Impact of product involvement factors on cell phone users loyalty in ho chi minh city

() i VIETNAM NATIONAL UNIVERSITY – HO CHI MINH CITY INTERNATIONAL UNIVERSITY SCHOOL OF BUSINESS IMPACT OF PRODUCT INVOLVEMENT FACTORS ON CELL PHONE USERS’ BRAND LOYALTY IN HO CHI MINH CITY In Partial.

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VIETNAM NATIONAL UNIVERSITY – HO CHI MINH CITY

INTERNATIONAL UNIVERSITY SCHOOL OF BUSINESS

IMPACT OF PRODUCT INVOLVEMENT FACTORS ON CELL PHONE USERS’ BRAND LOYALTY IN HO CHI MINH CITY

In Partial Fulfillment of the Requirements of the Degree of

BACHELOR OF ARTS in BUSINESS ADMINISTRATION

Student’s name: NGUYEN DUC DANH (BAIU09139)

Advisor: HOANG THI PHUONG THAO, Ph.D

Ho Chi Minh City, Vietnam

2013

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IMPACT OF PRODUCT INVOLVEMENT FACTORS ON CELL PHONE USERS’

BRAND LOYALTY IN HO CHI MINH CITY

_ Hoang Thi Phuong Thao, Ph.D Nguyen Quynh Mai, Ph.D., Chair

_ Nguyen Nhu Tung, MBA., Secretary

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Ho Thi Bich Van, Ph.D

_ Hoang Thi Phuong Thao, Ph.D

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ACKNOWLEDGMENTS

This is a pleasure to express my sincere gratitude to all those who made this thesis possible First and foremost, I would have not finished this thesis without the support

of my professional advisor, Mrs Hoang Thi Phuong Thao, who has always been there for

me whenever I need her, the encouragement she gave to keep me going and her care to empower me which never fails all the time Mrs Hoang Thi Phuong Thao, you taught me things beyond my understanding Thank you for treating me with respect and being a friend throughout my time of doing this thesis You really are a wonderful advisor To you, I give you lots of sincere thanks and respect Thank you

To Ms Chau Thi Bich Nga, Mr Bui Dac Tri, and all the respondents who facilitated and helped me to conduct my interviews, as well as my surveys Thank you

To my friends who supported me in my research work I appreciated all the time and advice you gave to me Thank you

Especially, I would like to give special thanks to my family for their patient love, unflagging belief, and dedication during the time of doing thesis and throughout my life To all of you, thanks for supporting me and always being there for me.

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TABLE OF CONTENTS

LIST OF TABLES vii

LIST OF FIGURES ix

ABSTRACT x

ABBREVIATIONS xi

CHAPTER I: INTRODUCTION 1

1.1 Background of the Research 1

1.1.1 Global mobile phone market 1

1.1.2 Mobile phone market in Vietnam 3

1.2 Rationale of the Research 5

1.3 Problem Statement 5

1.4 Research Objectives 7

1.5 Research Questions 7

1.6 Research Methodology 7

1.7 Relative Researches 8

1.8 Scope of the Study 8

1.9 Implications of the Study 9

1.10 Structure of the Research 9

CHAPTER II: LITERATURE REVIEW 11

2.1 Brand 11

2.2 Brand Loyalty 12

2.3 Product Involvement .13

2.3.1 Involvement and product involvement 13

2.3.2 High product involvement versus low product involvement 15

2.3.3 Product attributes 17

2.3.4 Product knowledge 19

2.3.5 Country of origin 21

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2.3.6 Pleasure 22

2.3.7 Self-image expression 23

2.4 Relationship between Product Involvement and Brand Loyalty 24

2.5 Research Hypotheses 26

2.6 Conceptual Framework 29

2.7 Summery of the Chapter 30

CHATER III: METHODOLOGY .31

3.1 Research Design 31

3.1.1 Research methods 31

3.1.2 Research process 32

3.2 Qualitative Research 32

3.2.1 Desk research 32

3.2.2 Individual depth interview 33

3.2.3 Questionnaire construct 34

3.3 Measurement scales 35

3.3.1 Product attributes perception 35

3.3.2 Product knowledge 36

3.3.3 Country of origin 36

3.3.4 Pleasure 37

3.3.5 Self-image expression 37

3.3.6 Brand loyalty 38

3.4 Quantitative Research 38

3.4.1 Sample size 38

3.4.2 Sampling method 39

3.4.3 Data analysis 40

3.5 Summery of the Chapter 40

CHAPTER IV: DATA ANALYSIS AND RESULTS 41

4.1 Descriptive Statistics 41

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4.1.1 Sample description 41

4.1.2 Descriptive statistics for independent and dependent variables 44

4.2 Reliability and Factor Analysis 46

4.2.1 Reliability analysis 46

4.2.1.1 Reliability test for Product attributes perception scale 48

4.2.1.2 Reliability test for Product knowledge scale 50

4.2.1.3 Reliability test for Country of origin perception scale 50

4.2.1.4 Reliability test for Pleasure scale 52

4.2.1.5 Reliability test for Self-image expression scale 53

4.2.1.6 Reliability test for Brand loyalty scale 53

4.2.2 Exploratory factor analysis 54

4.2.2.1 Independent variables 54

4.2.2.2 Dependent variable 59

4.2.3 Modified conceptual framework 59

4.3 Hypotheses Testing 61

4.3.1 Correlation analysis 61

4.3.2 Regression analysis 62

4.3.3 Checking for regression assumptions violations 64

4.3.4 Hypotheses testing results 65

4.4 Summery of the Chapter 67

CHAPTER V: CONCLUSION AND MANAGERIAL IMPLICATIONS 68

5.1 Conclusion 68

5.2 Managerial Implications 71

5.3 Limitations and Suggestion for Further Research 75

LIST OF REFERENCES 76

APPENDICES 85

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LIST OF TABLES

Table 1: Top ten mobile phone manufacturers in 2012 2

Table 2: Product attributes perception measurement scale 36

Table 3: Product knowledge measurement scale 36

Table 4: Country of origin perception measurement scale 37

Table 5: Pleasure measurement scale 37

Table 6: Self-image expression measurement scale 38

Table 7: Brand loyalty measurement scale 38

Table 8: Descriptive statistics of mobile phone brands used by respondents 42

Table 9: Descriptive statistics for demographic variables 43

Table 10: Descriptive statistics for independent and dependent variables 45

Table 11: Meaning levels of Cronbach's Alpha 47

Table 12: Reliability test for measurement scales by Cronbach's Alpha 48

Table 13: Initial results of reliability test for Product attributes perception scale 49

