Key factors influence brand trust and brand loyalty: a study on smartphone consumers

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Truong Hong Ky KEY FACTORS INFLUENCE BRAND TRUST AND BRAND LOYALTY A STUDY ON SMARTPHONE CONSUMERS MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Truong Hong Ky KEY FACTORS INFLUENCE BRAND TRUST AND BRAND LOYALTY A STUDY ON SMARTPHONE CONSUMERS ID: 22110033 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr Tran Ha Minh Quan Ho Chi Minh City – Year 2014 Acknowledgement I would like to express my sincere gratitude to my supervisor, Dr Tran Ha Minh Quan for the valuable supervision, the support and encouragement he gave me I would like to express my gratitude to my ISB class friends for thesis support and direction Your encouragement, friendly guidance and critical comments have greatly contributed to this thesis Finally, I would like to thank all of the respondents without whom, this research would have been difficult to make Truong Hong Ky July, 2014 Abstract In each industry, there is a competition between companies to win customers’ trust and make them become loyal Customers, after getting the satisfaction of the product/service they consume, come to ask for value, belief, social status and life style orientation that company/brand makes When customers become more loyal to the brand? The most important reason is that product or service meets their expectation and demand More than that, brand has to come with distinctive message and build a social status that customers need to fulfill their selfdefining This study is conducted to find out the key factors affect brand loyalty and brand trust This context of this research is technology equipment smartphone The factors found have explaind how customers maintain loyalty with smartphone product The results indicate all dependent factors : (1) Brand Identity (BI), (2) Brand Identification (BID), (3) Customer Satisfaction (CS) have significant impact on dependent variavles (4) Brand Trust (BT) and (5) Brand Loyalty (BL) Brand Trust also has strong impact on Brand Loyalty The last part of this study gives some recommendation to brand executives and marketing practitioners to gain trust and win loyalty of customers Tables Of Content Research Formulation 1.1 Background 1.2 Research Problem 1.3 Research Objective 1.4 Research Scope 1.5 Significance 1.6 Structure Of Thesis Literature Review 2.1 Brand and Brand Loyalty 2.2 Brand Trust 2.3 Customer Satisfaction 2.4 Brand Identity and Brand Identification 2.4.1 Kapferer’s Brand Identity vs Brand Image 2.4.2 Brand Identity in other research journal 10 2.4.3 Brand Identification 11 2.5 Research Model and Hypothesis Research Method 12 17 3.1 Research Process 17 3.2 Measurement Scale 20 3.3 Data Analysis Method 21 3.3.1 Source of Data Summary 21 3.3.2 Sampling 22 3.3.3 Data Analysis Method 22 Research Result And Discussion 24 4.1 Descriptions of Sample 24 4.2 Measurement Scale Assessment 28 4.3 Exploratory Factor Analysis 30 4.3.1 EFA Analysis results for measurement scales of independent factors (Brand Identity, Brand Identification, Customer Satisfaction) 31 4.3.2 EFA Analysis results for measurement scales of dependent factor (Brand Trust, Brand Loyalty) 4.4 Multi-Linear Regression Analysis for hypothesis testing 33 34 4.4.1 Checking Regression Assumptions 35 4.4.2 Hypothesis Testing 38 4.4.2.1 Testing hypothesis on the impact of independent factors on Brand Trust 39 4.4.2.2 Testing hypothesis on the impact of independent factors on Brand Loyalty 4.5 Discussion 40 42 4.5.1 Regression analysis result 42 4.5.2 Brand Identity Finding 42 4.5.3 Brand Identitfication Finding 43 4.5.4 Customer Satisfaction Finding 43 4.5.5 Brand Trust Finding 43 4.6 Summary 44 Conclusions and Implications 45 5.1 Research Overview 45 5.2 Key finding 45 5.3 Managerial Implication 46 5.4 Contribution of the study 47 5.4.1 Contribution of theory 47 5.4.2 Contribution to practical 47 5.5 Limitation Reference Appendix 47 49 LIST OF TABLE Table 1: List of Hypothesis 15 Table 2: Summary of the concept studied 16 Table 3: Descriptive Statistics of Sample 21 Table 4: Description Table 26 