A study on customer behaviors in chain coffee shops in vietnam

VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY -*** NGUYEN HUU CUONG A STUDY ON CUSTOMER BEHAVIORS IN CHAIN COFFEE SHOPS IN VIETNAM MASTER'S THESIS Hanoi, 2020 VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY -*** NGUYEN HUU CUONG A STUDY ON CUSTOMER BEHAVIORS IN CHAIN COFFEE SHOPS IN VIETNAM MAJOR: BUSINESS ADMINISTRATION CODE: 8340101.01 RESEARCH SUPERVISORS: Prof Dr PEIJUN GUO Associate Prof Dr NGUYEN VIET KHOI Ha Noi, 2020 ABSTRACT This research aims to investigate and understand the relationship between price, customer-based brand equity, customer satisfaction, and brand loyalty in the Vietnam’s chain coffee shops The chain coffee shops are earning big money and growing fast in Vietnam so that it is necessary to appreciate the importance of customer behaviors to manage this type of business To that, we set brand loyalty and customer satisfaction as dependent variables and set price, congruence, and quality as independent variables then describe the difference of those relationships in two empirical cases in Hanoi and Ho Chi Minh City We use the quantitative approach on a sample of 427 respondents in Highlands Coffee and The Coffee House, which are two major Vietnamese coffee shop brands We utilize the structural equation modeling (SEM) method by SPSS software Descriptive analyses and path analyses of the multivariate regression model support the validity of the proposed model The findings in this study are that significant positive effects from price, quality, and congruence on customer satisfaction and satisfaction on brand loyalty in Hanoi and Ho Chi Minh City chain coffee shops The analyses also indicate that among three antecedents of customer satisfaction, quality has the most substantial influence, follow by congruence and price Moreover, the analyses tell that in Ho Chi Minh City, customer satisfaction has much higher impact on brand loyalty than in Hanoi Several implications might be withdrawn to coffee shop brands as a consequence of these results Keywords: Price; Food and Service Quality; Customer Satisfaction; Brand Loyalty; Martketing; Branding; Chain Coffee Shop; Vietnam ACKNOWLEDGMENT After two years of studying and researching at Vietnam Japan University, it is my privilege to be able to write this dissertation From the first interview session for university entrance, I have been keeping the research orientation on the subject, which I am interested in, customer behavior in the coffee shops industry The study included not only academic but also practical aspects with implications for understanding the customer The subjects and knowledge I gained through coursework sessions also play an essential role in supporting my research activities I hope that my research can contribute to researches on the customer behavior in the coffee shop industry First of all, I would like express my gratitude to my advisors, Professor Peijun Guo and Professor Nguyen Viet Khoi, for their guidance and comments Especially the time when I was in Yokohama, Japan, my advisors gave me valuable advice about how I should proceed with the researching process Without their prompt and patient instructions, I cannot finish the thesis I want to say thanks to all of my friends, respondents of the questionnaires for their support and encouragement Finally, thanks to my family for emotional and financial support that motivate me for making effort to complete the research Remarkably, thanks to my mother, despite her leg injury recovering period, she has always encouraged and supported me so that I can focus on the study TABLE OF CONTENTS ABSTRACT ACKNOWLEDGMENT LIST OF ABBREVIATIONS LIST OF TABLES LIST OF FIGURES CHAPTER 1: INTRODUCTION 1.1 Background of the research 1.2 Problem statement 1.3 Research objectives 1.4 Scope of the research .6 1.5 Significance of the research 1.6 Thesis structure CHAPTER 2: LITERATURE REVIEW 2.1 Brand equity .8 2.2 Customer satisfaction 10 2.3 Brand loyalty 10 2.4 Price .11 2.5 Relationship between brand equity, price, customer satisfaction and brand loyalty 12 2.5.1 Brand equity and customer satisfaction 12 2.5.2 Price and customer satisfaction .14 2.5.3 Customer satisfaction and brand loyalty 15 2.6 Research model 17 CHAPTER 3: METHODOLOGY 19 3.1 Research design 19 3.2 Data collection instruments 20 3.3 Data analysis 22 CHAPTER 4: FINDINGS 23 4.1 General results .23 4.1.1 Demographic information 23 4.1.2 Demographic customer behavior .23 4.2 Descriptive analysis .25 4.3 Analytical results 27 4.3.1 Statistical results in Hanoi .27 4.3.2 Statistical results in Ho Chi Minh City 31 CHAPTER 5: DISCUSSION AND CONCLUSION 38 5.1 Discussion .38 5.2 Practical implications 39 5.3 Limitations and future research recommendations 41 REFERENCES 43 APPENDIX 50 LIST OF ABBREVIATIONS ASV Average Shared Variance” AVE “Average Variance Extracted CBBE Customer-Based Brand Equity CFA Confirmatory Factor Analysis” CFI “Comparative Fit Index CR Composite Reliability DF Degrees of Freedom EFA Exploratory Factor Analysis GFI Goodness of Fit Index HCM Ho Chi Minh KMO Kaiser-Meyer-Olkin MSV Maximum Shared Variance RMSEA Root Mean Square Error of Approximation” SEM “Strutural Equation Modeling TCH The Coffee House TLI Tucker-Lewis Index LIST OF TABLES Table 1.1 Leading coffee shops brand in Vietnam in 2019 Table 3.1 Questionnaire scale and construct 21 Table 4.1 Profile of respondents………………………………………………… 23 Table 4.2 Demographic customer behavior 24 Table 4.3 Descriptive analysis 