Table 14: Final results of reliability test for Product attributes perception scale 49

Table 15: Results of reliability test for Product knowledge scale 50

Table 16: Initial results of reliability test for Country of origin perception scale 51

Table 17: Final results of reliability test for Country of origin perception scale 52

Table 18: Results of reliability test for Pleasure scale 52

Table 19: Results of reliability test for Self-image expression scale 53

Table 20: Results of reliability test for Brand loyalty scale 53

Table 21: Rotated Component Matrix 55

Table 22: Pleasure and Enjoyment measurement scale 56

Table 23: Product quality perception measurement scale 57

Table 24: Results of reliability test for Pleasure and Enjoyment scale 57

Table 25: Results of reliability test for Product quality perception scale 57

Table 26: Summery of reliability test for variables .58

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Table 27: Mean values of independent variables 58 Table 28: Modified hypotheses 61 Table 29: Correlations 62 Table 30: Standardized Beta coefficients and significance values of independent variables 63 Table 31: Summery of hypotheses testing results 65

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LIST OF FIGURES

Figure 1: Conceptual framework 29

Figure 2: Research process 32

Figure 3: Mean values of independent variables 59

Figure 4: Modified conceptual framework 60

Figure 5: Conceptual framework after regression analysis 65

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ABSTRACT This study examines the impact of product involvement factors on cell phone users’ brand loyalty in Ho Chi Minh City First, the research gives an overview of the mobile phone market in the world, as well as in Vietnam; and literature review In addition, the relationships between each construct are assumed or indicated based on the previous researches Both qualitative and quantitative research method were applied in this research Questionnaires were designed based on desk research and individual depth interview Data collected from questionnaires was analyzed by quantitative testing methods in SPSS software Finally, the conclusion and managerial implications, as well as limitations and suggestion for further research are reported

Total 250 questionnaires were collected in this research The results show four factors have positive impacts on Brand loyalty, include: Product quality perception, Country of origin perception, Pleasure and Enjoyment, and Self-image expression; while there is no relationship between Product knowledge and Brand loyalty of mobile phone users in Ho Chi Minh mobile phone market

The managerial implications draw from this study to which mobile phone manufacturers can refer are: 1) Creating pleasure and enjoyment for consumers, 2) Developing technologies to improve product quality, 3) Catching and understanding consumers’ personalities, and 4) Creating good image for products’ country of origin By these ways, mobile phone manufacturers can remain and enhance the brand loyalty of consumers

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ABBREVIATIONS

1.1 Background of the Research

1.1.1 Global mobile phone market

According to latest data of Gartner – a famous and prestigious company specializing in information technology research and advisory, there were 1.75 billion mobile phones sold all over the world in 2012 This is the year in which the world behold an important change: Samsung outperformed Nokia in the global cell phone market to become the market leader based on its 2012 commercial performance That also officially ended 14 year-reign of Nokia – the brand which is always considered as

“The king of mobile phone market” This is the first time during recent 14 years that Nokia has been taken its leader position in mobile phone market by another competitor

After many years staying at the second position in cell phone market, finally, in

2012, Samsung could enjoy the feeling of a market leader The main reason which helped this Korean mobile phone manufacturer to be successful is its smartphone sales According to annual report of IDC, during 2012, Samsung sold 216 million smartphones, took 36.9% smartphone market share and was also the leader in this product line market Nokia, meanwhile, could not even take the second position in smartphone market because it just sold 35 million units of smartphone, took 6.4% market share, too little to compare to 137 million smartphones sold by Apple – who stood at the second position with 25.1% market share in smartphone market

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Samsung ended 2012 with the number one position in overall mobile phone market, both in smartphone and cell phone market areas Five biggest mobile phone companies in 2012 are: Samsung, Nokia, Apple, ZTE and LG According to IDC’s statistics, during 2012, Samsung had 385 million mobile phones sold, took 22% market share Being knockouted from the leader position by Samsung, Nokia fell to the second position with 334 million mobile phones sold in 2012, as 19.1% market share The famous brand – Apple settled the third position with 7.5% market share, means that 130 million Iphones were sold The next position belongs to ZTE – a Chinese company whose sales reach to 67 million units of mobile phone (3.9% of the market), and ranked

at the fifth position is LG with 58 million mobile phone sold, which took 3.3% market share

Table 1 Top ten mobile phone manufactures in 2012

(Source: Gartner’s report)

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1.1.2 Mobile phone market in Vietnam

Nowadays, mobile phone is becoming one of the most important technology devices serving different needs of human, especially information connection need Because of the rapid growth rate of the economy, combines with the efforts of international economic integration, Vietnam has gradually become an attractive market for foreign mobile phone companies Together with other high technology products, more and more mobile phones were imported and sold in Vietnam According to latest statistics of TechniAsia, there were averagely 145 mobile phones for 100 Vietnamese

in 2012 That means the number of mobile phones used is up to 130 million, while Vietnamese population is more than 90 million people Therefore, it is no surprise that mobile phone imports in the country have seen a 70% year-on-year increase According

to the Ministry of Industry and Trade, Vietnam spent $4.47 billion on mobile phones imports in 2012 With a high level of competition and the constant launch of new products, mobile phone is expected to grow up as the leading product of Vietnamese technology market in the future

In the past, there were only 5 main mobile phone brands (took 90% market share) includes Nokia, Samsung, Motorola, Sony Ericsson and Siemens delivering their products in Vietnam However, until 2012, there were more than 40 different brands took part in the market According to IDC’s report, top three mobile phone vendors in Vietnam in the second quarter of 2012 are Nokia, Samsung and Vinaphone

In spite of the decrease of worldwide shipment, Nokia was still the dominant brand in Vietnam's cell phone market It finished the second quarter of 2012 as the overall market leader, since its shipments accounted for more than half of all mobile phone shipments in Vietnam Nokia’s performance was driven by the success of its dual-SIM and low-cost phones which have price under 2 million VND, while its Lumia series met with a positive reception this quarter

