The effects of marketing communication on brand equity luận văn thạc sĩ

Table 3.4: Measurement scales for perceived quality………..20 Table 3.5: Measurement scales for brand loyalty………20 Table 3.6: Measurement scales for attitudes toward advertising spending………

ABSTRACT……… 2

CHAPTER 1 BACKGROUND……….3

1.1 Introduction………3

1.2 Research Objectives……… 4

1.3 Research methodology and scope……… 4

1.4 Managerial implications………5

1.5 Structure of the research report……… 5

CHAPTER 2 LITERATURE REVIEW AND RESEARCH MODEL….7 2.1 Introduction………7

2.2 Brand equity………7

2.2.1 Brand awareness……… 7

2.2.2 Perceived quality……… 8

2.2.3 Brand loyalty………8

2.2.4 Brand Association………8

2.3 The elements of marketing communication………9

2.3.1 Advertising Spending……….10

2.3.2 Field Support Activities……….11

2.3.3 Sales Promotion……….11

2.4 Research Model……….12

3.1 Introduction……… 15

3.2 Research design………15

3.2.1 Research methodology……… 15

3.2.2 Research process………17

3.2.3 Questionnaire Structure……… 18

3.3 Measurement scale development……… 19

3.3.1 Measurements of brand awareness………19

3.3.2 Measurements of perceived quality……… 20

3.3.3 Measurements of brand loyalty……….20

3.3.4 Measurements of attitudes toward advertising spending………… 21

3.3.5 Measurements of attitudes toward field support activities……… 21

3.3.6 Measurements of attitudes toward sales promotion……… 22

3.4 Field work……….23

3.4.1 Researched brands……….23

3.4.2 Sample……… 23

3.5 Summary……… 24

CHAPTER 4 RESEARCH RESULTS……… 28

4.1 Introduction……… 28

4.4 Exploratory factor analysis (EFA)………31

4.5 Examination research model by multiple regression………36

4.5.1 Examination the effects of advertising spending, field support activities and sales promotion on brand awareness……….36

4.5.2 Examination the effects of advertising spending, field support activities and sales promotion on perceived quality………37

4.5.3 Examination the effects of advertising spending, filed support activities and sales promotion on brand loyalty……… 39

4.6 Summary……… 41

CHAPTER 5 DISCUSSION AND CONCLUSION……… 43

5.1 Introduction……… 43

5.2 Marketing communication elements and building brand equity………….43

5.3 Limitation and future research……….45

REFERENCES ……….46

APPENDIX TABLE Table 2.1: Structural model – Relationship between some key elements of marketing communication and brand equity………13

Table 3.1: Research progression……… 16

Table 3.4: Measurement scales for perceived quality……… 20

Table 3.5: Measurement scales for brand loyalty………20

Table 3.6: Measurement scales for attitudes toward advertising spending……….21

Table 3.7: Measurement scales for attitudes toward field support activities…… 22

Table 3.8: Measurement scales for attitudes toward sales promotion……… 22

Table 4.1: Sample Characteristics………28

Table 4.2: Cronbach’s Alpha coefficient for the used measurement scales……….30

Table 4.3: Total Variance Explained – elements of marketing communication… 32

Table 4.4: Rotated Component Matrix(a) – elements of marketing communication……….33

Table 4.5: Total Variance Explained – elements of brand equity………33

Table 4.6: Rotated Component Matrix(a) – elements of brand equity……….34

Table 4.7: New Variables Computed……… 35

Table 4.8: Model Summary – Marketing Communication and Brand Awareness………37

Table 4.9: ANOVA (b) – Marketing Communication and Brand Awareness……37

Table 4.10: Coefficients (a) – Marketing Communication and Brand Awareness………37

Table 4.11: Model Summary – Marketing Communication and Perceived Quality……… 39

Quality……… 39

Table 4.14: Model Summary – Marketing Communication and Brand Loyalty……… 41

Table 4.15: ANOVA (b) – Marketing Communication and Brand Loyalty………41

Table 4.16: Coefficients (a) – Marketing Communication and Brand Loyalty……… 41

Table 4.17: Hypothesis and research results………42

ACKNOWLEDGMENTS

The author would like to thank Dr Tran Ha Minh Quan for his instructions and valuable comments during the research I also would like to thank Mr Dang Huu Phuc who gave meaningful advice for processing data