26 Table 4.4 Reliability test in Hanoi 27 Table 4.5 KMO and Bartlett's Test in Hanoi 28 Table 4.6 Pattern Matrix in Hanoi 28 Table 4.7 Results of GOF tests of CFA factor analysis in Hanoi 29 Table 4.8 Convergent and discriminant validity in Hanoi 30 Table 4.9 Results of SEM analysis in Hanoi 31 Table 4.10 Reliability test in HCM City 31 Table 4.11 Pattern Matrix in HCM City 32 Table 4.12 KMO and Bartlett's Test in HCM City 33 Table 4.13 Results of GOF tests of CFA factor analysis in HCM City 33 Table 4.14 Convergent and discriminant validity in HCM City .34 Table 4.15 Results of SEM analysis in HCM City 36 LIST OF FIGURES Figure 1.1 Total domestic coffee consumption in Vietnam from 2010 to 2018 .2 Figure 2.1 Research model………………………………………………… …….17 Figure 4.1 CFA path analysis in Hanoi 29 Figure 4.2 SEM path analysis in Hanoi 30 Figure 4.3 CFA path analysis in HCM City 34 Figure 4.4 SEM path analysis in HCM City 35 CHAPTER 1: INTRODUCTION 1.1 Background of the research As a developing country, Vietnam has a massive capacity of agricultural land accounts for 39% in the total area with the contribution to GDP at 15% in 2017 (Statista, 2020) The report by Statista also indicated that the primary labor force of Vietnam is in the agriculture sector, with 40% of employment amounted to approximately 20 million people in 2018 In this sector, the coffee industry is vital for both domestic and foreign markets as Vietnam has been maintaining the position as the world’s second-largest coffee exporter in consecutive years In the early twentieth century, coffee was first introduced into Vietnam in the time of colonization by France, coffee production then increased rapidly and became one of the most crucial agricultural products The first instant coffee plant with a manufacturing capacity of 80 tons per year, was established in Dong Nai Province, in 1969 The two main kinds of coffee beans in Vietnam are Robusta and Arabica, containing 1.6 to 2.7% caffeine and to 1.5% caffeine, respectively, making the taste of coffee here bitter and healthier than the coffee drinks in the world According to Tran (2019), in the marketing year of 2018/2019, domestic consumption of coffee is at million bags, and the experts forecast this number will drastically increase due to the fierce competition of both international and local coffee brands in Vietnam The domestic consumption of coffee casts for approximately 10% of total coffee production, much lower than the exported amount of coffee, which means the local coffee shops still can grow From Table 1.1, we know the upward trend in consuming coffee of Vietnamese consumers from 2010 to 2018, and this upward trend signifies the continuing increase in domestic coffee consumption in the future 3,000 2,500 2,000 1,500 1,000 500 2010 2011 2012 2013 2014 2015 2016 2017 2018 Figure 1.1 Total domestic coffee consumption in Vietnam from 2010 to 2018 (Unit: 1000 sixty-kg bags) (Source: statista.com) There are many newly-built coffee chains in recent years in Vietnam According to Le (2018), coffee chains have competitive advantages in quickly detecting target customers and creating a standardized management system Also, coffee chains have more competency in attracting consumers when they become professional brands Additionally, it is difficult to have a precise number of coffee shops in Vietnam for the fact that the independent coffee shops locate sparsely and have a short life cycle However, the coffee chains have been the trend for business in coffee shops in Vietnam, along with the evolution of e-commerce and delivery service There are leading brands in the coffee chain market in Vietnam that prevails in the number of stores and revenue, namely Highland Coffee, Starbucks, The Coffee House, and Trung Nguyen Coffee American giant coffee shops brand Starbucks, which entered Vietnam in 2013, now runs 60 shops, mostly in Hanoi and HCM City However, Starbucks offers a higher price than local chains like The Coffee House or Highland though they are in the same premium segment Domestic coffee chains in Vietnam manage a wide variety of products, from drinks to foods as well as secure Wi-Fi connection and tranquil space, especially sensitive in market trends and taste of the customer Nowadays, fast-pace economic development in Vietnam encourages competition in various business and service sectors Many big firms try to invest substantial financial sources to gain market share and revenue despite losing profit, especially in creating chain businesses Other than the growth of convenient store Aaker (1991) offered the measurement of brand equity conforming to i i i i i i i i i i different elements, aspects, and dimensions The author relates the brand equity to i i i i i i i i i i i i multiple issues, including brand association, brand awareness, perceived quality, i i i i i i i i brand loyalty, and other proprietary assets of brands From this part, CBBE is the i i i i i i i i i i i i i type of brand equity that the author wants to focus on and research in this study i i i i i i i i i i i i i i i i i i i i i i i i awareness, perceived quality, brand association, and brand loyalty, are fundamental i i i i i i i i i i As explained by Washburn and Plank (2002), four concepts, including brand i i i i i dimensions to measure CBBE The authors also noted that the perspective of other i i i i i i i i i i i i i proprietary assets of brands is irrelevant in consumer-based brand equity i i i i i i i i i i measurement Besides, Yoo and Donthu (2001) reported