Table 5: Reliability Analysis Results 28 Table 6.1: Correlation Matrix 31 Table 6.2: EFA Analysis for independent variables after running 31 Table 6.3: Total Variance Explained for independent factors 32 Table 6.4: Rotated Component Matrix for independent variables 32 Table 7.1: EFA Analysis for dependent variables after running 33 Table 7.2: Total Variance Explained for dependent factors 33 Table 7.3: Rotated Component Matrix for dependent variables 34 Table 8: Collinearity Statistics for two dependent variables 35 Table 9.1: Multiple Regression result with dependent Brand Trust 39 Table 9.2: Research Result of what positively influence Brand Trust 40 Table 9.3: Multiple Regression result with dependent Brand Loyalty 40 Table 9.4: Research Result of what positively influence Brand Trust 42 LIST OF FIGURE Figure 1: Proposed Research Model 16 Figure 2: Research Process 19 Figure 3.1: Gender 24 Figure 3.2: Age 25 Figure 3.3: Degree 25 Figure 3.4: Job Position 25 Figure 3.5: Income 26 Figure 3.6: Brand Used 26 Figure 4.1: Normality of the residuals 37 Figure 4.2: Histogram 38 Figure : Research Regression Result 44 Chapter 1: Research Formulation This chapter indicates the context of this study, including a short introduction of smartphone industry in Vietnam, the purpose of this study, research problem statement, research scope and methodology 1.1 Background Vietnam smartphone market is growing fast According to Vietnamese Online Jounal of Investment, in December of 2013, the International Market Rearch GFK showed a result that Vietnam’s smartphone market has the rapid growth in the South-East of Asia Referring to the result, after months of 2013, the growth rate of this market in Vietnam is 156% to 2012 According to Google statistics, at the end of quarter of 2013, the number of smartphone users in Vietnam is 17 millions This number is rising in the near future In the middle of 2013, the proportion of smartphone among handphone device is 38% (*) This technology industry attract millions of consumer Smartphone becomes a very convenient product with many useful features A good looking and high-rated smartphone is an image of life style In October of 2013, at a Technology Conference, Thinh Pham, Wada Technological Application Buider Representative, stated that we are watching the age of smartphone Many significant facts are shown First, smartphone users in Vietnam takes 20% of Vietnam population Second, smartphone is the popular device to access Internet in Vietnam 60% of smartphone users tend to shop online, 97% of them search for information Smartphone users tend to access Internet and social media(**) Smartphone industry turns to be impactful and so potential In addtion, as the price of a smartphone has become reasonable, smartphone segment can attract more potential consumer in low-price market (*): Retrieved from: http://www.baodautu.vn/thi-truong-smartphone-viet-mieng-banh-beobo.html (**): Retrieved from: http://vietnamnet.vn/vn/cong-nghe-thong-tin-vien-thong/136651/google-17-trieu-nguoi-vn-dang-dung-smartphone.html Within the smartphone market in Vietnam, the competition between handphone producers/brands become more fiere and vigorous The prestigous world-wide handphone producers Apple, Samsung, Nokia, LG, HTC… is competing to take over the market of Vietnam Many new-comers like Huawei and Oppo try to get into this potential market Some China producers also launch product targeting low-price market This industry keeps on growing fast and the penetration phase is almost over In order to maintain competitive advantage, smartphone company has to invest a lot on R&D to meet many new demands of consumer and follow the technology innovation which keeps changing over time As the result, top brand also introduce their newest products to the consumer in Vietnam as the same time as in other potential markets Every quarter of the year, consumer see many new products launched Consumer now have many choices for choosing a smartphone more than ever They are easy to find a smartphone with practical features and inexpensive price The switching cost is not so high to change from a brand to another In 