ABSTRACT

The objective of this paper is to investigate the relationship between selected elements of marketing communication and brand equity of in the body lotion category The selected set includes three key elements from each of marketing factors They are advertising spending, field support activities and sales promotion from communication Plus, awareness, perceived quality and brand loyalty are from brand equity With the concrete measurement, the study surveys body lotion users

in HCMC The results show that to selected component of brand equity of body lotion category, advertising spending and field support activities response a positive side, whereas sales promotion have a negative impact

These findings provide insights for doing strategy of marketing communication activities generating and managing brand equity

CHAPTER 1 BACKGROUND

Brand equity is very important as it is a source of sustainable competitive advantages of a brand The brand owning strong equity increases a chance for the brand to be selected, purchased more frequently and so the loyalty to the brand is higher, Pitta and Katsanis (1995)

Moreover, brand equity has strong relationship with marketing communication From various study, importance of brand equity are witnessed

According to Rajh 2005, brand equity is very important because it has many benefits for companies Bharadwaj et al., (1993) and Hoffman (2000) find that brand equity could be considered as a source of sustainable competitive advantage while Pitta and Katsanis (1995) discover that there is the positive relationship between brand equity and brand loyalty It means that the brand owning strong equity increases a chance for the brand to be selected, purchased more frequently and so the loyalty to the brand is higher Aaker and Keller (1990) also find other benefits related to brand extension such as strong brand equity of the brand enhances possibility of brand extension to other product categories It allows companies to use established brand name to drive consumers to enter new product categories

In relation to marketing mix, various studies (Barwise, 1993; Farquhar et al., 1991; Keller, 1993; Keller, 1998; Pitta and Katsanis, 1995; Simon and Sullivan, 1993; Smith and Park, 1992; Yoo et al., 2000) find that brand equity is one of the sources

to increase efficiency of marketing communication programs Brand equity also increases willingness of consumers to pay premium price for a specific brand Brand equity also impact elasticity of consumers to price change More precisely, brand equity increases elasticity of consumers to price reductions and decreases elasticity of consumers to price increases Brand equity has positive relationship

with willingness of stores (distribution channel) to collaborate and provide support for the brand Brand equity reduces the company vulnerability to marketing activities of the competition and their vulnerability to crises

Although of understanding importance of brand equity, managers have not invested

in creation brand equity properly in the body lotion category which is growing in Vietnam market.Top two giant advertisers Unilever and Beiersdorf are competing

in advertising spending, sales promotion, etc However, they have not hadany research to investigate the relationship between elements of marketing communication and brand equity for this category In the last two years, the managers have frequently used sales promotion to improve their sales performance

in the short-term They may ignore to analysis whether sales promotion can deteriorate brand equity in the long-term In addition, they don’t have clear communication strategy to enhance brand equity Therefore, it’s necessary to explore the relationship between elements of marketing communication and dimensions of brand equity

1.2 Research objectives

The purpose of this research is to explore impacts of factors of marketing communication on brand equity’s elements This has been one of hottest topics in management today in Vietnam emerging market where building brand equity plays

an important role for giant advertisers’ communication strategy.The research also provides a starting point for further research on relationship between marketing mix and brand equity

The research is conducted in the dynamic market, HCMC in which there is the biggest sales contribution, up to 80% of sales on each key brand (Source AC Nielsen Market Retail Audit 2010)

Key brands are defined as brands with satisfying one of following criteria:

 The brand is the market leading in the body lotion category or

 The brands have long heritage in Vietnam market and have influence on the market or