that consumer-based brand i i i i i i i i i i equity at the individual level of customer breaks into behavioral and cognitive i i i i i i i i i i i perspectives; therefore, conducting consumer surveys is a valid measurement i i i i i i i i i i i i i i Additionally, consumer-based brand equity is the synthesis of physical i i i i i i i i i i quality, staff behavior, brand identification, lifestyle-congruence, and ideal selfi i i i i i i i congruence (Nam et al., 2011) Consequently, this paper explores the impacts of i i i i i i i i i i i i those characteristics of consumer-based brand equity on brand loyalty, in i i i i i i i i i i consideration of customer satisfaction as a medium Ko and Chiu (2006) viewed the i i i i i i i i i i i i coffee shop industry as a part of the service industry, notably the food and service i i i i i i i i i i i i i i i industry, consequently, reflecting and reutilizing the items from the measurement of i i i i i i i i i i i i CBBE in the study of Nam et al (2011) is viable Furthermore, O’Louhglin and i i i i i i i i i i i i i i Szmigin (2006) portrayed that developing and designing the relationship of brand i i i i i i i i i i association and five dimensions of consumer-based brand equity helped to meet i i i i i i i i functional needs as well as the symbolic needs of customers i i i i i i i i i i i i i i Besides, for the resemblance in the research matter as an area of the service i i i i i i i i i i i i i industry, this study applies consumer-based brand equity by incorporating four i i i i i i i i i i dimensions illustrated by Nam et al (2011) The authors formulated a model with a i i i i i i i i i i i i i i i measurement of four dimensions of consumer-based brand equity with aiming to i i i i i i i i i i i research the case of hotels and restaurant industry in the UK Thus, for similarity to i i i i i i i i i i i i i i i the case of hotels and restaurants industry, this paper employs the physical food and i i i i i i i i i i i i i i service quality dimensions as well as the symbolic dimensions, including lifestylei i i i i i i i i i congruence, and ideal self-congruence, to measure consumer-based brand equity in i i i i i the coffee shops industry i i i i i i i i 2.2 Customer satisfaction Many types of research, especially in the marketing field, recognized i i i i i i i i i i customer satisfaction as a critical factor for the long-term success of a brand (Pappu i i i i i i i i i i i i i and Quester, 2006) Accordingly, a large number of scholars employed customer i i i i i i i i i i i i satisfaction as a dominant factor to explore the post-purchase behavior of the i i i i i i i i i i i i customer, for example, attitudinal loyalty and behavioral loyalty Nemati et al i i i i i i i i i i i (2011) described customer satisfaction as the level a product or service serves the i i i i i i customer and satisfies his or her expectations i i i i i i i i i i i i i i Customer satisfaction has both cognitive and affective aspects The cognitive i i i i i i i i i i aspects related to thoughts and judgments about the product or service and the brand i i i i i i i i i i i i i while the affective perspectives encompass a subjective feeling that the overall i i i i i i i i i i experience in dealing with the firm is positive (Tu et al., 2012) Baig and Khan i i i i i i i i i i i i i i i i i (2010) believed that retaining customers is certainly worthwhile financially in i i i i i i i i i i correlation to the cost of gaining new customers, which is far more expensive i i i i i i i i i i i i i Consequently, customer satisfaction is a vital factor when doing business in such i i i i i i i i i i i i profoundly competing markets, mainly the hotel and restaurant industry or coffee i i i i i i i i i i i shops industry i Among two forms of customer satisfaction, including cumulative satisfaction and transaction-specific satisfaction, researchers concentrate more to study related to cumulative types, which refer to the extent of post-purchase satisfaction of the customer Tu et al (2012) evaluated the overall satisfaction of the latest consumptions of products and services along with the rendezvous with the brand or their employees 2.3 Brand loyalty Previous studies have defined and developed the concept of brand loyalty as i i i i i i i i i i i i an important factor in branding and marketing Brand loyalty is the repeated i i i i i i i i i i i i purchasing products and services, as well as support the brands resulting from the i i i i i i i i i i i i i positive attitude towards the brand from customers (Hoyer and McInnis, 2008) i i i i i i i i i i According to Jacoby and Chestnut (1978), brand loyalty refers to the perspective i i i i i i i i i i i i i which is biased behavioral response conveying over a period made by decisions of i i i i i i i i i i i i consumers concerning the purchase of a particular brand or multiple brands, consider i i i i i i i i i i i as a process of psychological thinking of customers The authors also highlighted the i i i i i i i i i i i i i i importance of brand loyalty with the role of simplifying the purchasing decision, for i i i i i i i i 10 i i i i i i example, that with existed positive experiences with the brand, the customer tends to i i i i i i i i i i i i i keep buying as a signal of loyalty Therefore, through brand loyalty concentration, a i i i i i i i i i i i i firm or a brand can build up their regular customer or customer base, which is morale i i i i i i i i i i for expanding business scale and