2014, smartphone users tend to look for big screen design and practical function for checking health… Price of a premium smartphone is also going down and become less expensive than before (***) Besides getting along in the R&D race, main effort of company/brand is to encourage the consumer to buy their product and maintain their loyalty There comes the question that, standing before a many products and brands, what would make the consumer confident to make the dicision of buying or re-purchasing? One perspective is that with a strong platform/core value, reasonable price, good after-sale service, a brand can win the market Other perspective is that consumer tend to buy the brand that is believed to be prestigeous Some people say they base on their acquaintances’ suggestion and advice to make decision (***): Retrieved from: http://tuoitre.vn/tin/tuoi-tre-cuoi-tuan/cuoc-song-muonmau/20140927/xu-huong-di-dong-2014-thong-minh-hon-nua-re-hon-nua/650848.html 1.2 Research Problem All the top management executives have to find way to make the company profitable and hold on its competitive advantage They have to learn their consumer, generate more sale of their product/service and build their brand stronger over time Business administration starts with the organization’s vision and mission and develops with functional department operation Marketing department has a role to help build the core value of company, brand and convey that brand message to customers One way to achieve competitive advantage success of a company/brand is how they differentiate themselves in profitable way Consumer will consider purchasing and re-purchasing product/service based on their confidence, trust and the degree of loyalty in the company’s brand name In another word, customer has believe that the product or service under that brand name must perform well and satisfy their needs So companies, marketers and brand executives have done many research and learnt the concept of customer satisfaction, customer loyalty and customer’s perceived value Today, customers not only get influenced by company’s promotional programs but also interact with company and other customers Trust and perceived value drive customers to make recommendation and participate in the development of the company Brand loyalty and trust plays an important role for company success The more loyalty customers are generated, the higher value and more profitable that brand would build to company As in such a rapid-changing industry like smartphone one, facing the competition over time, studying of brand loyalty is necessary In conclusion, each company/brand should find out what to satisfy their customers and make them become loyal Company and brand executives are required to measure customers’ brand value perception This research is tailored in the smartphone product segment The research result contribute to the technology company the way to keep customers loyal to their brand Company will also know how they would positioning their brand inside customer’s mind Reliability Test Case Processing Summary N Valid Cases Excluded(a) Total % 217 100.0 0 217 100.0 a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Alpha N of Items 821 Item Statistics Mean Std Deviation N BID1 3.5576 96112 217 BID2 3.2903 98768 217 BID3 3.2028 1.08670 217 BID4 3.6452 1.15405 217 BID5 3.0922 1.08900 217 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted BID1 13.2304 11.576 582 795 BID2 13.4977 11.640 548 804 BID3 13.5853 10.299 692 762 BID4 13.1429 9.762 723 751 BID5 13.6959 11.240 531 810 Scale Statistics Mean 16.7880 Variance Std Deviation N of Items 16.307 4.03816 Reliability Test Case Processing Summary N Valid Cases Excluded(a) Total % 217 100.0 0 217 100.0 a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Alpha N of Items 915 Item Statistics Mean Std Deviation N CS1 3.8940 91430 217 CS2 3.9816 93275 217 CS3 4.1060 94419 217 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted CS1 8.0876 3.145 825 880 CS2 8.0000 2.963 879 834 CS3 7.8756 3.146 782 916 Scale Statistics Mean 11.9816 Variance Std Deviation N of Items 6.657 2.58013 Reliability Test Case Processing Summary