 The brand have been active in marketing activities like adverting, promotion, etc or

 The brands that have high chance of consideration when making buying decision

This study is conducted by two steps: (1) qualitative study and (2) quantitative study

Qualitative study is conducted through analyzing secondary data and in-depth interview with some current users and brand managers in cosmetic companies This step helps to (1) confirm key drivers of marketing communications (2) adjust and fine tune the measurement scales

Quantitative study is conducted through face-to-face interview at consumers’ houses The second step p is to (1) re-confirm the components and the measurement scales and (2) test the research model Cronbach’s alpha, Exploratory Factor Analysis (EFA) and multiple regression methods are used to analyze collected data

in this step

Findings of the research will help managers have in-depth understanding about elements of marketing communication and role of each element to increase or decrease brand equity of the body lotion market Hence, brand managers can design effective marketing communication strategy

1.5 Structure of the research report

This paper comprises five chapters Chapter 1 introduces the background of the study Chapter 2 presents the literature review on brand, brand equity and the research model and hypotheses Chapter 3 explains research methodology and measurement scales Chapter 4 presents data analysis process and results of the study Chapter 5 summarizes the key findings, discussion, managerial implications, limitations of the research and recommendations for future research

CHAPTER 2 LITERATURE REVIEW AND RESEARCH MODEL

This chapter reviews literature to establish a theoretical framework for the research The concept of brand equity and common elements of marketing communication are presented in the part The research model is developed to investigate the relationship between elements of marketing communication and factors of brand equity Hence, it helps marketing managers to design marketing strategies more effectively

Brand equity is defined as a set of assets and liabilities linked to the brand, which add value to or subtract value from a product in its relationship with customers According to the proposal formulated by Aaker (1991, 1996) brand equity is a multidimensional concept It comprises of perceived quality, brand awareness, brand loyalty, brand associations, and other proprietary assets Other researchers also share these dimensions as Aaker For example, Shocker and Weitz (1998) suggest brand loyalty and brand association, Keller (1993) recommends brand knowledge, including brand awareness and brand image And Lasscar et al., (1995) suggest five elements of brand equity (1) perceived quality, (2) perceived value, (3) brand image, (4) trustworthiness, and (5) commitment to the brand

2.2.1 Brand awareness

It relates to the strength of the brand node or trace in memory, as reflected by consumer’s ability to identify the brand under different conditions (Rossiter and Percy 1987) Brand awareness includes brand recognition and brand recall performance Brand recognition requires that consumers correctly discriminate the brand as having been seen or heard previously Brand recall requires that consumers correctly generate the brand from the memory

2.2.2 Perceived Quality

Zeithaml (1988) defines perceived quality as “the consumer’s [subjective] judgment about a product’s overall excellence or superiority” (p.3) These judgments may be influenced by personal product experiences, unique needs and consumption situations High perceived quality indicates that consumers recognize the differentiation and superiority of the brand through the long-term experience related to the brand Zeithaml also identifies perceived quality as a component of brand value; hence, high perceived quality would drive a consumer to choose the brand rather than other competing brands Therefore, to the degree that brand quality is perceived by consumers, brand equity will increase

2.2.3 Brand Loyalty

Oliver (1997) defines brand loyalty as “a deep held commitment to rebuy or repatronize a preferred product or service consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behavior” (p.392) Brand loyalty makes consumers purchase a brand routinely and resist switching to another brand Therefore, to extend that consumers are loyal to the brand, brand equity will increase

2.2.4 Brand Association

Aaker (1991) defines brand associations as “anything linked in memory to a brand” and brand image as “a set of [brand] associations, usually in some meaningful way” (p.109) Brand association which result in high brand awareness, are positively related to brand equity because they can be a signal of quality and commitment and they help a consumer consider a brand at the point of purchase, which leads to favorable behavior for the brand