growth i i i i i i i i i i i i i i i i Because brand loyalty is a psychological concept defined by many scholars, it i i i i i i i i i i i i is difficult to measure it objectively One method, including price sensitivity and i i i i i i i i i i i i purchasing behaviors, is widespread and mentioned in various studies Moreover, i i i i i i i i i i brand loyalty is informatively measured by inspecting customers to assess their i i i i i i i i i i commitment to the brand based on critical items such as the attitude toward the i i i i i i i i i i i i i product and their consistent opinions overtime (Mohammad, 2012) Previous studies i i i i i i i i i i i i i i i i i i i positive feeling or opinion on the brand itself or the products provided by the brand i i i i i i i i i i i i i i (Gremler and Brown, 1996) There are multiple ways to measure attitudinal loyalty, i i i i i i i i i i i i i suggest two perspectives to view brand loyalty Attitudinal loyalty attributes to the i i i i i for example: “intention of word of mouth” (Boulding et al., 1993) or “willingness to i i i i i i i i i i i i i i pay a premium price” (Narayandas, 1996) On the other hand, behavioral loyalty i i i i i i i i i i i i regards as the purchasing behavior or repeated the frequency of purchase products of i i i i i i i i i i i i the same brand over time (Chaudhuri & Holbrook, 2001) Bandyopadhyay and i i i i i i i i i i i i Martell (2007) considered the cause and effect relationship between attitudinal and i i i i i i i i i i i behavioral loyalty; for instance, if a customer holds a pleasant experience with the i i i i i i i i i i i i i brand, consequently, he or she favors becoming a repeated consumer i i i i i i i i i Choi et al (2011) developed a set of brand loyalty items that were useful for further researches This measurement of brand loyalty helped in mitigating the risk of other factors affecting behavioral brand loyalty, such as convenience or habit Besides, Nam et al (2011) also described a set of items to assess brand loyalty This research then employs items from previous papers to study the correlation between brand loyalty and other variables 2.4 Price A price refers to the amount of payment or compensation given by one party to another in exchange for one unit of goods or services (Schindler, 2012) Price is also an element of marketing mix together with product, place, and promotion Besides, from the business viewpoint, marketing mix is a critical tool for firm and organization to achieve marketing target as well as increase the sale and financial 11 performance (Bay, Petrizzi and Gill, 2008) In the service industry, the price has the intangible nature of service, then in case other information is missing, price becomes a pivotal quality degree (Olander, 1970; Zeithaml, 1981) Moreover, it is imperative that the firm also confronts with setting price competitively, for example, a customer considers price as a basis to choose the brand in situation among several competing service organizations (Yelkur, 2000) According to Olson (1977), the objective or actual price has been defined distinctively from perceived price, and whether the price is low or expensive is understood by the actual price by the customer Moreover, Yoo et al (2000) represented that price is subjectively perceived by the consumer; it is possible to measure it by collecting the opinion of the consumer Using items of Smith and Park (1992), the authors also developed eight items related to price measurement; for instance, “the price of this brand is high.” This paper, therefore, will adapt and employ this method of price assessment as a part of the scale for measuring the research variable 2.5 Relationship between brand equity, price, customer satisfaction and brand loyalty 2.5.1 Brand equity and customer satisfaction Service quality is a fundamental part of marketing and helps in sustaining and i i i i i i i i i i i i i succeed in business (Fitzsimmons et al., 2001) Previous studies already researched i i i i i i i i i i i service quality, and this paper utilizes two perspectives of service quality comprising i i i i i i i i i i i staff behavior and physical quality to investigate in the field of coffee shops industry i i i i i i i i i i i i i i i The staff behavior reflects the competence, friendliness, and helpfulness of staff i i i i i i i i i i i members in the service industry, while the physical quality dimension refers to the i i i i i i i i i i i i i physical facilities of the brand (Bloemer and Kaspe, 1995) i i i i i i i i The physical facilities accommodate firms to give the customer a pleasant i i i i i i i i i i i experience, which may incur not only repeated purchasing behavior but also wordi i i i i i i i i i i of-mouth effect Consequently, a good and pleasant experience also provokes i i i i i i i i i i customers in terms of strongly affecting their level of satisfaction and loyalty i i i i i i i i i i i i (Bloemer and Kaspe, 1995; Ryu and Jang, 2008) i i i i i i i On the other hand, the staff behavior has an impact on customer satisfaction i i i i i i i i i i i i because during service providing process customer has a particular experience, it can i i i i i i 12 i i i i i i i be positive or negative The staff and employees of an organization play an important i i i i i i i i i i i i i i role in creating customer satisfaction as they have ultimate responsibility in i i i i i i i i i i contacting and providing service to customers, meeting their expectations (Zeithaml i i i i i i i i i