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 .5 2.2 Service quality: Physical quality and Staff behavior 2.3 Ideal self-congruence .8 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 4.2.2 Exploratory factor analysis 4.3Regression 4.3.1 Model 1: Multiple Regression Analysi 4.3.2 Model 2: Multiple Regression Analysi independent variable and brand loyalty as dependent variable 4.4Hypothesis testing 4.5Discussion of Findings CHAPTER 5: CONCLUSION AND IMPLICATION 5.1Conclusion 5.2Managerial Implications 5.3Limitations and Future Research REFERENCES APPENDICES 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 ch n kh ch s n n y” Anh/Ch t i kh ch s n n y l Anh/Ch ch n nghỉ t i kh ch s n n y” Anh/Ch t v i nghỉ t i kh ch s n n y” trun Anh/Ch l a ch n kh ch s n kh c Anh/Ch d p sau Anh/Ch s n n y n u kh ch s n kh c c d ch vụ Anh/Ch ki m l i khuy n t B.T - T n:…………………………… - Giới t nh: Nam - Tuổi: 18-25 - N 26-30 31-36 36 Thu nh p h ng th ng (VND) 5-10 tri u 10-15 tri u 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 This brand has modern-looking equipment This brand’s facilities are visually appealing This brand gives you a visually attractive room Materials associated with the service (such as menus, furniture) are visually appealing B Service Quality: Staff Behavior Employees of the hotel listen to me Employees of the hotel are helpful Employees of the hotel are friendly Employee of the hotel give prompt service to the patrons Employee of the hotel are always willing to help patrons C Ideal Self-Congruence The typical guest of this brand has an image similar to how I like to see myself The image of this brand is consistent with how I like to see myself The image of this brand is consistent with how I would like others to see D Brand Identification If a story in the media criticizes this brand, I would feel embarrassed You trust and like this hotel Consuming the services of the hotel highlights your personal characterist E Consumer Satisfaction Would you agree to say “I am satisfied with my decision to visit this hotel”? 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” Would you agree to say “I feel that my experience with this hotel has been enjoyable” F Brand Loyalty I usually use my favourite hotel/restaurant as my first choice compared to other hotel brands Next time I will stay in this brand I’m willing to pay high to stay in this hotel even the other hotel has the same quality I will recommend this brand to someone who seeks my advice Appendix Results of measurement assessment 61 PQ01 PQ02 PQ03 PQ04 SB01 SB02 SB03 SB04 SB05 ISC01 ISC02 ISC03 BI01 BI02 BI03 CS01 62 CS02 CS03 CS04 BL01 BL02 BL03 BL04 Table 4.2 Pattern Matrix a Factor SB1 SB5 SB4 SB3 SB2 PQ4 PQ1 PQ2 PQ3 ISC2 ISC1 63 ISC3 BI2 BI1 BI3 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 a Factor Total Loadings 5.478 5.571 5.171 4.998 dimension0 10 11 12 13 14 65 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 77.393 87.365 94.039 100.00 Extraction Method: Principal Axis Factoring 66 Total ive % Extraction Sums of Squared Table 4.6 Correlations Pearson Correlation Sig (1-tailed) Mod R el a Predictors: (Constant), BI, PQ, SB, ISC b Dependent Variable: CS Table 4.8 ANOVA 827 Square a b Model Regression 67 Residual Total a Predictors: (Constant), BI, PQ, SB, ISC b Dependent Variable: CS Model (Constant) PQ SB ISC BI a Dependent Variable: CS Table 4.10 Correlations Pearson Correlation Sig (1-tailed) N 68 Table 4.11 Model Summary Mod R 788 a a Predictors: (Constant), CS b Dependent Variable: BL Model Regression Residual Total a Predictors: (Constant), CS b Dependent Variable: BL Model (Constant) CS a Dependent Variable: BL 69 b R 62 Table 4.14 Results of hypothesis tesing No Hypothesis H1 Physical quality has a positive effect H2 Staff behavior has a positive effect on H3 Ideal self-congruence has a positive H3 Brand identification has a positive ef H5: There is a positive relationship between consumer satisfactiona Brand loyalty 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