct administer and understand Information on brand equity dimensions of brand equity and selected 6 promotional activities were collected by survey questionnaire The entire of measurements will be presented in following table

The measurement scale was shown in table 3.1, as below Overall, the questionnaire was designed a survey including all constructs of the conceptual model to text or investigate the hypotheses; the questions are based on previous theoretical discussion (See appendix A)

Table 3.1: Measurement scale

5 points Likert scale

BAW2 Some characteristics of Trung Nguyen

Coffee come to my mind quickly

5 points Likert scale

BAW3

I am familiar with Trung Nguyen Coffee and know what it‟s logo look like

5 points Likert scale

BAW4 When refer to premium roasted coffee,

I think of Trung Nguyen Coffee first

5 points Likert scale Brand

Association BAS1

Trung Nguyen Coffee is a premium coffee brand

5 points Likert scale

BAS2

Trung Nguyen Coffee has very unique brand image, compared to competing brands

5 points Likert scale

BAS3 I like and trust the company, which

creates Trung Nguyen Coffee

5 points Likert scale

BAS4

I am impressed with Trung Nguyen Coffee‟s customers for the same interest of using Trung Nguyen Coffee

5 points Likert scale

BAS5 I‟d like to be Trung Nguyen Coffee‟s

customer because I like its style

5 points Likert scale

BAS6

I‟d like to be Trung Nguyen Coffee‟s customer because I like its advertisements

5 points Likert scale

Perceived

quality

PQU1 Trung Nguyen Coffee‟s products have

very good tastes

5 points Likert scale

PQU2

Trung Nguyen Coffee‟s products are diverse and very well designed and decorated

5 points Likert scale

PQU3 Trung Nguyen Coffee‟s employees

work quickly and neatly

5 points Likert scale

PQU4 Trung Nguyen Coffee‟s employees are

courteous and professional

5 points Likert scale

PQU5

Trung Nguyen Coffee shops have nice and reasonable decoration and interior design

5 points Likert scale

PQU6 Trung Nguyen Coffee shops have

good and modern facilities

5 points Likert scale

PQU7 Trung Nguyen Coffee shops have

relaxed and friendly atmosphere

5 points Likert scale

PQU8 Trung Nguyen Coffee‟s quality is well

worth for money

5 points Likert scale

PQU9 I highly appreciate Trung Nguyen

Coffee brand for its quality

5 points Likert scale

Brand loyalty

BLO1 Trung Nguyen Coffee is always my

first choice

5 points Likert scale

BLO2 I consider myself to be loyal to Trung

Nguyen Coffee

5 points Likert scale

BLO3

I will go to other coffee brands if Trung Nguyen Coffee closed or has no seats for available

5 points Likert scale

BLO5 I will go to Trung Nguyen Coffee

more often

5 points Likert scale

BLO6 I will buy many of other products of

Trung Nguyen Coffee

5 points Likert scale

5 points Likert scale

BEQ3

Trung Nguyen Coffee is the leading brand in premium roasted coffee market in Vietnam

5 points Likert scale

BEQ4

Even if another coffee brand has the same products, style and features as Trung Nguyen Coffee, I would prefer

to buy Trung Nguyen Coffee

5 points Likert scale

BEQ5

If there is another coffee brand as good as Trung Nguyen coffee, I would prefer to buy Trung Nguyen coffee

5 points Likert scale

3.4 Sampling

Firstly, the population of the study needs to be chosen Population is defined as the complete set of units of analysis that are under investigation (Davis, 2000) This study focuses on investigating the effect of brand equity‟s dimensions on Trung Nguyen Coffee‟s brand equity The empirical study is conducted in the Ho Chi Minh market in order to test the theoretical model Therefore, the population of the study is Vietnamese customers of Trung Nguyen Coffee in Ho Chi Minh City, the major commercial city of Vietnam

Next step is estimating the sample size The sample size in this study is 258 Gorsuch (1983) and Hatcher (1994) recommended a minimum ratio of subject to variable

is at least 5:1 if Exploratory Factor Analysis is used to analyze the data, and noting that higher ratios are usually better In this study, the number of variables supposed to be 30,

so the sample size of 258 gives the ratio is above 8:1 Comfrey and Lee (1992) recommended that the suitability of sample size might be evaluated very generally on the following scale: 50 – very poor; 100 – poor; 200 – fair; 300 – good Therefore, in this study, the size of 250 for sample is considered suitable for the study

Due to the limit of time, budget and human resources, convenience sampling method is used in this study as the most suitable one It based on convenience or ease of the objects‟ approach, where the investigators are more likely to meet the objects

Moreover, the population in this study is unknown, so Convenience Sampling is the most feasible