et al., 1986) Past researches have described that low-skilled staff might induce the i i i i i i i i i i i i i i i negative emotional experience of the customer because those staff might be reluctant i i i i i i i i i i i i to cope with that emotion of the customer properly while they are the representative i i i i i i i i i i i i i i of the firm (Bloemer & Kaspe 1995; Lemmink and Mattsson, 2002) Additionally, i i i i i i i i i i i i Han et al (2015) believed that the behavior of employees has a significant effect on i i i i i i i i i i i i i i overall customer satisfaction Besides, Bhattacharya and Sen (2003) researched the i i i i i i i i i i i explicit service attribute and reported that the politeness and attentiveness of staff i i i i i i i i i i i i also have an impact on customer satisfaction i i i i i i Also, there are numerous scholars identified and employed the relationship i i i i i i i i i i among customer satisfaction, physical quality and staff behavior in different sectors i i i i i i i i i i of the service industry for their studies, namely Parasuraman et al (1988); Bergami i i i i i i i i i i i i i i & Bago i (2000); Brady & Cronin (2001); Ryu & Jang (2008) i i i i i i i i i i i The lifestyle of people refers to how they purchase products or choose a brand, for example, luxury goods or services Brands and brand settings are expressions of lifestyles (Solomon, 2002) Peter and Olson (2008) defined lifestyles as the specific manner that people conduct their lives Also, Solomon et al (2006) described lifestyle as a way to differentiate people belong to a group or not According to Casswell and Maxwell (2005), interpretation desired experiences and lifestyles when the customer uses a product or service facilities to build a brand Similarly, the authors believed that the suitability of the brand and personal lifestyle of consumers stimulates the right attitude of the customer with the brand Lifestyle-congruence describes the degree to which brand consumption supports consumers’ unique pattern of living as expressed by their activities, interests, and opinions (Nam et al., 2011) Sarki et al (2012) portrayed purchasing behavior as relates to emotion more i i i i i i i i i i i i than rationale This research also mentioned that encouraging customers to buy i i i i i i i i i i i products or services of a brand is influenced by many external factors such as culture i i i i i i i i i i i i i i i and lifestyle i Solomon (2002) also identified the mechanism for the marketing of lifestyle, i i i i i i i i i i i which aims to gain customer satisfaction is harmonizing the specific lifestyle of the i i i i i i i 13 i i i i i i customer to brand strategy Researches about the effect of lifestyle on the level of i i i i i i i i i i i i i i satisfaction of customer towards a brand confirm that there is a positive relationship i i i i i i i i i i i i i between customer satisfaction and lifestyle (Kyungnam, 2011; Awan and Rehman, i i i i i i i i i i 2014) A further study conducted by Nam et al (2011) also confirmed that the i i i i i i i i i i i i i congruence between the lifestyle of consumer and a brand strongly reinforce i i i i i i i i i i i i customer satisfaction i The construct of congruence relates the personality of brands to the selfconcept of consumers (Nienstedt et al., 2012) According to Baumeister (1999), selfi i i i concept refers to the sum of thoughts and feelings of a person about himself or i i i i i i i i i i i i i i herself, including the comprehension of that person about who and what the self is i i i i i i i i i i i i i i i Carl Rogers (1959) also identified three perspectives of self-concept, including selfi i i i i i i i i i image, self-esteem, and ideal self In these three concepts, this paper employs the use i i i i i i i i i i i i i i of ideal-self, which means what individuals wish they were becoming i i i i i i i i i Sirgy et al (2000) developed self-congruence theory and defined selfi i i i i i i i i congruence as the extent to which actual and ideal self-congruence matches with the i i i i i i i i i i i i i brand image; this level then partially influence customer behavior Ambler et al i i i i i i i i i i i i (2002) also share the same opinion on self-congruence; the individual owns or buys i i i i i i i i i i i i i brands to enhance their self-esteem i i i i He and Mukherjee (2007) considered self-congruity as a crucial factor in i i i i i i i i i i i researching various aspects of customer behavior, and it is of great importance in i i i i i i i i i i i i i being antecedent to impact customer satisfaction Previous studies by Andreassen i i i i i i i i i i i (1994), Baker (1987), and Grewal & Mangleburg (2000) also supported that there is i i i i i i i i i i i i i a positive correlation between customer satisfaction and ideal self–congruence in the i i i i i i i i i i service industry In the study about the effect of brand self-congruence on the i i i i i i i i i i i i i i behavior of the customer, brand self-congruence has more impact on satisfaction than i i i i attitude and preference i i i i i i i i i i This study then combines the physical quality, staff behavior, lifestyle i i i i i i i i i i i congruence, and ideal-self congruence dimensions of CBBE into quality and i i i i i i i i i i congruence dimensions to explore their impacts on customer satisfaction i i i i i i i i 2.5.2 Price and customer satisfaction According to Peng and Wang (2006), the customer has to pay the price as the financial cost they