Entry-level Samsung models continued to drive the majority of its smartphone shipments with outstanding low-price smartphone product lines such as GalaxyY and Galaxy Mini, because Vietnamese consumers remain price-sensitive and cautious amidst tough economic conditions Strong performance in this segment allowed

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Samsung to keep dominating the Vietnam smartphone market However, there was still

a big gap about total number of mobile phones delivered in Vietnam between Nokia and Samsung

Also by producing low-cost and dual-SIM mobile phones, Vinaphone raced into the top 3 position, bullishly introducing a large number of new models this quarter to boost its penetration across under-penetrated regions of Vietnam

In recent years, Vietnam is always seen as one of the most potential markets in Asia for mobile phone manufacturers The country has been modernized and industrialized days by days, and the demand of using mobile phone among population can be seen as an essential connection need in the society Besides it, the worldwide trend in transferring from using feature mobile to smartphone among cell phone users also occurs positively in Vietnam Hence, mobile phone market in Vietnam nowadays

is very competitive with many brands, both old and new ones Vietnamese and Chinese mobile phone brands are competing to occupy market share in feature mobile phone market, which is in the domination of Nokia, by focusing on low-cost smartphone By this strategy, these brand can compete to their big competitors such as Nokia or Samsung… because their products are not only cheap but also smartphones Cannot be slow in a dynamic market like Vietnam, big mobile phone companies also have their own business plans for this country in 2013 Nokia will push their Lumia series product line development, while Samsung announced that in 2013, a half of their products will

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1.2 Rationale of the Research

In today's Vietnam’s mobile phone market of intense competition, it becomes imperative for mobile phone operators to focus on the involvement of cell phone users

to deliver superior customer value, achieve higher customer satisfaction and keep their existing customer or attract potentially profitable new customers, which consequently, enables them to make more profits and build sustainable competitive advantages Ho Chi Minh – the biggest city in Vietnam has a very active mobile phone market and the trend of cell phone users here changes days by days This is an opportunity as well as a big challenge for mobile phone companies to do their business in this market Therefore, efforts is required to better equip mobile phone companies to create effective product involvement in customers so that they can be highly loyal to the brand of the mobile phone they are using

Although previous studies have mentioned to factors affecting on brand loyalty

of cell phone users in Vietnam such as brand personalities, customer satisfaction…, the relationship that exist between product involvement and brand loyalty still remains a key issue for Ho Chi Minh's mobile phone market Hence, this empirical study seeks to understand this relationship based on certain factors of product involvement, which will

be mentioned more specifically in next sections and chapters

1.3 Problem Statement

Obviously, every companies want to create, build and maintain a strong loyalty

of customers toward their brands, because strong loyalty can maintain a strong market share and garner high profits Brand loyalty can also lead to other mobile phone marketing advantages such as world of mouth referral and greater competitive resistance (Datta, 2003) However, it is not easy at all to maintain brand loyalty of customers, especially in an extremely competitive market like Vietnamese mobile phone market today Attracting customers to buy our products is hard, but maintaining their loyalty to us is even more difficult Mobile phone manufacturers do everything they can think to keep the loyalty of cell phone users to their brands More specifically, they must focus on one of the most fundamental factors of a product: it is product involvement In their research about the link of product involvement and brand loyalty,

As a result of the appearance of various mobile phone brands in Vietnamese market nowadays, attracting customers to buy products of a brand is not easy as in the past because cell phone users today have too many choices Especially, in Ho Chi Minh – the biggest market in consuming mobile phone in Vietnam – to which has most of cell phone retail stores concentrate, the competition situation between cell phone brands occurs intensively Therefore, mobile phone companies have to create the high level of satisfaction from customers toward their product by building a high product involvement In other words, cell phone companies have to make their customers think that their products are so interesting, worth to buy, or their products can express consumers’ personalities… High product involvement will lead to the trust, positive views and evaluation of consumers toward the brand, and, as a result, their brand loyalty will also be enhanced (Traylor, 1983) However, how product involvement affects on cell phone users’ brand loyalty in Vietnam market, specifically in Ho Chi Minh City? And by what ways a mobile phone company can create high product involvement? These problems have not been studied yet

Therefore, the need to study about factors of product involvement which impact

on cell phone users’ brand loyalty is necessary Based on that, mobile phone companies can create product improvement for customers to enhance their brand loyalty, as well

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as take more market share With the aim to study and offer conclusions for contributing

in branding, as well as enhancing customer’s loyalty toward brands of mobile phone companies, researcher choose the topic: “Impact of product involvement factors on cell phone users’ brand loyalty in Ho Chi Minh City”

1.4 Research Objectives

The main goal of this research is to investigate how product involvement factors impact on cell phone users’ brand loyalty in Ho Chi Minh mobile phone market In detail, the study will identify the nature and relationship between product involvement factors and brand loyalty At last, researcher will suggest feasible policies for mobile phone companies to improve their customers’ loyalty toward their brands

1.5 Research Questions

The main purpose of this research is to determine the impact of product involvement factors on brand loyalty of cell phone users in Ho Chi Minh City Based

on that, research questions for the study are as follows:

- What are the main product involvement factors of cell phone brands in Ho Chi Minh City?

- How do these factors influence to brand loyalty of Ho Chi Minh cell phone users?

- What should mobile phone manufacturers do to enhance brand loyalty of their users based on product involvement factors?

1.6 Research Methodology

The research is implemented through two main stages:

1) Qualititive research: Collect both secondary and primary data by searching information, individual depth interview and conducting survey to strengthen theoretical foundation of the research, as well as to get required data for quantitative research

2) Quantitative research: Identify sample size and sampling method to conduct the survey Collected data from survey is analyzed by SPSS software with kinds of test such as: descriptive statistics, reliability test (Cronbach’s Alpha), exploratory factor analysis, and regression analysis

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1.7 Relative Researches

This research has referred to various related previous studies’ theoretical foundation, conceptual frameworks, conclusions… However, main studies which have fairly strong contribution on this research’s theoretical foundation include: An examination of how product involvement affects brand loyalty of Douglas (2006), Evaluation of the effects of product involvement facets on brand loyalty (Hanzaee et al., 2011), Product involvement/brand loyalty: Is there a link? (Quester and Lim, 2003), research of Shahin et al (2012) and Saydan (2013) on exploring the relationship between country of origin and brand equity, ect