3.5 Pilot test

The stage of data gathering of the research process begins with pilot testing which can be understood as a trial run of techniques and instruments that you plan to use Pilot testing is conducted to find weakness in design and instrumentation and to provide proxy data for selection of a probability sample Cavana et al (2001) suggested that a questionnaire should be piloted with a reasonable sample of respondents coming from the target population Therefore, in this research, pilot test has been conducted with the sample of 20 people to test the clarity and meaningfulness of the questions Each of them was told the purpose of the questionnaire and the guarantee of anonymity before they were given the questionnaire to respond to

The result shows that the words and statements in the questionnaire are simple and clear The questions are easy for customers to understand and answer without ambiguous and/or confused statements The questionnaire designed in the form of multiple choices makes it convenient, easy and takes a little time to fill It also has the ability to stimulate willingness to answer in respondents Therefore, the questionnaire is considered qualified and the next stage was conducted

3.6 Data collection

- Primary data:

 The target group of respondents for this survey is the customers of Trung Nguyen Coffee in Ho Chi Minh City At the beginning, questionnaires are printed out and delivered to the respondents directly The questionnaires are collected right after customers fill in In addition, the questionnaire is also designed as an online form with the same structure and questions with printed ones using sent by email to respondents Beside, snowball sampling technique is also used Firstly, questionnaires are sent to the friends, classmates, family, etc., and then they were asked to distribute questionnaires to other respondents via their social networks The questionnaires were sent to total number of about 300 people, and collection

of data was conducted in two weeks

 The research is mainly conducted at four office building Saigon Trade Center, Saigon Center, Bitexco Financial Tower, Centec Tower in Hochiminh City

(SPSS 20.0) computer software was applied SPSS is a good first statistical package for people who want to do quantitative research in business because it is easy to use and a suitable starting point to learn more advanced statistical packages (Harvard-MIT Data Center, 2009) The data collected from the survey was tested using statistical techniques such as:

Descriptive Statistics: Descriptive statistics involve the process of transforming of raw data to a form that will provide information for describing a set of factors in a situation Descriptive statistics provides frequencies, measures of central tendency and dispersion

Reliability Test: According to Cavana et al (2001), “Cronbach‟s alpha is a reliability coefficient that indicates how well the items in a set are positively correlated to one another Cronbach‟s alpha is computed in terms of average intercorrelations among the items measuring the concepts” The value of this coefficient can vary from 0 to 1 The value of 0.8 or higher of an alpha coefficient was proposed to be accepted by Bryman and Cramer (1990) However, according to Nunnally (1978), the value of 0.6 and above is acceptable, especially for initial investigations

Factor Analysis: Factor analysis examines and compares the way each respondent completed the opinion items to come up with the suggestion that certain items are included in particular factors/clusters (Cavana et al, 2001), which reduce dimensions to fit each situation In this study, this technique is used to identify critical factors determining customer based brand equity

Regression Analysis: Regression analysis examines the simultaneous effects of several independent variables on a dependent variable that is in interval scale Therefore,

it was applied to show us how much of the variance in the brand equity is explained by the set of brand equity‟s dimensions based on the perspective of customer

CHAPTER IV

DATA ANALYSIS & DISCUSSIONS

This chapter presents the results of the data analysis The data analysis & discussion part is divided into the following sections: response demographic profile, descriptive analysis, reliability test, factor analysis, and multiple regression analysis

4.1 Respondent demographic profile

4.1.1 Sample demographic

Demographic questions provide an overview, results and evaluation of respondents towards Trung Nguyen Coffee‟s customers In this section, demographic data is summarized into important categories such as gender, age, profession and income; hence, this study shows groups of Trung Nguyen Coffee‟s potential customers Moreover, based on this information, the research also compares the different opinions between subgroups

300 questionnaire surveys were delivered to respondents in Ho Chi Minh City Among 300 surveys, there were 238 surveys got back and valid After the process of editing data, a total of 238 valid questionnaire surveys were collected and analyzed by SPSS software

Table 4.1 above shows the information about the percentage of male and female respondents who participated in the questionnaires survey It represents that there have 41.6% of male and 58.4% female respondents who took part in the questionnaires

According to table 4.1 also, there have 9.24% of respondents are below 20 years old, 77.73% within 21-35 years old, 11.77% who around 36-50 years old and 1.26% who are above 50

The larger group in this dimension is the group with the occupation of officers, who working and being able to earn money by themselves at departments, offices and something like that takes account for more than one haft of the sample with 50.84% The percentage of workers, those who have a job that the research conducted in is relatively high, totally 38.24% Students take little of percentage of overall, with only 1.26% From