purchase products or services, then the customers consider price 14 as a crucial thing to decide between buying a product or service There is a close relationship between the fairness of price and customer satisfaction (Al-Msallam, 2015) The authors found that price fairness is one of the critical determinants for customer satisfaction because the customers often switch to any other brand which offers a reasonable price This idea means that as long as a brand offers a fair price, the customer will stick to them for a longer-term Most of the customers view price with the service quality; when there is a match, the result is customer satisfaction and vice versa (Oliver, 1997) This idea means the customers have a tendency to pay for the product or service if they feel the deal given by the service provider is reasonable There are two perspectives in calculating the price perception (Cheng et al., 2008) The first one is the reasonableness of price, which refers the customer’s perception of the differentiation between one brand and the others The other aspect is how the customers consider the relative position of a brand; then, they perceive the fairness of price concerning the value of money Ordinarily, the products or services with low quality are often cost lower than those with high quality (Chitty et al., 2007) Many studies proclaimed that there is a positive correlation between price perception and customer satisfaction (Oliver, 1997; Cheng et al., 2008) The leading cause of customers changes service providers stays in price problems; for example, the lack of fairness or reliability in pricing policies of the firms (Peng and Wang, 2006) Consequently, a brand, in order to gain customer satisfaction, should consider the fairness of pricing under maintaining and improving the service quality 2.5.3 Customer satisfaction and brand loyalty According to Oliver (1999), at the affective stage of customer satisfaction, i i i i i i i i i i consumers would nurture a positive attitude towards the service-provider or the i i i i i i i i i i i i brand patronage resulting from satisfactory repetitive purchasing action over time i i i i i i i i i This brand experience then makes customer satisfaction a critical factor in embracing i i i i i i i i i i i i i brand loyalty Numerous studies have focused on the exploration of this loyaltyi i i i i i i i i i i satisfaction relationship (e.g., Szymanski and Henard, 2001; Choi et al., 2011; Song i i i i i i i i i i i i et al., 2012) and that customer satisfaction is the predecessor of brand loyalty i i i i i i i i i (Kapferer, 2008; Martisiute et al., 2010; Nam et al., 2011) i i i i i i i 15 i i i i i i i i Besides, Bennett and Rundle-Thiele (2004) believed that if customers are i i i i i i i i i i satisfied with the product and service of a brand, they have high tendencies to keep i i i i i i i i i i i i i i using the brand, encourage others to use this brand, and they are less likely to switch i i i i i i i i i i i i i i i i i to other brands Moreover, the relationship between satisfaction and loyalty is i i i i i i i i i i i significant in both the short-run and long-run; they are like two unique concepts or i i i i i i i i i i i i i i steps relating to the attitude of customers towards brand or brand set (Mittal and i i i i i i i i i i i i i i Kamakura, 2001) In other words, brand loyalty is the final stage that resulted from i i i i i i i i i i i i i i the responses of the customer to the offerings of the brand, which follow from the i i i i i i i i i i i i i i i initial satisfaction stage i i Brakus et al (2009) conducted a study in the US market to investigate the i i i i i i i i i i i i i relationship between brand loyalty and customer satisfaction and found out that i i i i i i i i i i satisfaction with brand experience is an influential mediator affecting brand loyalty i i i i i i i i i i i i i Researches in many sectors and the empirical studies demonstrated a positive i i i i i i i i i i i correlation between loyalty and satisfaction: Back and Parks (2003) in the service i i i i i i i i i i i i industry; Rust and Zahorik (1993) in retail banks and hotel industry; McDougall and i i i i i i i i i i i i i Levesque (1994) in multiple sectors i i i i Nam et al (2011) presented a model in which customer satisfaction played the i i i i i i i i i i i i role of mediator of brand loyalty and consumer-based brand equity The authors i i i i i i i i i i i i i conducted empirical research in the hotel and restaurant industry in the UK, and the i i i i i i i i i i i i i i result is unsurprised, there is a positive effect of brand equity on brand loyalty i i i i i i i i i i i i i i through customer satisfaction Later in 2012, Tu et al also investigated this i i i i i i i i i i i correlation of loyalty and satisfaction in Starbucks coffee shops in Taiwan, which i i i i i i i i i i i i supported similar results This case means, as a part of the service industry or food i i i i i i i i i i i i i i i i and beverage sector, coffee shops are a potential context to conduct a study to explore i i i i i i i i i i i i i i i this relationship of brand loyalty and customer satisfaction i i i i i i i Suh and Yi (2006) highly valued the strong effect of customer service on brand loyalty with the direct connection rather than typical advertisements or brand image This view implies that focusing on customer satisfaction helps in strengthen brand loyalty, especially for the product and service of the brand The coffee shops offer products