Considering Vietnamese consumers behaviors with female target group – in comparison with consumer market, the body lotion brands have high level of

branding, similar buying process and consumption of product With all those reasons mentioned, we recognize three common components of brand equity: (1) brand awareness, (2) perceived quality and (3) brand loyalty High brand equity can help to explain that consumers can know about the brand, recognize the brand from other brands perceive high quality and loyal to the brand in the body lotion category

In theresearch scope, this study will not investigate how each component of brand equity increase brand equity Yoo et al (2000) and other researchers find that brand name, brand loyalty, perceived quality, and brand awareness/associations are positively related to brand equity

Many researchers suggest that brand equity is a strategic aspect of marketing management and can be created, maintained and intensified by strengthening on of

it components (Leuthesser, 1998, Farquhar, 1989, Nomem, 1996) Elements of marketing communication have impact on brand equity

This study focuses on exploring how marketing communication increase or decrease brand equity Hence, the following part of this chapter concentrates on theoretical framework on marketing communication

Learning from previous qualitative researches in Beierdoft company, there are three main key components of the marketing communication which have frequently been used by almost big cosmetic companies in Vietnam in order to build brand equity: (1) advertising spending; (2) field support activities; and (3) sales promotion Therefore, this research concentrates on these elements Although these variables

do not cover the full marketing activities of cosmetic companies in Vietnam they represent the most often used marketing actions Thus, it’s enough to express relationship between factors of marketing communication and elements of brand equity Knowing how certain marketing activities increase or decrease brand equity

will enable marketing managers to develop effective marketing program Managers need to promote brand-building activities and decrease or avoid brand-hurting activities (Yoo et al., 2000)

2.3.1 Advertising Spending

Advertising by definition is any paid form of non-personal communication of ideas

or products on both traditional media (TV, Press, Radio, Cinema, Out-of-home) and non-traditional media (Internet) Jobber (2001) and some studies (Maxwell, Chay and Tellis, Simon and Sullivan, Boulding et al.) indicates that advertising spending is good for building brand awareness because it can aim at a mass audience quickly, repetition of advertising means that a brand positioning concept can be effectively communicated, advertising also can be used to aid the sales effort through legitimizing a company and its products, however, advertising is impersonal and has limited capability to close the sale

The positive effect of advertising spending on brand equity was found in the research of Simon and Sullvian (1993) The dollar amount spent on advertising has positive effects on brand equity and its components (Cobb-Walgren et al., 1995)

In Vietnam market, two giant companies Unilever Vietnam and P &G have heavily invested in advertising spending in the past ten years.Thousands of million USD has been poured into advertising to build up their brands in the emerging market (Source Kantar Media, 2010) This also proves that advertising spending is one of key drivers of building up brand equity effectively in Vietnam

Yoo et al (2000) find the positive relationship between advertising spending and brand loyalty Shimp (1997) find that the advertising spending positively related to brand loyalty because it reinforces brand-related associations and attitudes toward the brand Therefore,

 H1: Advertising spending positively affects brand awareness

 H2: Advertising spending positively affects brand loyalty

H3: Advertising spending positively affects perceived quality of the brand 2.3.2 Field support activities

Field support activities are efforts to provide face-to-face technical supports to consumers by cosmetic firms through market visit, meeting scheme, with the intention of making a sale Since these activities are personal contacts, question can

be answered and objective overcome, relationships can be built because of its personal nature This two-way communication will help sales forces to identify consumers on premises and design better messages in communication Sales materials can help sales persons to explain about products of benefits and create atmosphere at shops effectively Hence, they also contribute to create brand awareness and raise the perceived quality, and finally consumers could apply the product properly to get good result and become loyal to the brand Thus, we can assume that field support activities have a good impact on aspects of brand equity Therefore,

 H4: Field support activities conducted for the brand positively affects brand awareness

 H5: Field support activities conducted for the brand positively affects brand loyalty