In order to design questionnaires for this research’s survey, items in measurement scales of various studies has been referred The main studies referred for this include: studies of Douglas (2006), Bian (2008), Tuan (2008), Zhang (2008), and Thimangu (2010) Topics of these research are about relationship of product involvement factors and brand loyalty, or perceptions and behaviors of consumers toward particular products… This will be clearly clarified in chapter III

1.8 Scope of the Study

This research is studied on 250 cell phone users in Ho Chi Minh City, who are

18 and above An important condition for respondents in this research is the mobile phone they use must has the value equal or over than 1 million VND (at the time they bought it) This is because consumers will have high involvement to high value products and vice versa High involvement products are those that we take much time and effort in decision making about buying them or not Wrong decision making may harm our financial and social status, as well as our ego Therefore, a high ivolvement product is uasually a valuable one that customers need to care about its price before buying it Researcher set the price of mobile phones in this study is equal or over than

1 million VND to ensure that respondents are highly involved to the mobile phone they use In other words, the research is just conducted on people using cell phones that are equal or over than 1 million VND

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1.9 Implications of the Study

Mobile phone market has been developed rapidly in Vietnam days by days, especially in the biggest and most active city of the country – Ho Chi Minh Many interesting features are introduced continuously to mobile phone users to meet their needs in communication, working, entertainment…, new mobile phone models with attractive appearance are launched at competitive price levels, as well as the participation of foreign manufactures make mobile phone market become more and more competitive because customers have more choice now

Findings of this research will help mobile phone manufacturers understand how product involvement, through its factors, affects on brand loyalty of cell phone users in

Ho Chi Minh City This will help them in laying down fundamental competitive strategies for share of mind, survival, market share expansion, customer retention, building on customer loyalty etc

The study will also help marketers’ of mobile phone companies in understanding the importance of product involvement’s factors such as consumer’s perception in product attributes, their product knowledge, as well as hedonic values they can get from mobile phones, toward their brand loyalty From that, marketers can use marketing tools to capture either consumer’s positive/negative perception about their respective brands This will lead to increased market share

Consumers will also benefit in understanding their own behavior With such knowledge, consumers will be able to make fast viable decisions For academicians, various proposals will be suggested for further research The research will also be of fundamental importance to both future researchers and academicians in pursuing this subject further

1.10 Structure of the Research

This research includes five chapters:

- Chapter I is the introduction chapter which gives a general view of mobile phone market in the world, as well as in Vietnam; state the research problems, objectives, questions and methodology of the research This chapter also indicates the scope, suggested implications of the study and introduce the research’s structure

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- Chapter II proceeds with the review of the related theories of brand, brand loyalty and product involvement Furthermore, it provides a framework to show the relationships among factors and to develop several hypotheses in this framework

- In Chapter III, the justification for the choice of both qualitative and quantitative approach is introduced Moreover, this chapter outlines the sample of participants, measures of variables, questionnaire design, measure validity, and the procedure of the hypothesis test

- Chapter IV presents the data analysis and findings of this study It offers a detailed analysis of the data through 250 respondents by SPSS solfware with kinds of test: descriptive statistics, reliability test (Cronbach’s Alpha), exploratory factor analysis, and regression analysis

- Chapter V is the final chapter which outlines main results of data analysis and limitations of the present study Besides, some future research recommendations and a conclusion is also offered in this chapter

2.1 Brand

According to the American Marketing Association (AMA), a brand is a “name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.” Technically speaking, then, whenever a marketer creates a name, logo,

or symbol for a new product, he or she has created a brand (Keller, 2008)

Lau and Lee (1999) had similar definition: “A brand is a name, term, sign, symbol, or design (or a combination) intended to identify a seller’s goods or services, and to differentiate them from competitors” “A brand is a set of mental associations, held be the consumer, which add to the perceived value of a product or service” (Keller, 1998)

A brand gives particular information about the organization, good or service, differentiating it from others in marketplace and carries an assurance about the characteristics that make the product or service unique, which can help to develop the loyalty of customers toward the brand A strong brand is a means of making people aware of what the company represents and what it is offering

The definition seen as the most appropriate for this thesis will be the definition from Keller (2008)

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2.2 Brand Loyalty

Brand loyalty is said to occur when a customer makes the choice of purchasing one brand from a set of alternatives, consistently over a period of time In traditional sense, brand loyalty refers to repetitive purchase behavior or the propensity to purchase

a brand again or the result of cognitive activity and decision making (Mittal and Myung, 1988)

Brand loyalty is a form of repeat purchasing behaviour reflecting a conscious decision to continue buying the same brand (Morris, 1996) Accordingly, the conscious loyalty comes from the prior satisfaction of consumer decisions (Bell and Eisingerich, 2007) In addition, a consumer, who has brand loyalty of a certain brand, tends to use this brand product

Brand loyalty is also the result of extensive cognitive activity and decision making and it is a form of repeat purchasing behavior reflecting a conscious decision

to continue buying the same brand Dick and Basu (1994) argued that true brand loyalty exists when customers have a high relative attitude towards the brand, which is then exhibited through repurchase intentions Some view that brand loyalty is a process of repurchasing which happens due to situational constraints, lack of viable alternatives or out of convenience (Argawal and Malhotra, 2005)

Brand loyalty is a two dimensional construct, comprising attitudinal and behavioral loyalty (Aydin and Gokhan, 2005) Behavioral loyalty is explained as the overt act of selective repeat buying based on evaluative psychological decision whereas attitudinal loyalty is explained as the underlying predispositions Attitude towards a brand is a multidimensional construct (Arunkumar and Meenakshi, 2003) that relies upon cognitive (knowledge about the brand), affective (positive/negative emotions about the brand) and conative (Behavioral dispositions or intention to buy) components

- Cognitive loyalty:

Dick and Basu (1994) suggested that brand affect addresses the emotional aspect of brand loyalty but cognitive loyalty is more rational They view that cognitive loyalty consists of four facts: accessibility, confidence, centrality and clarity Accessibility is the ease with which an attitude can be retrieved from the memory On

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the other hand attitudinal confidence is the level of certainty with an attitude or evaluation The strength to which an attitude towards a brand is related to the value system of a consumer indicates its centrality and an attitude is well defined when a buyer perceives alternative attitude to a brand objectionable

- Affective loyalty:

Chaudhuri and Holbrook (2002) defined brand affect as “The potential in a brand to elicit a positive emotional response in the average consumer as a result of its use” The strength of relationship between a brand and its buyers depends to a considerable extent by the magnitude of positive affect generated by that brand A high level of commitment toward a brand is affected by positive affective responses

- Conative loyalty:

Dick and Basu (1994) described conation as behavioral decomposition The defining element is the behavior loyalty is the buyers’over purchase behavior of a particular brand from amongst a large number of competing brands

2.3 Product Involvement

2.3.1 Involvement and product involvement

The concept of involvement has received much attention in social psychology and, more recently, in marketing to study consumer behavior Involvement originates from social psychology and the notion of “ego involvement,” which refers to the relationship between an individual and an issue or object This conceptualization has been the basis for applying involvement in consumer behavior However, the many and varied definitions and treatments of involvement in social psychology mean that its application in this domain remains complicated The involvement construct became linked to marketing and consumer behavior following Krugman’s (1967) measurement

of involvement with advertising (Michaelidou and Dibb, 2006)

Since then, and specifically through a period of increasing consumer research activity in the 1980s, attention has focused on the conceptualization and measurement

of involvement in relation to “objects” such as a product, message, purchase task, advertising or activity (Hanzaee et al., 2011) Because involvement is a matter of interpretation, rather than the stimulus itself, it may be expected that the involvement

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level of different people will vary in relation to the same object, due to differences in personality, previous experience, the consumer’s socio-demographic status, etc (Antil 1984)

Adopted by the pioneers of consumer behavior such as Blackwell, Miniard et

al (2001) and later adopted by Zaichowsky (1985) and Celsi and Olson (1988); Douglas (2006) synthetized that involvement “Reflects the extent of personal relevance

of the decision to the individual in terms of his basic values, goals and self-concept.” Similarly, Zaichkowsky (1985) is in among famous theorist about involvement, defined involvement as visual dependency of a person from an object based on basic needs, values and interests

However, despite the existing research on involvement, many researchers are convinced that no complete understanding of the involvement concept has yet been formulated Similarly, the concept of product involvement has been studied by numerous researchers in consumer behavior and offered as a useful way to understand characteristics of various consumer groups as well as their behavioral tendencies (Hanzaee et al., 2011)

Product involvement reflects recognition that a particular product category may

be more or less central to people’s lives, their sense of identity and their relationship with the rest of the world (Traylor 1981) In other words, product involvement is the perceived personal relevance of the product, based on needs, values or interest (Zaichkowsky 1985, 1986)

According to Miller and Marks (1996) and Gordon et al (1998), product involvement involves an ongoing commitment on the part of the consumer with regard

to thoughts, feelings, and behavioral response to a product category

Researchers studying consumer behavior have important contribution to product involvement Studies have shown that product involvement can affect the decision-making process regarding a product, the extent of the consumer’s search for information about the product, the manner in which the consumer’s attitudes and preferences regarding the product are influenced, and the consumer’s perceptions

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regarding the various alternatives to the same product category (Celsi and Olson 1988; Brisoux and Cheron 1990; Leclerc and Little 1997)

2.3.2 High product involvement versus low product involvement

Product involvement is independent of situational influences (Rodgers and Schneider, 1993; Miller and Marks, 1996) Richins and Bloch (1986) noted that consumers with high product involvement would find the products interesting and this would occupy the consumers’ thoughts without the stimulus of an immediate purchase Such interest in the product category may arise from the consumer’s perception that the product class meets important values and goals This study is concerned with the construct of product involvement, a more permanent and consumer-based construct

Consumer involvement also suggests a continuum of consumer interest (Douglas, 2006) Vaugh (1980) added that are high in cost, ego, support, social value, newness and risk require more information and attention to process In contrast, low involvement products attach little interest, are less risky and thus require less information and effort in purchasing process For example, buying a car is totally different buying a ball pen because car has high value, and it takes a lot of money to buy, with some potential risks which can happen if buyer make a wrong decision, thus customers have to think carefully before making buying decision, whereas ball pen is

so cheap that buyer does not need to consider carefully before buying it

According to the study of Saha et al., involvement theorists also focused on the consumer’s involvement with different product categories and purchase situations It is postulated that since there are high and low involvement buyers; there are high and low involvement purchase situations as well High involvement purchases are those that are very important to the consumers in terms of perceived risk and urge consumer’s to engage in extensive problem solving When consumers have no established criteria for evaluating a product category or specific brands in that category, their decision efforts can be termed as extensive problem solving At this level, the buyer needs a great deal

of information to establish a set of criteria on which the competing brands are evaluated

To clarify the situations when high or low involvement happens, Ghafelehbashi et al (2011), in their study about types of involvement in consumer behavior, stated:

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High involvement happens when a person anticipates the purchase, that have a personal relation to it and there is a high risk about it Car, dish washing machine, insurance, and house… are valuable items which purchase rarely and create many involvements Mentioned risk is these situations is financial risk Besides, selecting perfume, clothes, or jewelry based on social risk which overcome purchase decision, may indicate high involvement Also consumer spends much time and effort to search for information, as well as care about the product’s atrributes or its country of origin… before making purchase decision with the aim to decrease risk as much as possible

Low involvement is low mental involvement in relation to purchasing a product For items with low price such as washer powder, toothpaste, cereals…, which purchase repeatedly, there is no need to collect information or to put emphasis on it Items such

as alcoholic liquors and nonalcoholic beverage, all types of cigarette, and chocolate, are among low involvement products Although, they create strong sense of self satisfaction which results from product

Consumers who attach an importance to a product, or have interest evoked by a product, or focus attention towards a product can be said to have a high level of product involvement (Lockshin, 1998; Richins & Bloch, 1991) Lockshin (1998) suggested that

a consumer who is highly involved with a product class will think more about this product, will search more widely for information relating to it, such as information about product functions or its country of origin…; and will spend more time and effort during the purchase decision making process than lesser involved consumers will

As stated in chapter I, the scope of this research is bounded by cell phone users whose cell phones are equal or over than 1 million VND – considered as a type of product which has high involvement from users Therefore, factors of product involvement studied in this research belong to high product involvement Specifically, they are:

1) Cell phone users’ perception in product attributes

2) Cell phone users’ product knowledge

3) Cell phone users’ perception in product’s country of origin

4) Cell phone users’pleasure

5) Cell phone users’ self images

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2.3.3 Product attributes

Earlier studies such as Lancaster (1966) stated that attributes are the objective physical aspects of a product He said that people do not acquire products for the benefits of the products themselves, but for the utility that is produced by characteristics

of the products attributes However, many of the product characteristics that are important from the point of view of consumers as well as designers are neither physical nor objective Therefore, according to Grunet (1989), product attribute is “any aspect

of the product itself or its use that can be used to compare product alternatives.” “Each alternative can (but need not) be characterized by all attributes, that is, using one attribute does not preclude using another” (Nelson, 1970) Attributes may concern concrete product properties, practical consequences the product and its use and possession may cause, or consequences related to consumers’ personal values

Gwin et al (2003) define product attributes as the characteristic or features that

an object may or may not have and includes both intrinsic and extrinsic features Benefits are the positive outcomes that come from the attributes People seek products that have attributes that will solve their problems and fulfills their needs Understanding why a consumer chooses a product based upon its attributes helps marketers to understand why some consumers have preferences for certain brands, because their atribute beliefs create a strong sense of preference in their mind

Both tangible and intangible attributes of a product are equally important in choosing a product or brand It was found that the more attributes (non-negative) associated with a brand, the more loyal the customers are Romariuk and Sharp (2003), suggested that marketers should focus more on how many attributes the brand should

be associated with However, the study did not specify what sort of attributes (relevant

or irrelevant, tangible or intangible) marketers should associate the brand with This is because it is important that consumer accurately learn about product attribute performances since it would influence their interpretations of product performance by causing memory encode and retrieval bias Unfounded product attribute relationship beliefs can mislead them into expecting something that is not there Hence if products fall short of customer expectations, then dissatisfaction would result It was also found

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that though irrelevant, some attributes may still be important in influencing consumer choice Making a product different from its competitors by adding even a meaningless attribute can increase consumers’ quality perception or can decrease perceived risk (Simonson and Tversky, 1992) It is evident that product attributes are most salient to the consumers (Garvin, 1983, 1984) Actually, perception of product performance on the salient attributes is more important than actual performance The attributes that consumers expect in a product and how positively or negatively they rate these attributes to help develop and promote a successful product (Malasi, 2012)

Involvement with products has been hypothesised to lead to a greater perception

of attribute differences, greater product importance, and greater commitment to brand choice Several studies of consumer behavior have examined product involvement, which pertains to feelings of inherent needs, values, enthusiasm and interest toward product categories (Zaichkowsky, 1985) These stances are evidenced in consumer tendencies to affix more importance to specific products and knowledge of attributes and brands

Zhang et al (2008), by the study on consumer perception of mobile phone attributes, concluded that there is no precise definition of product attributes for mobile phones, as consumers generally perceive product attributes in a conceptual way The notion of product attributes is formed and existing during the perception process Also

in their study, Zhang et al identified 8 product attributes of mobile phone consumers are concerned about when they evaluate mobile phones or make purchase decisions They are: common functions, appearance, multimedia functions, connectivity, personal information management functions, body design, brand & country, and product image Indeed, besides price, most of these factors get the attention and interest from consumers when they intend to buy a mobile phone They are also the main information cell phone manufacturers commonly expose when they introduce a new product to consumers

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2.3.4 Product knowledge

Product knowledge is describe as general knowledge that customer has information about functional characteristics of products and brand It also is known as product familiarity, expertise and experience (Lee and Lee 2009) According to Brucks (1985), consumer product knowledge is categorized into three kinds:

- Objective knowledge: what a consumer actually knows about a product class,

or the amount, type and organization of what a consumer has stored in his memory

- Subjective knowledge: what a consumer thinks he knows, or the consumer’s perception of how much he knows

- Experience-based knowledge: the amount of purchasing and usage experience

Wirtz and Mattila (2003) stated that objective knowledge and subjective knowledge have differential influence on consumers’ search activities and information processing High objective knowledge allows consumers to encode information about new alternatives more efficiently, while high subjective knowledge leads to a greater reliance on one’s own evaluation skills (Bucks, 1985) On the other hand, consumers high in subjective knowledge should have less well developed category structures stored in memory than consumers high in objective knowledge who tend to keep themselves updated about market conditions (Park and Lessing, 1981)

Product knowledge also plays a prominent role in information search behaviour and it is an important indicator of consumer behaviour Lin and Chen (2006) concluded that as product involvement increases, the influence of product knowledge on both information search and purchase decision becomes greater Usually people undertake certain actions before actually purchasing, including:

- Information search: this means when the consumer faces many consuming relevant questions, he/she requires relevant information to assist with his/her consuming decision (Solomon, 1997)

- Information processing: includes consumer self selects to expose, notice, recognize, agree, accept, or retain No matter how much knowledge the consumer has,

Involvement is also a motivational state that energizes and directs consumers’ cognitive and affective processes and behaviors as they make decisions For instance, consumers who are involved with cameras are motivated to work harder at choosing which brand to buy They may spend more time and effort shopping for the product (visiting more stores, doing research online) They may interpret more product information in the environment (read more ads and brochures), and they may spend more time and effort integrating this product information to evaluate brands and make

a purchase choice

Similarly, according to Engel and Blackwell (1982), consumers will search for more information at the high involvement level, especially for external information In contrast, low involvement consumers will search for little information, and mainly depend on internal information From that, it can be seen that consumer involvement is when a consumer is stimulated by personal recognition and/or interest in the product under a specific environment (Engel et al., 1995) This will have an impact on a consumer’s intention to search for further information and build up his or her knowledge about a product In other words, the more customers interest in a product, the more knowledge they get from their searching and interest activities toward the product

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2.3.5 Country of origin

Consumers identify many well-known brands with particular countries, even if the product being evaluated was not manufactured in the firm’s country of domicile (Hanzaee, 2011) The brand's country of origin is an important marketing element known to influence consumer perceptions as well as behavior, because it can guide to associations in the minds of consumers (Aaker, 1991; Keller, 1998) The country of origin of a product is an extrinsic cue which is similar to brand name This cue is known

to influence consumers’ perceptions and lead consumers to cognitive elaboration (Pappu, 2006)

Hong and Wyer (1989) compared the effects of product attributes and country

of origin associations on consumers’ product evaluations Their study suggested that consumers’ awareness of a product’s country of origin has a direct influence on consumers’ quality perceptions This is true because country of origin becomes a heuristic basis for inferring the product quality without considering other attributes Similarly, Chaiken and Maheswaran (1994) believed that consumers simplify judgments on product quality by retrieving preestablished evaluations from their memories These pre-established evaluations act as shortcuts for judging the quality of

a product Therefore, consumers may use information, like country of origin, as the overall basis for judging the quality of a product

In a meta-analysis of 52 published studies, Peterson and Jolibert (1995) found that country of origin accounted for 30 percent of the explained variance for quality and reliability perceptions In another meta-analysis of empirical studies published between

1980 and 1996, Verlegh and Steenkamp (1999) reported that the country of origin had

a stronger influence on quality perceptions than on purchase intentions They stated that consumers form a particularly strong link between country of origin and perceived product quality This supported to the definition about country of origin of Han (1990), stated that: “Country of origin is consumers’ general perceptions of quality for products made in a given country.”