in a service-based manner; therefore, the essence of customer satisfaction must be higher in both tangible and intangible aspects (Morrison and Crane, 2007) 16 On the other hand, studies by Zeithaml et al (1996); Bloemer et al (1999); Cronin et al., (2001); Johnson et al (2001) also supported that satisfied customers exposed additional loyal behavior In the situation in which the service has a vital role along with brand experience, enhancing brand loyalty needs more than just having tasty product offerings 2.6 Research model The above literature reviews are about CBBE, brand loyalty, price and customer satisfaction, and their relationships From these conceptual constructs, this paper foresees the influences of price and brand-equity on customer satisfaction and customer satisfaction on brand loyalty Although different from the conceptual model from Nam et al (2011), we not test the role of the brand identification dimension in the model because the coffee chains market in Vietnam is still developing with little awareness from the customer about brand identification However, it is of the great potential that there is a positive effect of the price on customer satisfaction, which is a new dimension to the conceptual model Moreover, from the phenomenon about location, the hypotheses are developed and tested as two separate empirical cases in Hanoi and HCM City Therefore, the author developed the research model with four hypotheses as follows: Price H1 H2 Customer Satisfaction Quality H4 H3 Congruence Figure 2.1: Research model 17 Brand Loyalty  Hypothesis 1: Price has a positive effect on customer satisfaction in chain i i coffee shops in Vietnam i i i i i i i i i i i i i i  Hypothesis 2: Quality has a positive effect on customer satisfaction in chain i i i i i i i i i i i i coffee shops in Vietnam i i i  Hypothesis 3: Congruence has a positive effect on customer satisfaction in i i i chain coffee shops in Vietnam i i i i i i i i i i i i i  Hypothesis 4: Customer satisfaction has a positive effect on brand loyalty in i i i i chain coffee shops in Vietnam i i i i 18 i i i i i i i i CHAPTER 3: METHODOLOGY 3.1 Research design This study aims to identify and investigate the relationship between price, i i i i i i i i i i congruence, quality, customer satisfaction, and brand loyalty in the coffee shops i i i i i i i i i i i i industry in Vietnam The researcher adopts deductive reasoning with a theory about i i i i i i i i i i i i the concerned topic instead concentrates on formulating testable hypotheses by i i i i i i i i i i collecting observations and gathering data that concerns the confirmation of the i i i i i i i i i i i original theory i Besides, this paper uses a quantitative research strategy generating the i i i i i i i i i numerical representation of a particular phenomenon through collected data It then i i i i i i i i i i i i employs the survey-style questionnaire, which is popular and effective as the i i i i i i i i i i i previous researches in the field Under time and resource limitations, the author i i i i i i i i i i i i considers the deductive approach, quantitative research strategy, and questionnaire i i i i i i i i i are the most suitable design to conduct this paper i i i i i i i i First, this study utilized secondary data coming from journal articles, textbooks, and media stories, which ensured the research motivation and literature reviews The process follows a pilot test for the validity purpose of the questionnaire by the 47 offline surveys (27 in Hanoi; 20 in HCM City) These surveys reinforced the meaning of research items and the translation of questionnaire items into the Vietnamese language The author then conducted surveys to collect primary data in the one month between February and March 2020 in Vietnam under a common sampling technique This paper collects data by online questionnaires with the i i i i i i i i purposive sampling following chosen criteria: (1) The respondent are customers of i i i i i i i i i i i Highlands Coffee or The Coffee House in Hanoi, and HCM City; and (2) The i i i i i i i i i i i i i respondent has purchased the product or service of these brands at least three times i i i i i i i i i i i i i i i i in recent three months i i i As a structural equation modeling (SEM) research, this study includes the i i i i i i i i i i exploratory and confirmatory factor analysis, and according to Gorsuch (1983), those i i i i i i i i i i i i fair samples require the minimum sample of 200 observations Also, according to i i i i i i i i i i i Hair et al., (2010), the least ratio of observations over a questionnaire item is 5:1, and i i i i i i i i i i i i i i i Kline (2015) believed that the N:q ratio should be 20 to or each parameter in the i i i i i i i i i i i i i i i i model requires 20 participants Therefore, this study with 24 items and four i i i i i 19 i i i i i i i i i i parameters from the research model needs to collect at least 120 respondents i i i i i i i i i i i i The author generated 450 questionnaires equally distributed in Hanoi and i i i i i i i i i i HCM City After check and elimination of false or incomplete responses, there were i i i i i i i i i i i i i 427 completed and valid answers for the analyzation steps (218 in Hanoi and 209 in i i i i i i i i i i i i i i i HCM City), which indicated the valid rate of 94.9% i i i i i i i i In terms of analytical technique, this study utilized IBM SPSS Statistics 20 and AMOS 21, which is an added module of SPSS to conduct multivariate analyses