 H6: Field support activities conducted for the brand positively affects perceived quality of the brand

counteracted by competitors (Aaker, 1991) Regular sales promotion would communicate low-quality brand image in the long term Furthermore, Shimp, 1997 believe that sales promotion do not prolong enough to generate brand association in the long-term comparing with other efforts In addition, consumers may confuse about the correct price The gap between expected and observed prices may question about the brand quality The consumers can perceive brands as poor quality This may unfavorably influence on consumer brand choice decisions Also, sales promotion may cause switching brands among users because they are appealed by the benefits provided by sales promotion When the sales promotion ends, they will lose interests in the brand and switch another brand Yoo et al (2000) suggest that manager should focus on advertising spending to develop brand equity instead of offering price promotion.The following hypotheses are proposed: establish

 H7: Sales promotion negatively affects brand awareness

 H8: Sales promotion negatively affects brand loyalty

 H9: Sales promotion negatively affects perceived quality of the brand

The main goal of the research is to explore the relationship between some key elements of the marketing communication and the components of brand equity The above literature review indicates the direct relationship between marketing communication efforts and brand equity The elements of marketing communication and components of brand equity are grouped separately The simplified research model is summarized in Table 2.1

Table 2.1: Structural model – Relationship between some key elements of

marketing communication and brand equity

This chapter goes through the literature review for both the concept of brand equity and key elements of marketing communication Three common components of brand equity: (1) brand awareness, (2) perceived quality and (3) brand loyalty are identified Three key elements of marketing communication are (1) advertising spending, (2) Field support activities and (3) sales promotion The structural model

is also defined by which the relationship between key elements of marketing communication and common components of brand equity are explained This

H9(-) H6(+)

H5(+) H2(+)

H7(-) H4(+)

H1(+)

H3(+) H8(-)

Brand Equity Brand

Loyalty

Perceived Quality

Brand Awareness

chapter also discusses on how each selected element of marketing communication potentially affect each common component of brand equity, through that the relationships are hypothesized.The next chapter presents the research method used

CHAPTER 3 RESEARCH METHODOLOGY

The purpose of this chapter is to explain the research methodology which was used

to develop scales for measuring researched concepts and examine the hypotheses This chapter introduces (1) research design, (2) Measurement scale development, and (3) field work

3.2.1 Research methodology

This study was conducted through two steps: (1) qualitative study and (2) quantitative study Quantitative study was conducted through analyzing secondary data and in-depth interview with regular consumers and brand managers The purpose of this step is to (1) confirm the key elements of marketing communication (2) adjust and fine tune the measurement scales This step is conducted in Mar- May in HCM City The procedure for qualitative research is: (1) Personal contact was made firstly through telephone calls and emails (2) After having the acceptance from them, the interview was conducted in an open-ended questions, thus the interviewees can answer as much as they can (3) After the interview, emails or informal meeting were often used for solving unclear information which was collected during the interview Besides, brand managers are interviewed to obtain more useful information Quantitative study is conducted using face-to-face interview technique at consumers’ houses in Jun - Aug in HCM city Cronbach’s alpha, Exploratory Factor Analysis (EFA) and multiple regression methods were used to analyze data collected in this step The research progression is showed in Table 3.1

Table 3.1: Research progression

2 Quantitative Face-to-face interview Jun-Aug 2011 HCM City

3.2.2 Research process

The process of this study is structured in Table 3.2

Table 3.2: Research process

Literature review and

conceptual framework

Draft measurement scales

In-depth interviews Finalize

Test convergent and discriminate validity Eliminate variables that have low EFA loadings Check eigen values and extraction Sums of Squared Loadings

Test the effects of key elements of marketing communication on brand equity Test

hypotheses Check the fitness of the multiple regression equation (r2) Test of the

significance level of r2 using F-test Test of the significance level of each regression

coefficient using t-test

Cronbach’s alpha To measure reliability coefficient for the items of each

component, Cronbach’s alpha was calculated When reliability coefficient achieved 70, the cut-off level of reliability recommended for theory testing research (Nanullyand Bernstein, 1994) According to Yoo et al (2000), because of parsimony purpose, the item that did not contribute to the reliability significantly was eliminated

Exploratory Factor Analysis (EFA) EFA is the common name of group of

procedures mainly used to reduce and recap data EFA is a complex, multi-step process Fabrigar et al., (1999) recommend using principle component analysis if the purpose of this analysis is to reduce the information in many variables into a set

of weighted linear combinations of those variables Basically, the extraction of principal components amounts to a variance maximizing (varimax) rotation of the original variable space This type of rotation is called variance maximizing as the criterion for the rotation is to maximize the variance (variability) of the “new” variable while minimizing the variance around the new variable (Advanced statistical analysis using SPSS, SPSS inc., 2000) Based on these theories, exploratory factor analysis was conducted by using varimax rotation technique with principle component analysis extraction method

The objective of using EFA is to test convergent and discriminate validity and eliminate variables that have low EFA loadings Eigen values and extraction sums

of squared loading must be checked for EFA According to Kaiser (1960), we should retain only components with eigenvalues greater than 1

Multiple Regression Multiple regression was used to test hypotheses in the

research model We check the fitness of the multiple regression equation(r2), test of the significance level of r2 using F-test, test of the significance level of each

regression coefficient using t-test

3.2.3 Questionnaire Structure:

Questionnaire is divided four parts including scanning respondents, measure elements of marketing communication which are advertising spending, field support activities and sales promotion, measure dimensions of brand equity defined

as brand awareness, perceived quality and brand loyalty and respondent’s demographic information

The set of measurement scales were developed based on (1) the literature review in Chapter 2, and (2) recommendations from other authors (Yoo et al., 2000; Martin, 2000) All items were measured on 5-points Linkert-type scales, with anchors of 1

= strongly disagree and 5 = strongly agree The first set of measurement scales (draft measurement scales) was developed and taken to in-depth interviews

Measurement scales are adjusted based on the consumer market and the body lotion market Based on in-depth interviews with regular consumers and brand managers

in cosmetic companies, the draft measurement scales are adjusted and fine-tuned to final measurement scale The following part of this paper is to explain in more details about the final measurement scales developed

3.3.1 Measurements of brand awareness

The brand awareness (BA) will be measured by four observed variables (BA1 to BA4) which are the four factors contribute to the awareness of the brand The full list of variables used in this research for brand awareness can be found in Table 3.3

Table 3.3: Measurement scales for brand awareness

BA1 I am aware of X

BA2 I can recognize X among other competing brands

BA3 I can easily distinguish X from other body lotion brands

BA4 The characteristics of X can come to me very quickly

3.3.2 Measurements of perceived quality

Perceived quality by definition is the consumer’s subjective judgment about the product’s excellence or superior (Zeithaml, 1998) Yoo et al (2000) recommend that we measure consumer’s subjective judgment about a brand’s overall excellent

or superior and address overall quality rather than individual elements of quality

Measurement scales for perceived quality are adjusted and fine-tuned to five observation variables (PQ1 to PQ5) The full list of variables used in this research for perceived quality can be found in Table 3.4

Table 3.4: Measurement scales for perceived quality

PQ1 X provides high efficacy in the body lotion category

PQ2 X helps my skinsmooth and whiten

PQ3 X helps to protect my skin

PQ4 X is very easy to apply for my skin

PQ5 Packaging of X looks very attractive

3.3.3 Measurements of brand loyalty

Brand loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or service consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behavior (Oliver, 1997) Three observed variables recommended by Yoo et al (2000) are used to measure perceived quality (BL1, BL3 and BL6) However, the results from qualitative study suggest three more observed variables (BL2, BL4 and BL5) The full list of variables used in this research for brand loyalty can be found in Table 3.5

Table 3.5: Measurement scales for brand loyalty

BL1 X is my first choice

BL2 I will definitely use X again

BL3 I will not buy other body lotion brands if X is available at the store

BL4 If X is not available at the store I will go to another store to find

BL5 I will recommend X to others

BL6 I think I am a loyal consumer of X

3.3.4 Measurements of attitudes toward advertising spending

Consider the recommendation from Yoo et al., (2000) by that (1) it was not feasible

to control actual marketing efforts in the study, and (2) perceived marketing efforts play a more direct role in the consumer psychology than actual marketing efforts

We examine the perceived rather than actual elements of marketing, thus in this study we will examine the attitudes of consumers toward advertising spending, field support activities, and sales promotion of body lotion brands

The full list of measurement scales used in this research for advertising can be found in Table 3.6

Table 3.6: Measurement scales for attitudes toward advertising spending

AD1 In general, I think advertising spending of X are very appeal for me

AD2 I mainly know about X through seeing advertisements

AD3 In general, I like the advertisements of X brand

AD4 In general, the advertising spending campaigns for X brand make me think

that X is a high quality product

AD5 I think X brand is intensively advertised, compared to other brands in the

category

3.3.5 Measurements of attitudes toward field support activities

Very similar scales to that used to measure the effects of advertising, the attitudes

of consumer toward field support activities are also measured by five indicators (from FS1 to FS5) The full list of measurement scales used in this research for field support activity can be found in Table 3.7

Table 3.7: Measurement scales for attitudes toward field support activities

FS1 In general, I think field support activities of X is very good

FS2 I mainly know about X through field support activities

FS3 In general, I like the field support activities X brand

FS4 In general, field support activity for X brand makes me think that X is a high quality product

FS5 I think X brand is intensively provided field support activities, compared to other brands in the category

3.3.6 Measurements of attitudes toward sales promotion

Very similar scales to that used to measure the effects of advertising, the attitudes

of consumer toward sales promotion are also measured by five indicators (from SP1 to SP5) The full list of measurement scales used in this research for sales promotion can be found in Table 3.8

Table 3.8: Measurement scales for attitudes toward sales promotion

SP1 In general, I think sales promotion of X is very interesting

SP2 I mainly know about X through sales promotion

SP3 In general, I like to join sales promotion campaigns of X brand

SP4 In general, sales promotions for X brand make me think that X is a high quality product

SP5 I think sales promotion for X brand is more often than other brands in the category

3.4 Field work

3.4.1 Researched brands

As mentioned in Chapter 1, selected brands must meet one of requirements: (1) the brands is the marketing leading in the body lotion category or (2) the brands have the long heritage in Vietnam market and have influence on the market or (3) the brands have been active in marketing activities like advertising spending, promotion or (4) the brands that have high chance of consideration when making buying decision Based on qualitative research, there are 3 brands matching these criteria: Nivea, Hazeline, Vaseline These brands represent near 90% of market shares in the body lotion market (Source AC Nielsen Market Retail Audit, 2010)

3.4.2 Sample

Simple random method is used in the fieldwork As mentioned previously, exploratory factor analysis (EFA) and multiple regression methods are used to analyze data Factor analysis is based on the correlation matrix of the variables involved, and correlations usually need a large sample size before they stabilize But the question is that “how large is large?” A general rule of thumb is that we should have at least 50 observations and at least 5 times as many observations as variables Researchers have also given guidelines for the minimum sample size needed to conduct factor analysis Some have suggested the ratio of sample size to number of variables as criteria: the recommendations range from 2:1 through 20:1 Others have suggested a minimum sample size of 100 to 200 observations (Guadagnoli and Velicer 1988) Guadagnoli and Velicer (1988) found that absolute sample size was more important than functions of sample size in determining stable solutions There are thirty observed variables, thus sample size should be at least n

= 30 * 5 = 150 Tabachnik and Fidell (1989) suggest the equation to calculate the sample size for multiple regression models The equation is N>= 50 + 8m (m: the