Besides consumers’s perceptions of product quality, products originating from

a specific nation will have a level of risk and a social image associated with them by

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the evaluating consumer (Forbes, 2008) Specifically, many consumers think that the level of risk associated with products from less developed nations is higher than for those originating from developed nations (Bilkey & Nes, 1982) That is the reason why

we are more reliable in a product which comes from USA than another one made in China

Consumer product involvement is one of the important factors moderating the country of origin effects on consumers’ product evaluation and purchase intention Consumers consider the purchase to be very important and thus provoke extensive information processing in high-involved purchases (Shiffman et al., 2010) Some researches discovered that country of origin effect is more pronounced among less-involved consumers while country of origin cue does not have differential influence on more product-involved consumers’ product evaluation (Josiassen and Assaf, 2010; Prendergast et al., 2010; Josiassen et al., 2008; Maheswaran, 1994) Other earlier researches also investigated on the importance consumers place on country of origin cue when evaluating products by measuring their product involvement level (Pharr, 2005; Verlegh and Steenkamp, 1999) Specifically, Samiee (1994) argued that the purchase of low involvement products may be of such little importance to the consumer that they would not warrant the evaluation of a cue such as country of origin; and similar

to Samiee’s study, Lin and Chen (2006) found that as the level of consumer product involvement increased, the country of origin image was found to have a greater influence on information search intention and a significantly positive influence on purchase intention

2.3.6 Pleasure

The pleasure is hedonic value derived from the product (i.e., involvement in recreational activities is pleasurable for most individuals and many authors suggest that the consumption of recreation often results in fun, enjoyment, amusement, fantasy, arousal, and sensory stimulation) (Mannell, 1980) According to Kapferer and Laurent (1985), pleasure is the emotional attraction state, the ability of product to bring comfort and emotion to consumers It is also one of the most important factors in consumer behavior

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Based on Kapferer and Laurent (1985) Consumer Involvement Profile scale (CIP), pleasure is one of the five facets that can be used to explain consumer involvement with a product Hedonic values of a product are obtained by customers through the intrinsically pleasing properties of a product (Wirtz and Lee, 2003) Hedonic values are also associated with the sensory and experiential attributes of the product (Batra et al., 1990)

2.3.7 Self-image expression

Researches show that consumers choose brands whose images are congruent with their own images The more brand gains meaning for the consumer, the more it becomes identitical with the self Self-image congruity can also generate attachment to

a specific brand Consumers attribute human qualities to brands, and then they develop attitudes towards symbolic concepts assumed to be carried by the brands, because consumers perceive brand not only as a commercial meta, but also as a friend, a partner,

or even a lover (Fournier, 1998)

Sirgy, in his research about self-concept in consumer behavior (1982), stated that products and brands possessed and consumed are a way to define whom a person wants to be or wants to be seen as by others to himself and people whose thoughts are important Sirgy also argued that self concept is defined by self image which is of four sub-selves called actual self, social self, ideal self and ideal social self Actual self is how a person sees himself, whereas social self is how he thinks he is seen by other people Ideal self is how a person wants to see himself and ideal social self is how he wants to be seen by others

Consumers use brands’ image which they consume and possess to deliver their own image Consumers give their buying decisions accounting for symbolic meanings which enhance consumers statue and self worth (Palumbo and Herbig, 2000), thus consumers choose brands projecting congruent images with their own actual, ideal, social, and ideal social images (Sirgy, 1985) By using a particular product, consumer’s self-image is expressed and viewed by other individuals Kapferer and Laurent (1985) argued that the interest of producers in their selling procedure is image management of product to create the link to consumer’s image In this situation, image management is

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creating regular relationships to potential customers so that they can feel the link between the company’s image and their own images This is also a method to support self-image and self-respect of consumers

In the CIP scale, developed by Kapferer and Laurent (1985), the sign or symbolic value of the product is the degree to which it expresses the person’s self, and

by using a particular product, consumer’s self-image is expressed and viewed by other individuals (i.e., people often purchase a good or leisure service because they want to belong or differentiate themselves from others and often is intended to generate favorable perceptions among other people) (Havitz & Dimanche, 1990)

Kristensen, Martensen and Gronholdt (1999) notified that sign is an important aspect in explaining the product involvement, because involvement originates from social psychology and the notion of “ego involvement,” which refers to the relationship between an individual and an issue or object Douglas, in his research about how product involvement affects brand loyalty (2006), synthetized that involvement

“Reflects the extent of personal relevance of the decision to the individual in terms of his basic values, goals and self-concept.”

2.4 Relationship between Product Involvement and Brand Loyalty

The link between product involvement and brand loyalty is found to involve different aspects of involvement for each of the products concerned explains Quester and Lim (2003) in an empirical examination In their research, Quester and Lim take the view that product involvement and brand loyalty are positively related and that high product involvement precedes the development of brand loyalty More specifically, they mention that consumers who are more involved with a particular brand are also more committed and hence more loyal to that brand and suggested that high involvement as a precondition to loyalty Yi-Youjae and Hoseong (2003) confirmed that customer loyalty was highly affected by involvement when organized a research to find out the moderating role of involvement on loyalty program

The relationship between loyalty and product involvement is that consumers who are more involved with a particular brand, are more committed and hence, more loyal to that brand (Traylor 1981 and 1983) High involvement has also been suggested

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as a precondition to loyalty (Assael 1987) Indeed, Assael argues that the cognitive definition of brand loyalty represents commitment and therefore, involvement with the brand

According to Traylor (1981 and 1983), one’s involvement in a product class is directly related to one’s commitment (or loyalty) to a brand within that product class

It is argued that the more focal a product class is to an individual’s ego or sense of identity, the stronger the psychological attachment to a particular brand within that product class Conversely, the more peripheral the product class is to the individual’s ego, the lower the attachment to the brand Traylor’s reasons are that for a low-involvement type product category, the consumer would have a large consideration set and therefore, brand commitment would be low Hence, brand switching would be a more frequent behavior rather than for another consumer to whom this product is more highly involving His reasoning seems to suggest that consumers with a smaller consideration set of a high-involvement type product category would have high brand commitment

Leclerc and Little (1997) confirmed that brand loyalty interacted with product involvement The authors stated that repeat purchase behavior for a high involvement product was an indicator of brand loyalty; whereas repeat purchase for a low involvement product has implied habitual purchase behavior Involvement has an impact on whether the purchase process consists of formal search and evaluation or is more habitual Low involvement purchasing tends to be habitual whereas high involvement requires planning Therefore, if the purchase employs high involvement,

it is expected that there will be more complex conscious engagement in cognitive activity (Bloch, 1981; East, 1997)

Iwasaki and Havitz (1998) argued that highly loyal people tended to exhibit high levels of involvement and those individual and social situational factors such as personal values or beliefs, social and cultural norms, influenced the behavioral loyalty Brink et al (2006) found out that to what extent consumers revealed an effect of strategic and tactical cause related marketing efforts on brand loyalty with regards to product involvement Secondly they sought to access the moderating role of consumer

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involvement with a product on the relationship between cause related marketing and brand loyalty They shown that consumers perceive a significantly enhanced level of brand loyalty as a result of strategic cause related marketing

Similarly, Ismail et al (2006), through their study conclude that product involvement has a significant influence on brand loyalty The reason may be that the more the consumers will have involvement with a product the more they will be inclined towards that product and will feel comfortable to use that brand All the factors

of product involvement have also significant impact on brand loyalty which means that brand loyalty is significantly influenced by product involvement in all respects 2.5 Research Hypotheses

The literature takes the view that product involvement and brand loyalty are positively related and that high product involvement precedes the development of brand loyalty Studies examining the relationship between product involvement and brand loyalty have tended to treat product involvement in a dichotomous manner In this study, researcher will test the relationship between product involvement and cell phone users’ brand loyalty through five particular factors of product involvement: Product attributes perception, Product knowledge, Country of origin perception, Pleasure and Self-image expression

Kotler and Armstrong (2005) said that consumers regard product as the combination of product attributes which are capable to satisfy their interests or requirements Once customer’s needs toward a product are satisfied through its attributes, they will easily favor in it, which leads to their product’s brand loyalty Even

in some situations, product attributes influence loyalty more than brands (Jarvis and Goodman, 2005) Based on these theories, the first hypothesis in this research is:

H1: The better product attributes cell phone users perceive, the more they are loyal to their cell phone’s brand

Many previous research has found the relationship between product knowledge and consumer behaviours, such as: consumer purchase intention (Lin & Chen, 2006;

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Hanzaee & Khosrozadeh, 2011), quality of purchase decision (Han, 2008), or mouth behavior (Sohn and Leckenby, 2005)… Han (2008), in his study on consumer loyalty in cosmetics industry, indicated that product knowledge has an indirect influence to brand loyalty For further research, this research let the hypothesis assuming that product knowledge has a direct impact on brand loyalty Hence, the second hypothesis is:

word-of-H2: The more product knowledge cell phone users perceive, the more they are loyal to their cell phone’s brand

Many studies has proved that consumers’ perception in country of origin affects their loyalty towards the brands originating from the country For example, Kim (1995) suggested that favorable country image could lead to brand popularity and hence to consumer loyalty Shahin et al (2012) proved that brand’s country of origin of a product has the greatest effect on brand loyalty among four factors of brand equity (perceived quality, brand loyalty, brand awareness and brand associations) A plausible explanation for this expected relationship is that brands originated from countries with good images are farmiliar to consumers and products of these brands are usually perceived as high quality products, hence, consumers keep good and favorable associations from these brands Finally good perceptions about the quality, familiarity for consumers and good associations of these brands could lead to consumers’ loyalty

to brands which originated from countries with good image Based on that, the third hypothesis is:

H3: The better product’s country of origin cell phone users perceive, the more they are loyal to their cell phone’s brand

There are many studies proving that pleasure of users affects on their loyalty toward a brand However, the influence levels of product knowledge to brand loyalty

in different studies are not the same because of the differentiation in studied products

or weak effect on brand loyalty of cell phone users in Ho Chi Minh City, and whether they can be mergerd with any other factors in the research model, researcher sets the fourth hypothesis as follows:

H4: The more cell phone users are pleased in their cell phone, the more they are loyal to its brand

Pettigrew (2002) certainly maintains that sign is one such variable showing a close affinity with hedonistic, pleasure oriented behavior Essientally this leads to a subconscious, subjective, emotional connection with a certain brand that consumers may identify due to expectations and understandings of peer groups to which they belong This behavior may be post rationalized with logical and utilitarian reasoning (Douglas, 2006) Also in his research on how product involvement affects brand loyalty, Douglas found that “Sign” (Self-image expression) is the factor which has the strongest impact on brand loyalty, compared to other factors in CIP scale Many other studies (Quester & Lim, 2003; Ismail, 2006; Hanzaee et al., 2011; Sadasivan et al., 2011) also concluded that self-image expression is positively related to brand loyalty

To test whether it is right for Ho Chi Minh cell phone users, researcher assumes the fifth hypothesis as:

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H5: The more self-images cell phone users can express, the more they are loyal

to their cell phone’s brand

2.6 Conceptual Framework

Based on concepts and theories in chapter II, combined with the reference from previous research models such as model of Thimangu (2006), model of Quester and Lim (2003), Douglas (2006)…, some factors of product involvement are chosen to take into the conceptual framework of this research as illustrated in Figure 1 This framework consists of two kinds of variable: independent variable and dependent variable Independent variables in this study are 5 factors of product involvement:

“Product attributes perception”, “Product knowledge”, “Country of origin perception”,

“Pleasure”, “Self-image expression”; and the dependent variable is “Brand loyalty”