and test hypotheses AMOS is a popular tool in SEM, and it also helps to graph and to modify the relationship between variables 3.2 Data collection instruments This paper studies the relationship between five variables, including price, quality, congruence, customer satisfaction, and brand loyalty The scale using for the research has been used in previous researches to apply to the case of the coffee shops industry in Vietnam In specific, the price variable consists of four items dropped from Yoo et al., (2000) The congruence variable comprises of six items of ideal-self congruence and lifestyle congruence adopted from Nam et al., (2011) The product and service quality variable was evaluated with six items from Nam et al., (2011) Customer satisfaction and brand loyalty measured by four items respectively, were adopted from Choi et al (2011) Apart from demographic questions, surveys of this study also employed a fivepoint Likert scale for all those variables to assess the answers of respondents ranging from strong disagreement to strong agreement The table below then summarizes the scale and construct of the questionnaire: Tải FULL (61 trang): https://bit.ly/3dlpbZN Dự phòng: fb.com/TaiHo123doc.net 20 Table 3.1 Questionnaire scale and construct Variable Price Item PR1 The price of this brand is higher than other brands PR2 The price of this brand is lower than other brands PR3 PR4 Quality Congruence Item Code The price of this brand is more affordable than other brands The price of this brand is more expensive than other brands QL1 Quality of foods and drinks QL2 Staff behavior QL3 Physical quality QL4 Staff behavior QL5 Quality of atmostphere and space QL6 Attitude of staff CON1 Self-congruence from other personal view CON2 Lifelstyle support CON3 Self congruence from other people’s view CON4 Lifestyle congruence CON5 Ideal self expectation CON6 Personal lifestyle CS1 Foods and drinks satisfaction Customer CS2 Staff behavior satisfaction Satisfaction CS3 Good experience in this coffee chain brand CS4 Choosing this brand is a right choice BL1 Sharing good comments about the brand Brand BL2 Continue purchasing and using the brand in future Loyalty BL3 Prefer this brand to others BL4 Recommend this brand to someone who ask 21 3.3 Data analysis Structural equation modeling (SEM) has advantages in running multiple regression models simultaneously, while one variable might be both independent and dependent This study follows the typical steps in an (SEM) research to investigate the relationship in literature Firstly, each latent variable will go through the reliability check based on the Cronbach’s alpha indices If the observed variables meet the required threshold, the remained indicators proceed to the explanatory factor analysis (EFA) for testing if they belong to the same variables The critical result is the principal axis factoring with the convergence of criteria into iterations The CFA analysis step follows to examine the reliability of the measurement items as a whole with the goodness-of-fit and statistical indices The last step is to run the SEM analysis, where the path loading of the proposed model will be tested In this study, the objects are the coffee chain market in Hanoi and HCM City; therefore, we will run the model twice for checking the hypotheses and comparing the results of two cases Tải FULL (61 trang): https://bit.ly/3dlpbZN Dự phòng: fb.com/TaiHo123doc.net 22 CHAPTER 4: FINDINGS 4.1 General results 4.1.1 Demographic information The first part of the questionnaire focused on the profile of respondents There were a total of 450 surveys given in which 427 responses are valid to continue to the next step In these valid responses, the majority were male in both cases of Hanoi and HCM City In terms of age, this research has a relatively equal distribution of three groups; each of them accounted for 30% of the total sample Highlands Coffee and The Coffee House are the objects of the study because they are competitors, serve the targeted customer in the same price range Please see Table 4.1 for the presentation of the demographic background of the sample Table 4.1 Profile of respondents Hanoi Characteristics Frequency HCM City Percent (n = 218) Frequency Percent (n=209) Gender Male 119 54.6% 122 58.4% Female 99 45.4% 87 41.6% Under 22 67 30.7% 55 26.3% From 22 to 32 71 32.6% 80 38.3% Over 32 80 36.7% 74 35.4% Highlands Coffee 117 53.7% 117 56.0% The Coffee House 101 46.3% 92 44.0% Age Brand 6796371 4.1.2 Demographic customer behavior The next few questions in the surveys explored the behavior of respondents when purchasing products or services of chain coffee shops This study concentrated on the customers who used the service of coffee houses at least three times in the last three months, and the most highest frequency is the group of four times Also, it is surprising that in recent three months, more than 10% of the respondents buy products 23 ... brand equity, customer satisfaction, and brand loyalty in the Vietnam? ??s chain coffee shops The chain coffee shops are earning big money and growing fast in Vietnam so that it is necessary to appreciate... congruence on customer satisfaction and satisfaction on brand loyalty in Hanoi and Ho Chi Minh City chain coffee shops The analyses also indicate that among three antecedents of customer satisfaction,.. .VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY -*** NGUYEN HUU CUONG A STUDY ON CUSTOMER BEHAVIORS IN CHAIN COFFEE SHOPS IN VIETNAM MAJOR: BUSINESS ADMINISTRATION CODE: