Key factors affecting brand loyalty in hotel industry in ho chi minh city

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 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 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 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 TABLE OF CONTENTS CHAPTER : INTRODUCTION 1.1 Research background 1.2 Research Problems 1.3 Research Objectives 1.4 Research Scope 1.5 Research Structure CHAPTER : LITERATURE REVIEW 2.1 Consumer-based brand equity 2.2 Service quality: Physical quality and Staff behavior 2.3 Ideal self-congruence 2.4 Brand Identification 2.5 Consumer satisfaction and Brand loyalty 10 2.6 Research Model and Hypotheses 13 CHAPTER 3: METHODOLOGY 15 3.1 Research Process 15 3.2 Research Design 17 3.3 Measurement 17 3.4 Sample Selection 20 3.5 Data Collection 20 3.6 Data Analysis 21 CHAPTER 4: DATA ANALYSIS AND RESULTS 25 4.1 Descriptive Analysis 25 4.2 Measurement Assessment 26 4.2.1 Cronbach’s alpha 26 4.2.2 Exploratory factor analysis 32 4.3 Regression 38 4.3.1 Model 1: Multiple Regression Analysis with all independent variables and CS 38 4.3.2 Model 2: Multiple Regression Analysis with with consumer satisfaction variable as independent variable and brand loyalty as dependent variable 41 4.4 Hypothesis testing 43 4.5 Discussion of Findings 46 CHAPTER 5: CONCLUSION AND IMPLICATION 47 5.1 Conclusion 47 5.2 Managerial Implications 48 5.3 Limitations and Future Research 48 REFERENCES 50 APPENDICES 53 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 CHAPTER INTRODUCTION 1.1 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 32.5 million (2012) 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 1.2 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.g., 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 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 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., 1995) 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) 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 1.3 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 1.4 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 1.5 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 (menu, b ng h ớng d n…) ợc tr nh b y p m t B Ch t l n d ch Th i nh n i n Nhân vi n l ng nghe kh ch h ng Nhân vi n r t gi p ch Nhân vi n than thi n Nhân vi n gi p 5 5 5 5 kh ch h ng c n Nhân vi n s n s ng gi p kh ch h ng C Ideal Self-Congruence H nh nh kh ch h ng i n h nh c a kh ch s n gi ng h nh nh t i mu n nh n th y H nh nh kh ch s n t m nh ng x ng với h nh nh t i th hi n H nh nh kh ch s n t mu n ng i kh c nh n th y D h n di n th N u ph ng x ng với h nh nh t i t i n hi u ng ti n truy n th ng tr ch th ng hi u kh ch s n n y Anh/Ch s c m th y x u hổ Anh/Ch tin t ng v th ch th ng hi u kh ch s n Sử dụng d ch vụ kh ch s n th hi n c t nh c a anh ch h i l n c a h ch h n Anh/Ch ng n i “T i h i l ng với quy t 57 nh ch n kh ch s n n y” Anh/Ch ng n i: “S l a ch n c a t i nghỉ t i kh ch s n n y l s l a ch n kh n ngoan” Anh/Ch ng n i: “T i ngh t i ã trun th nh th Anh/Ch th l a ch n 5 5 5 5 ng n i: “T i ã c s tr i nghi m t v i nghỉ t i kh ch s n n y” ng ch n nghỉ t i kh ch s n n y” Anh/Ch n hi u ng ch n kh ch s n y u th ch l s u ti n so s nh với c c th ng hi u kh ch s n kh c Anh/Ch s ch n nghỉ t i kh ch s n n y n u c d p sau Anh/Ch s n s ng tr chi ph cao h n cho kh ch s n n y n u kh ch s n kh c c c ng ch t l ợng d ch vụ Anh/Ch s giới thi u kh ch s n cho nh ng t m ki m l i khuy n t Anh/Ch B T TI C - T n:…………………………… - Giới t nh:  Nam฀ - Tuổi:  18-25 ฀ - Thu nh p h ng th ng (VND)  5-10 tri u ฀ N ฀  26-30฀ 31-36฀  10-15 tri u ฀  36฀ 15-25 tri u ฀ 58 tr n 25 tri u ฀ - Kh ch s n ba - Anh/Ch n n m Anh/Ch ã nghỉ bao nhi u ã t ng nghỉ:………………………………………… m t i kh ch s n :………………………………………… Appendix 2: Codified Variables Code 59 No Items A Service Quality: Physical Quality PQ This brand has modern-looking equipment PQ1 This brand’s facilities are visually appealing PQ2 This brand gives you a visually attractive room PQ3 Materials associated with the service (such as menus, furniture) are visually appealing PQ4 B Service Quality: Staff Behavior SB Employees of the hotel listen to me SB01 Employees of the hotel are helpful SB02 Employees of the hotel are friendly SB03 Employee of the hotel give prompt service to the patrons SB04 Employee of the hotel are always willing to help patrons SB05 C Ideal Self-Congruence ISC The typical guest of this brand has an image similar to how I like to see myself ISC01 The image of this brand is consistent with how I like to see myself ISC02 The image of this brand is consistent with how I would like others to see me ISC03 D Brand Identification BI If a story in the media criticizes this brand, I would feel embarrassed BI01 You trust and like this hotel BI02 Consuming the services of the hotel highlights your personal characteristic BI03 E Consumer Satisfaction CS Would you agree to say “I am satisfied with my decision to visit this hotel”? CS01 60 Would you agree to say “My choice to stay at this hotel was the wise choice” CS02 Would you agree to say “I think I did the right thing when choose to stay in this hotel” CS03 Would you agree to say “I feel that my experience with this hotel has been enjoyable” CS04 F Brand Loyalty BL I usually use my favourite hotel/restaurant as my first choice compared to other hotel brands BL01 Next time I will stay in this brand BL02 I’m willing to pay high to stay in this hotel even the other hotel has the same quality BL03 I will recommend this brand to someone who seeks my advice BL04 Appendix Results of measurement assessment 61 Scale Scale Cronbach's Mean if Variance Corrected Squared Alpha if Item if Item Item-Total Multiple Item Deleted Deleted Correlation Correlation Deleted PQ01 11.2 4.6 794 632 829 PQ02 11.1 4.5 775 605 838 PQ03 11.1 5.6 699 493 870 PQ04 11.1 4.9 732 543 854 0.883` Physical quality SB01 15.1 4.8 728 547 850 SB02 15.2 4.6 730 542 849 SB03 15.1 5.1 638 426 870 SB04 15.3 4.5 735 562 848 SB05 15.1 4.7 732 551 848 0.879 Staff behavior ISC01 6.9 2.3 748 580 873 ISC02 6.8 1.9 844 713 789 ISC03 6.9 2.3 767 616 857 0.889 Ideal self-congruence BI01 7.4 1.4 768 599 825 BI02 6.7 1.8 793 629 819 BI03 6.9 1.5 756 577 837 0.877 Brand identification CS01 11.0 5.5 847 62 747 929 CS02 11.1 5.4 866 782 923 CS03 11.1 5.5 860 761 926 CS04 11.0 5.1 879 793 920 0.935 Consumer satisfaction BL01 11.4918 3.482 703 501 804 BL02 11.4699 3.646 686 474 811 BL03 11.4426 3.611 647 418 828 BL04 11.5464 3.535 723 528 795 0.850 Brand loyalty Table 4.2 Pattern Matrixa Factor SB1 802 SB5 782 SB4 751 SB3 749 SB2 666 PQ4 824 PQ1 817 PQ2 755 PQ3 613 ISC2 877 ISC1 741 63 ISC3 736 BI2 872 BI1 833 BI3 714 Extraction Method: Principal Axis Factoring Rotation Method: Promax with Kaiser Normalization a Rotation converged in iterations 64 Table 4.3 Total Variance Explained Rotation Sums of Squared Loadings Loadingsa Total 50.968 50.968 7.331 48.872 48.872 5.478 1.607 10.716 61.684 1.269 8.461 57.332 5.571 1.196 7.970 69.654 905 6.035 63.367 5.171 1.011 6.739 76.393 712 4.747 68.114 4.998 506 3.372 79.764 452 3.014 82.778 419 2.791 85.570 406 2.710 88.279 353 2.356 90.636 10 323 2.154 92.789 11 299 1.994 94.783 12 231 1.543 96.326 13 196 1.305 97.631 14 189 1.262 98.893 Factor dimension0 65 e ive % Varianc Total 7.645 e Total ive % Cumulat Varianc Initial Eigenvalues Cumulat Extraction Sums of Squared 15 166 1.107 100.000 Extraction Method: Principal Axis Factoring a When factors are correlated, sums of squared loadings cannot be added to obtain a total variance Table 4.4 Total Variance Explained 91.960 205 5.134 97.094 116 2.906 100.000 80.510 ative % 6.589 Cumul 264 ce % of 3.220 Cumul 85.371 ce 85.371 Varian 3.415 Total Varian Extraction Sums of Squared Loadings Total Initial Eigenvalues ative % Factor 80.510 Extraction Method: Principal Axis Factoring Table 4.5 Total Variance Explained Factor Extraction Sums of Squared 2.802 399 9.972 87.365 267 6.675 94.039 238 5.961 100.000 Extraction Method: Principal Axis Factoring 66 ive % 77.393 Variance 77.393 % of 3.096 % of Total Total Loadings ive % Cumulat Variance Initial Eigenvalues 70.053 70.053 Table 4.6 Correlations CS Pearson Correlation Sig (1-tailed) PQ SB ISC BI CS 1.000 712 700 638 654 PQ 712 1.000 557 665 556 SB 700 557 1.000 517 573 ISC 638 665 517 1.000 566 BI 654 556 573 566 1.000 CS 000 000 000 000 PQ 000 000 000 000 SB 000 000 000 000 ISC 000 000 000 000 BI 000 000 000 000 Table 4.7 Model Summaryb Mod el d1 R R Adjusted Std Error Square R Square 827 684 676 a Change Statistics R Square of the 41932 F 684 96.123 df1 df2 a Predictors: (Constant), BI, PQ, SB, ISC b Dependent Variable: CS Table 4.8 ANOVAb Model Sum of Squares Regression 67.606 Mean Df Square 16.902 67 F 96.123 Sig .000a 178 Sig F 000 Residual 31.298 178 Total 98.904 182 176 a Predictors: (Constant), BI, PQ, SB, ISC b Dependent Variable: CS Table 4.9 Coefficientsa Model Unstandardized Standardized Collinearity Coefficients Coefficients Statistics B (Constant) Std Error -.659 233 PQ 329 062 SB 458 ISC BI Beta t Sig Tolerance -2.824 005 322 5.285 000 479 2.086 076 332 5.991 000 580 1.725 138 061 135 2.246 026 494 2.026 254 069 208 3.674 000 553 1.808 a Dependent Variable: CS Table 4.10 Correlations BL Pearson Correlation Sig (1-tailed) N VIF CS BL 1.000 788 CS 788 1.000 BL 000 CS 000 BL 183 183 CS 183 183 68 Table 4.11 Model Summaryb Mod el d1 R R Adjusted 788 Square 621 R Square 619 a Std Error Change Statistics R Square F df1 df2 of.49117 the 621 296.88 181 Sig F 000 a Predictors: (Constant), CS b Dependent Variable: BL Table 4.12 ANOVAb Model Sum of Squares df Mean Square Regression 71.625 71.625 Residual 43.667 181 241 115.292 182 Total F 296.889 Sig .000a a Predictors: (Constant), CS b Dependent Variable: BL Table 4.13 Coefficientsa Model Unstandardized Standardized Collinearity Coefficients Coefficients Statistics B Std Error (Constant) 553 184 CS 851 049 Beta t 788 a Dependent Variable: BL 69 Sig 3.002 003 17.230 000 Tolerance 1.000 VIF 1.000 Table 4.14 Results of hypothesis tesing Tested results No Hypothesis H1 Physical quality has a positive effect on consumer satisfaction confirmed H2 Staff behavior has a positive effect on consumer satisfaction confirmed H3 Ideal self-congruence has a positive effect on consumer satisfaction confirmed H3 Brand identification has a positive effect on consumer satisfaction confirmed H5: There is a positive relationship between consumer satisfactionand Brand loyalty confirmed 70 Appendix Figure of regression results Figure Figure Figure 71 ... 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)... identify factors affecting brand loyalty in Hotel industry - To determine the impact of each factor on brand loyalty in Hotel industry 1.4 Research Scope This study focuses on hotel consumers in Ho Chi. .. 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 CHAPTER INTRODUCTION 1.1 Research