N Valid Cases 217 100.0 0 217 100.0 Excluded(a) Total % a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Alpha N of Items 873 Item Statistics Mean Std Deviation N BT1 3.8664 85289 217 BT2 3.8295 84626 217 BT3 3.7005 92679 217 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted BT1 7.5300 2.704 741 835 BT2 7.5668 2.636 785 796 BT3 7.6959 2.472 747 832 Scale Statistics Mean 11.3963 Variance Std Deviation N of Items 5.509 2.34710 Reliability Test Case Processing Summary N Cases Valid Excluded(a) % 217 100.0 0 217 Total 100.0 a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Alpha N of Items 844 Item Statistics Mean Std Deviation N BL1 3.5576 1.09614 217 BL2 3.7281 1.11172 217 BL3 3.0507 1.21800 217 BL4 3.4885 1.13493 217 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted BL1 10.2673 8.252 751 772 BL2 10.0968 8.634 660 810 BL3 10.7742 8.166 651 816 BL4 10.3364 8.521 660 810 Scale Statistics Mean 13.8249 Variance Std Deviation N of Items 14.182 3.76592 Factor Analysis for independent factors KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Approx Chi-Square Bartlett's Test of Sphericity df Sig .854 1454.810 66 000 Communalities Initial Extraction BI1 1.000 573 BI2 1.000 734 BI3 1.000 820 BI4 1.000 726 BID1 1.000 549 BID2 1.000 508 BID3 1.000 681 BID4 1.000 712 BID5 1.000 527 CS1 1.000 861 CS2 1.000 893 CS3 1.000 783 Extraction Method: Principal Component Analysis Total Variance Explained Extraction Sums of Squared Loadings Initial Eigenvalues Component Total % of Variance Cumulative Total % % of Variance Rotation Sums of Squared Loadings Cumulative Total % % of Variance Cumulative % 5.352 44.597 44.597 5.352 44.597 44.597 2.948 24.571 24.571 1.861 15.506 60.103 1.861 15.506 60.103 2.721 22.677 47.247 1.155 9.622 69.725 1.155 9.622 69.725 2.697 22.478 69.725 771 6.427 76.151 571 4.755 80.907 546 4.552 85.459 471 3.925 89.383 388 3.237 92.620 293 2.439 95.059 10 259 2.157 97.215 11 203 1.694 98.910 12 131 1.090 100.000 Extraction Method: Principal Component Analysis Component Matrix(a) Component BI3 779 CS2 774 CS3 741 CS1 738 -.454 BI2 711 452 BI4 675 475 BID4 644 BI1 642 BID3 632 BID1 630 BID2 520 479 BID5 444 572 -.445 545 530 Extraction Method: Principal Component Analysis a components extracted Rotated Component Matrix(a) Component BID4 812 BID3 791 BID5 717 BID2 693 BID1 666 BI3 833 BI4 819 BI2 805 BI1 622 429 CS2 889 CS1 885 CS3 811 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations Component Transformation Matrix Component 559 595 578 826 -.341 -.448 -.069 728 -.682 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization Factor Analysis for independent factors after deleting BI1 KMO and Bartlett's Test 836 Kaiser-Meyer-Olkin Measure of Sampling Adequacy 1340.595 Approx Chi-Square Bartlett's Test of Sphericity 55 df 000 Sig Communalities Initial Extraction BI2 1.000 781 BI3 1.000 841 BI4 1.000 725 BID1 1.000 547 BID2 1.000 502 BID3 1.000 682 BID4 1.000 717 BID5 1.000 531 CS1 1.000 863 CS2 1.000 899 CS3 1.000 794 Extraction Method: Principal Component Analysis Total Variance Explained Initial Eigenvalues Component Total % of Variance Extraction Sums of Squared Loadings Cumulative Total % % of Variance Rotation Sums of Squared Loadings Cumulative Total % % of Variance Cumulative % 4.991 45.375 45.375 4.991 45.375 45.375 2.909 26.446 26.446 1.755 15.951 61.326 1.755 15.951 61.326 2.618 23.803 50.250 1.137 10.340 71.666 1.137 10.340 71.666 2.356 21.416 71.666 769 6.988 78.654 554 5.041 83.695 483 4.389 88.084 422 3.838 91.922 293 2.666 94.588 260 2.366 96.954 10 204 1.853 98.807 11 131 1.193 100.000 Extraction Method: Principal Component Analysis Component Matrix(a) Component CS2 766 -.402 BI3 762 437 CS3 730 -.427 CS1 727 -.404 BI2 704 BID4 671 513 BID3 661 494 BID1 653 BI4 653 BID2 551 432 BID5 473 555 -.414 499 501 Extraction Method: Principal Component Analysis a components extracted Rotated Component Matrix(a) Component BID4 816 BID3 791 BID5 720 BID2 685 BID1 661 CS2 899 CS1 893 CS3 825 BI3 838 BI2 834 BI4 815 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations Component Transformation Matrix Component 599 582 549 792 -.533 -.299 -.119 -.614 780 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization Factor Analysis for dependent factors KMO and Bartlett's Test 859 Kaiser-Meyer-Olkin Measure of Sampling Adequacy Approx Chi-Square Bartlett's Test of Sphericity 803.357 21 df 000 Sig Communalities Initial Extraction BT1 1.000 781 BT2 1.000 814 BT3 1.000 798 BL1 1.000 751 BL2 1.000 648 BL3 1.000 656 BL4 1.000 694 Extraction Method: Principal Component Analysis Total Variance Explained Initial Eigenvalues Component Total % of Variance Extraction Sums of Squared Loadings Cumulative Total % % of Variance Rotation Sums of Squared Loadings Cumulative Total % % of Variance Cumulative % 4.138 59.111 59.111 4.138 59.111 59.111 2.677 38.238 38.238 1.004 14.349 73.460 1.004 14.349 73.460 2.465 35.221 73.460 579 8.268 81.728 438 6.252 87.980 309 4.417 92.397 284 4.056 96.453 248 3.547 100.000 Extraction Method: Principal Component Analysis Component Matrix(a) Component BT2 812 BL1 809 BT3 776 -.443 BT1 766 -.440 BL2 763 BL3 737 BL4 713 430 Extraction Method: Principal Component Analysis a components extracted Rotated Component Matrix(a) Component BL4 815 BL1 803 BL3 768 BL2 732 BT3 853 BT1 845 BT2 842 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations Component Transformation Matrix Component 1 731 683 .683 -.731 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization Regression for dependent factor Brand Trust Variables Entered/Removed(b) Model Variables Entered Variables Removed Method CS, BID, BI(a) Enter a All requested variables entered b Dependent Variable: BT Model Summary(b) Model R R Square Adjusted R Square Std Error of the Estimate 620(a) 385 376 61792 a Predictors: (Constant), CS, BID, BI b Dependent Variable: BT ANOVA(b) Model Sum of Squares df Mean Square Regression 50.884 Residual 81.329 213 F Sig 16.961 44.422 000(a) 382 132.213 216 Total a Predictors: (Constant), CS, BID, BI b Dependent Variable: BT Coefficients(a) Unstandardized Coefficients Standardized Coefficients Model B Beta Sig Collinearity Statistics Tolerance VIF 1.201 233 5.163 000 BI 199 056 236 3.557 000 655 1.527 BID 141 059 145 2.384 018 777 1.288 CS 341 059 375 5.757 000 681 1.468 (Constant) Std Error t a Dependent Variable: BT Collinearity Diagnostics(a) Model Dimension Eigenvalue Condition Index Variance Proportions (Constant) BI BID CS 1 3.919 1.000 00 00 00 00 033 10.886 00 24 83 12 027 11.961 56 53 12 06 021 13.765 44 23 04 82 a Dependent Variable: BT Residuals Statistics(a) Minimum Maximum Mean Std Deviation 1.9099 4.5203 3.7988 48536 217 -1.88896 1.56422 00000 61362 217 Predicted Value Residual N Std Predicted Value -3.892 1.487 000 1.000 217 Std Residual -3.057 2.531 000 993 217 a Dependent Variable: BT Charts Regression for dependent factor Brand Loyalty Variables Entered/Removed(b) Model Variables Entered Variables Removed Method BT, BID, BI, CS(a) Enter a All requested variables entered b Dependent Variable: BL Model Summary(b) Model R R Square Adjusted R Square Std Error of the Estimate 747(a) 557 549 63230 a Predictors: (Constant), BT, BID, BI, CS b Dependent Variable: BL ANOVA(b) Model Sum of Squares df Mean Square Regression Residual Total 106.702 84.757 212 191.459 216 a Predictors: (Constant), BT, BID, BI, CS b Dependent Variable: BL F Sig 26.675 66.722 000(a) 400 Coefficients(a) Unstandardized Coefficients Standardized Coefficients Model B Beta Sig Collinearity Statistics Tolerance VIF -.588 252 -2.329 021 BI 144 059 142 2.450 015 618 1.618 BID 241 061 207 3.938 000 756 1.322 CS 360 065 328 5.519 000 589 1.697 BT 328 070 272 4.674 000 615 1.626 (Constant) Std Error t a Dependent Variable: BL Collinearity Diagnostics(a) Model Dimension Eigenvalue Condition Index Variance Proportions (Constant) BI BID CS BT 4.898 1.000 00 00 00 00 00 034 11.990 00 08 90 08 05 028 13.131 32 71 03 01 06 021 15.279 61 20 06 40 09 018 16.317 07 00 00 51 81 a Dependent Variable: BL Residuals Statistics(a) Minimum Maximum Mean Std Deviation 5330 4.6795 3.4562 70284 217 -1.63545 2.23065 00000 62641 217 Predicted Value Residual N Std Predicted Value -4.159 1.740 000 1.000 217 Std Residual -2.587 3.528 000 991 217 a Dependent Variable: BL Charts