The effect of some marketing mix elements on brand awareness and brank image

1.5 Research Ojective The aim of this paper is to find out the effect of the marketing effort, measured by means of the perceptions of the consumers, on two dimensions of brand equity:

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DIỆP THỊ PHƯƠNG THẢO

THE EFFECT SOME MARKETING MIX ELEMENTS ON BRAND

AWARENESS AND BRANK IMAGE

MAJOR: BUSINESS ADMINISTRATION

MAJOR CODE: 60.34.05

MASTER THESIS INSTRUCTOR: DR TRAN HA MINH QUAN

Ho Chi Minh City – 2011

ACKNOWLEDGEMENT

This thesis is dedicated to my family, friends, professors and classmates for their support and encouragement throughout my academic career Recently, these people have touched my life in many different ways

First and foremost, I would like to give special thanks to Dr Tran Ha Minh Quan for being an excellent professor, advisor, thesis committee chair, and mentor I appreciate all the insight and time he put into helping me with my thesis I am also grateful to him for teaching me the basics, and advancing my knowledge and expertise I’d like to thank Dang Huu Phuc, who helped me in the data analysis

Many thanks my professors and classmates in MBA class, Batch 17 for their

valuable and enthusiastic support for this research study

My special gratitude is extended to all instructors, staff and students at Faculty of Business Administration, University of Technology HoChiMinh City

(HUTECH) for their support and the valuable knowledge during my study

Last but not least, the deepest and most sincere gratitude go to my beloved

parents, my husband, my daughter and my closest friends for their boundless support, abundant love and encouragement throughout my period of study

I,therefore, dedicate this work as a gift to them all

ABSTRACT

The marketing effort orientated to towards strengthening the brand means to

increase the degree of knowledge of the brand name In this paper we want to show the relationship between marketing effort and brand awareness and brand image Starting out from a theoretical review, we set out a model of effects of the

marketing effort -as the brand's antecedents- on brand awareness and

brand image In order to test the defined structural model and research hypotheses empirical research was conducted on the sample of undergraduate students of the Faculty of Business Administration in University of Techonology

The structural model of the effects of marketing mix elements on brand equity is defined in line with the existing theoretical findings Research hypotheses are defined according to the identified structural model Research results indicate that the structural model has an acceptable level of fit to the empirical data The

estimated structural coefficients and indirect effect coefficients indicate the

direction and intensity of effects of each analysed element of marketing mix on brand awareness and brand image Finally, implications of research results for the theory and practice of brand management are analysed and discussed

KEY WORDS: Brand Image, Brand Awareness, marketing effort, Measurement Model

TABLE OF CONTENTS

ACKNOWLEDGEMENT I

ABSTRACT II

TABLE OF CONTENTS III

LIST OF FIGURES V

LIST OF TABLES VI

1 Chapter1 : Introduction 1

1.1 Introduction 1

1.2 Research Background 1

1.3 Research Motives 3

1.4 Problem statement 4

1.5 Research Ojective 4

1.6 Research methodology and design 5

1.7 Research Procedure 6

2 Chapter 2 : Literature review 7

2.1 Introduction 7

2.2 Brand 7

2.2.1 Brand Awareness 9

2.2.2 Brand image 11

2.3 Marketing efforts 13

2.3.1 Advertising 13

2.3.2 Distribution intensity 14

2.3.3 Store image 15

2.3.4 Price deals 16

2.4 Relationship between marketing effort and brand awareness

and brand image 17

2.5 Conclusion 21

3 Chapter 3 : Methodology 22

3.1 Introduction 22

3.2 Research design 23

3.3 Item generation 25

3.3.1 Introduction 25

3.3.2 Operationalization of measures 25

3.4 Preliminary study 29

3.5 Main survey 32

3.5.1 Brand selection 32

3.5.2 Sampling 32

3.6 Conclusion 33

4 Chapter 4 : Research results 34

4.1 Introduction 34

4.2 Descriptions of sample 34

4.3 Scales assessment 36

4.3.1 Reliability testing 36

4.3.2 Exploratory factor analysis 38

4.4 Testing the research model and the hypotheses 42

4.4.1 Testing correlations between all constructs 42

4.4.2 Testing research model 42

4.4.2.1 The relationship between marketing efforts and the brand awareness.42 4.4.2.2 The relationship between marketing efforts and the brand image 46

4.5 Testing the effect of brand awareness and brand image on the year in college: 49 4.6 Findings and conclusion 51

4.6.1 Findings 51

4.6.2 Conclusion 51

5 Chapter 5 : Conclusions and implications 53

5.1 Introduction 53

5.2 Conclusions of the study 53

5.2.1 Summary of all hypotheses 53

5.2.2 Conclusions of the study 54

5.3 Implications of the study 57

5.4 Limitations and recommendations for further research 58

List of References 60

Appendix 1 – Questionnaire (Vietnamese version) 63

Appendix 2 - Descriptive Statistics of variables 67

LIST OF FIGURES

Figure 1-1 : Outline of chapter 1 1

Figure 1-2 : Structure of the study 6

Figure 2-1 : The structure of Chapter 2 7

Figure 2-2 : Dimensions of Brand Knowledge, Keller (1993) 9

Figure 2-3 : Model of effects of marketing efforts on brand awareness and brand image 21

Figure 3-1 : Outline of chapter 3 22

Figure 3-2 : Research process 24

Figure 4-1 : Outline of chapter 4 34

Figure 4-2 : Whether used motocycles 36

Figure 4-3 : Owning brand 36

Figure 4-4 : Relationships between perceived advertising spending, distribution intensity and the brand awareness 42

Figure 4-5 : Results of model I 45

Figure 4-6 : Relationships between marketing efforts and brand image 46

Figure 4-7 : Results of model II 48

Figure 4-8 : Adjusted the structural model of impact of marketing effort on brand awareness and brand image 52

Figure 5-1 : Outline of chapter 5 53

LIST OF TABLES

Table 3-1 : Measures of perceived advertising spending 26

Table 3-2 : Measures of distribution intensity 27

Table 3-3 : Measures of brand image 27

Table 3-4 : Measures of price deals 28

Table 3-5 : Measures of brand image 28

Table 3-6 : Measures of brand awareness 29

Table 3-7 : The final questionnaire 30

Table 4-1 : Sample characteristics 35

Table 4-2 : Reliability of the measurement instrument 37

Table 4-3 : Rotated component matrix 40

Table 4-4 : EFA result for individual measurement scales 41

Table 4-5 : The correlations among the dimensions of brand equity 43

Table 4-6 : The results of linear regression analysis_Model I 44

Table 4-7 : Summary of hypotheses testing results (Model I) 45

Table 4-8 : The results of linear regression analysis_Model II 46

Table 4-9 : Summary of hypotheses testing results (Model II) 48

Table 4-10 : Multiple Comparisons 50

Table 5-1 : Summary of hypotheses 54

1 Chapter1 : Introduction

1.1 Introduction

This chapter portrays general introduction for the current study with which research background, research motives, research objectives, and research procedures are provided as the rationale for this study An introduction to the methodology to be used and the scope of the study is also addressed in this chapter At the end of the chapter, the structure of this study is provided

The Outline of this chapter is shown in figure 1.1

Figure 1-1 : Outline of chapter 1

1.2 Research Background

Kathman (2002) described the importance of brand building based on today’s market situation The author said that as the use of new media (e.g., internet), the rate of transformation in marketplace, and the speed of globalization increase, the role of branding becomes more important than any other season Kathman added that market fragmentation, product diversity, and short-life-cycle brands also show the importance of building brand equity in the present market situation The author

concluded that brand building is the only way to thrive their business in today’s market situation The author also added that, in these days, we have many

products and brands and the market is segmented so much that make it difficult for the audience to recognize or recall the brand

Studies on branding issue receive the great attention in marketing area in other countries The growing interest is reflected in the proliferating conferences, articles, and press attention on branding, as well as the companies’ huge investments on this area Brands are powerful strategic weapons which, if handled correctly and

managed sensibly, can provide their owners with considerable rewards in terms of market share growth and corporate profitability (Aaker, 1996)

Branding has always been crucial for anyone who wants to sell something to gain credibility (Keller, 2003) Yet, the concept of a brand which represents the specifics

of a product or a company, like a name which describes the character of the person

it belongs to, is a new one in Vietnam Most Vietnamese firms are small or medium sized and have not dealt with problems related to the branding issue The media had not highlighted it until several Vietnamese brands were recently appropriated overseas (VnExpress, 2002; VET, 2003)

The severe shortage of commodities in the late 1980s and early 1990s consolidated manufacturer’s lack of awareness about branding, particularly bearing in mind the low per capita income of Vietnamese people But the mushrooming of new

producers and service suppliers and the arrival of foreign competitors has caused things to change drastically An abundance of goods and services of higher quality, advanced technologies, and shorter product life spans have forced local businesses

to think seriously about building brands which can give them long term and

sustainable development (VET, 2003) Right now, building brands is a very

important issue in developing country as Vietnam, and it can be considered to be a useful topic for conceptual development and managerial relevance

In several studies, brand awareness and image are considered the most important

components of brand equity (Keller, 1993) However, only a few studies delved into how these components are correlated with products or services

1.3 Research Motives

To date, there have been a number of studies that have attempted to examine how consumers think about, respond to, and classify brands within their minds Branding literature has provided theoretical perspectives to help marketers understand the construct of brand

Brand equity has become a hot topic for chief executives, accountants and academics as it is tipped to join other critical measures of long-term business performance At the same time, the 'knowledge economy' is becoming an accepted framework for management thinking, planning and organisation It is perhaps surprising, therefore, that the designated marketing function in so many companies has done so little to advance the management of one of their most value-adding activities - brand knowledge

Indeed, it is nearly 40 years since Theodore Levitt pointed out the unique perspective of marketing: "The difference between marketing and selling is more than semantic Selling focuses on the needs of the seller, marketing on the needs of the buyer Selling is preoccupied with the seller's need to convert the product into cash, marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering, and finally consuming it.” During those four decades, marketing departments have grown as substantially as their budgets, huge quantities of data swamp the brand teams and yet the evidence suggests they have not strengthened their grip on 'knowing and understanding' their users better Over the same period the reputation

of the marketing function has declined in many companies

1.4 Problem statement

Based on the importance of brand awareness and brand image to the company’s surviving, we manage to investigate to what extent the students know about the brand of motocyces (brand awareness) and what kinds perception of the brand of motocycles as reflected by the brand association held in target customers’

memory (brand image)

1.5 Research Ojective

The aim of this paper is to find out the effect of the marketing effort, measured by means of the perceptions of the consumers, on two dimensions of brand equity: brand awareness and brand image This paper is included within a major

investigation that seeks to develop and to contrast a model which allows the

measurement of the brand equity through: the influence of the marketing effort of the companies (measured by means of actions of prices, product, distribution and communication) on dimensions of brand equity -brand awareness and brand image The marketing effort, translated partially to (1) perceived advertising spending, (2) distribution intensity, (3) store image and (4) Price deals , is considered as (a) antecedent in the formation of the level of knowledge of the brand name (Rossiter

& Percy, 1987; Aaker, 1991) and (b) determinant of the associations linked to its image (Alba & Hutchinson, 1987; Yoo, Donthu & Lee, 2000)

From the theoretical review on brand value we construct a theoretical model of causal relationships between the marketing efforts and the dimensions of brand equity_ brand awareness and brand image This is defined as a set of assets and liabilities linked to the brand, which adds or subtracts value to or from a product in its relationships with customers (Aaker, 1991) To contrast the model, the linear regression model is applied

Following, Yoo et al (2000), we analyse how each of the components of brand equity is affected previously by the perception of the market about the marketing effort the company develops concerning brands

To verify our model we carry out an empirical research of a consumers' sample of a durable goods (motocycle) which we submitted to a questionnaire of attitudes Once its reliability and validity was determined, this questionnaire could be used for the application of the structural model

To serve this task, two questions need to be answered:

Q1:Is there a relationship between marketing effort and two dimensions of brand equity: brand awareness and brand image?

Q2: Is there any difference of brand awareness and brand image among year in college?

1.6 Research methodology and design

The study comprises two phases: The pilot study and the main survey The Pilot study includes qualitative and quantitative stages Qualitative stage was conducted

to collect the appropriate response scheme from students at University of Technology These items will be measured in the pilot quantitative study for their relevance and reliability Finally, the main survey was carried out to test the research hypotheses, answer research questions and fulfill research objectives

Cronbach alpha was used to measure the reliability of the scale, exploratory factor analysis was applied to identified correct factors and multiple linear regression was performed to test the significant relationship between each marketing elements dimension on brand awarenss and brand image

1.7 Research Procedure

The procedures of this study are shown in figure 1

Figure 1-2 : Structure of the study

Identifying Research Objectives

Collecting and Exploring Related Literature

Data Collection Questionnaire Design Establishing Research Framework

Data Analysis

Conclusions and Suggestions

2 Chapter 2 : Literature review

2.1 Introduction

The previous chapter introduces an overview of the study background, the research objective and the research motives and research procedure This chapter searches and reviews relevant theories in the literature The aim of this review is to propose a research model of marketing efforts and brand awareness and brand image, to generate hypotheses that will be tested in chosing motocycles of the students to answer the research questions and to confirm the research model

Figure 2-1 : The structure of Chapter 2

2.2 Brand

Brands can be defined as a “name, symbol, term, or sign that are intended to

identify the goods and services of one particular firm” (Kotler, 1991, p 442)

Consumers’ consumption choices are often based on brand names that help to

differentiate one product from another Branding researchers have tried to

conceptualize the value of a brand or brand equity (Faircloth et al., 2001) In the general sense, brand equity can be defined as the “marketing effects that are

uniquely attributable to the brand” (Keller, 1993, p 1) In other words, because of the product or service’s brand name, different outcomes may result from the same marketing activity (Keller, 1993)

Customer-based brand equity is centered on the idea of how a consumer’s

knowledge of the brand affects the consumer’s response to the brand’s marketing activity (Aaker, 1991; Keller, 1993) From the perspective of the Customer-based Brand Equity model, brand knowledge is the key to creating brand equity, because

it creates the differential effect that drives brand equity What marketers need, then,

is an insightful way to represent how brand knowledge exists in consumer memory

An influential model of memory developed by psychologists is helpful in that regard The associative network memory model views memory as a network of nodes and links, in which nodes represent stored information or concepts and links represent the strength of association between this information or concepts Any type

of information can be stored in the memory network, including information that is verbal, visual, abstract or contextual in nature Consistent with the associative network memory model, brand knowledge is conceptualized here as consisting of a brand node in memory with a variety of associations linked to it In particular, Keller (1993) suggests that brand knowledge consists of two components - brand awareness and brand image – which are discussed in detail in the next two sections

Figure 2-2 : Dimensions of Brand Knowledge, Keller (1993)

2.2.1 Brand Awareness

The ease and likelihood to which a brand name comes to mind describes the

concept of brand awareness (Keller, 1993) Brand awareness reflects the strength of

a brand’s presence in the consumer’s minds (Pappu, Quester, & Cooksey, 2005),

Brand Knowledge

Brand Image

Brand Awareness

Strength of Brand Associations

Types of Brand Associations

Brand Recognition

Brand Recall

None Product Related

Product Related

Imagery

and it is related to the strength of the brand node or trace in memory in relation to the consumer’s ability to identify the brand in various conditions (Rossiter & Percy, 1987) Brand awareness can be demonstrated in the forms of brand recall and brand recognition (Keller, 1993) Brand recall occurs when the brand name is evoked by memory in response to a cue such as a product category name (Hutchinson & Raman, 1994) Distinguishable from brand recall, brand recognition can be

conceptualized as the consumer’s ability to verify previous exposure to the brand when the brand is given as a cue (Keller, 1993) In other words, brand recognition occurs when the consumer is exposed to the brand and is able to identify it as being seen or heard previously (Hutchinson & Raman, 1994; Keller, 1993)

Researchers have considered recall as a higher level of memory performance than recognition (Aaker, 1991, Washburn & Plank, 2002) In other words, if a consumer

is able to recall a brand outside a store when given the product category as a cue, then the consumer surely can recognize the brand when exposed to it in a store (Keller, 1993, Rossiter & Percy, 1987)

Aaker (1991) explains brand awareness as having many levels ranging from

recognition (being identified as seen or heard previously) at the lowest level, to brand recall (being evoked in a response to a cue such as product category) at mid level, to the highest level, the dominant brand or the only brand that can be recalled

by a consumer directly from memory (high level of awareness), it can be assumed that the consumer should be able to recognize the brand when exposed to a brand (the low level of awareness) Brand recall and brand recognition provide cues to the consumer which aid determining the set of brands to be considered for consumption (Baker, Hutchinson, Moore, & Nedungadi, 1986) Brand recall and brand

recognition have been explored to determine a general understanding of the brand awareness construct

2.2.2 Brand image

Along with brand awareness, brand image is an important component of brand knowledge (Keller, 1993) Brand image has been conceptualized as perceptions about a brand as reflected by the brand associations or anything that is linked to the brand in a consumers’ memory (Aaker, 1991; Keller, 1993) Brand image is shaped

by the associations made by consumers and is used to differentiate brands in a product category

Brand associations contain meanings about a brand for the consumer (Keller,

1993) A brand’s image results from the favorability, strength, and uniqueness of brand associations that are held by the consumer (Grace & O’Cass, 2002; Keller, 1993) Positive and unique brand associations that are strongly held by consumers enable consumers to build strong, favorable attitudes and emotions toward a brand (Aaker, 1991)

Brand associations may include attitudes, attributes, and benefits about a brand (Faircloth et al., 2001; Keller, 1993) First, brand attitude, or the overall evaluation a consumer has of a brand (Wilkie, 1986), may result from the consumer’s

perceptions of brand associations in regards to the brand (Aaker, 1991; Keller, 1993) Beliefs related to product/non-product attributes, brand benefits, and quality perceptions have been discussed as primary influences of brand attitude (Zeithaml, 1988) Brand attitude functions as a point of reference when the consumer is

exposed to the brand by having a direct influence on consumption (Lutz, 1991) Next, what a consumer thinks the product is or descriptive features that

characterize the product are referred to as attributes (Keller, 1993) Attributes can

be grouped into two types: product-related and non-product related Product related attributes are those that “relate to a product’s physical composition,” (Keller, 1993,

p 4) Product-related attributions could be directly linked to the product

performance Nonproduct related attributes have been defined as “external aspects

of the product or service that relate to its purchase or consumption” (Keller, 1993,

p 4) For example, user imagery is a non-product related attribute that a brand might posses when associated with characteristics such as user demographics and psychographics (Keller, 1993) Another non-product attribute example is usage imagery, which allows the consumer to associate the brand with the typical situation

in which the product would be used such as time of day, the location, or particular activities (Keller, 1993) User and usage imagery attributes may help to formulate brand personality, which is a type of brand association that captures “human

characteristics that are associated with a brand” (Aaker, 1997, p 347) Personality descriptors given to the brand are often an outcome of inferences that are made about the users or usage of the brand or a combination of both (Plummer, 1985) Finally, brand benefits are what consumers think the product or service can do for them and reflect the personal value that consumers attach to the brand (Keller, 1993) Benefits may be functional, symbolic, or experiential (Park, Jaworski, & MacInnis, 1986) Functional benefits more commonly satisfy needs associated with problem removal or prevention (Kim, Forsythe, Gu, & Moon, 2002) Symbolic benefits tend to be related to non-product related attributes and often associated with underlying needs of social approval, self-esteem, and self-concept (Keller, 1993; Solomon, 1983) Experiential benefits relate specifically to how a consumer feels when using the product and often satisfy cognitive stimulation and sensory pleasure needs (Orth & De Marchi, 2007) Keller (1998) proposed that brand equity comes from the effects of brand marketing which was regarded as consumer brand knowledge He showed that brand knowledge is one kind of memory mode of associative networks which are composed of brand awareness and brand image He suggested that brand images are reflected by types of brand associations,

favorability of brand associations, strength of brand associations, and uniqueness of brand associations Brand image is a result of consumers decoding of all the signals delivered by the brand such as brand name, visual signs, products, sponsoring, and advertising (Kapferer, 1994) Danesi (2006) proposes that the use of brand name enables consumers not only to recognize certain goods and distinguish them from

others, but also to associate connotative meanings to them Therefore, it allows consumers to decode brand image

2.3 Marketing efforts

Any marketing effort will be positively related to brand equity when it leads to a more favorable behavioral response to the focal product than to the equivalent unbranded product As proposed in the conceptual framework, managerial efforts manifested in controllable marketing actions are related to brand equity through the mediation of the dimensions of brand equity Therefore, to create, to manage, and to exploit brand equity, the relationships of marketing efforts to the dimensions of brand equity must be determined

We investigate consumers' perceptions of four selected strategic marketing

elements: advertising, price deals, store image and distribution intensity The

selected factors do not embrace all types of marketing efforts but are representative enough to demonstrate the relationships between marketing efforts and brand

awareness and brand image

2.3.1 Advertising

Advertising originated from the word “adverture” in Latin language means

attractiveness, charm and allurement According to the Vietnamese dictionary, Advertising means “propagandize, introduce goods, services or undertakings to consumers in many way with the purpose of persuading them to buy these goods or services and thus promote the goods and services” According to the Oxford

dictionary, advertising is drawing attention to or describing favourably (goods or services) in a public medium to promote sales or making them generally or publicly known, or seeking by public notice to make them so known Advertising is a paid form of a nonpersonal message communicated by business firms, non-profit

organizations, or individuals and is transmitted to a target audience through mass

media such as television, radio, newspapers, magazines, direct mail, outdoor

displays or mass - transit vehicles The main objectives of advertising is informing and persuading consumers to purchase specific brands offered by the advertisers, thereby getting profits However, advertising is also used to inform, educate and motivate the public about non-commercial issues, such as AIDS, political ideology, energy conservation, religious recruitment, deforestation and charity Thus, as far as language alone is concerned, the notion of advertising not only covers the giving of information about goods and services to promote sales but also its use to inform, propagandize and motivate the public regarding social and cultural life

2.3.2 Distribution intensity

Distribution intensity has been commonly defined as the number of intermediaries used by a manufacturer within its trade areas (cf Bonoma and Kosnik 1990; Corey, Cespedes, and Rangan 1989; Stern, El-Ansary, and Coughlan 1996) Sometimes called “place”(causing the marketing mix to be referred to as the “ four Ps”),

distribution is also concerned with the phycical movement of products With

distribution, marketing managers are concerned with marketing structure and

channels of distribution_those wholesalers, distributors, retailers, agents, and other responsible for getting goods and services to customers

Ideal distribution intensity would make a brand available widely enough to satisfy, but not exceed, target customers' needs, because oversaturation increases marketing costs without providing benefits (McCarthy and Perreault 1984)

There are three broad options - intensive, selective and exclusive distribution: Intensive distribution aims to provide saturation coverage of the market by using all available outlets For many products, total sales are directly linked to the number of outlets used (e.g cigarettes, beer) Intensive distribution is usually required where

customers have a range of acceptable brands to chose from In other words, if one brand is not available, a customer will simply choose another

Selective distribution involves a producer using a limited number of outlets in a geographical area to sell products An advantage of this approach is that the

producer can choose the most appropriate or best-performing outlets and focus effort (e.g training) on them Selective distribution works best when consumers are prepared to "shop around" - in other words - they have a preference for a particular brand or price and will search out the outlets that supply

Exclusive distribution is an extreme form of selective distribution in which only one wholesaler, retailer or distributor is used in a specific geographical area

2.3.3 Store image

Store image has a long history of changing conceptualizations This change

indicates the difficulties that researchers have in defining the construct (e.g., Sewell, 1974) Martineau (1958) is the first one that put the concept of store image into retail business He first defined store personality or image as follows The way consumers define their favorite store is based on the functions and characteristics of store, aura of psychological attributes, store’s atmosphere, and store’s advertising, etc Functions and characteristics of store include choice of product, price of

product, customer service, and quality of product, etc Aura of psychological

attributes and store’s atmosphere include the friendly service of employees, great smile of cashiers, or any interesting activities from store

Hirschamn and and Krishnan (1981) stated that store image means consumer’s general concept of value consciousness when he or she compares his or her favorite store with others In current years, there are lots of convenient stores, supermarkets, and hypermarkets in retail business To be able to compete with others, retailers have established many different kinds of store images to attract more loyal

customers, and therefore, how to create a good store image is one of the most

important things for retailers For consumers, store image is an important message for them to know the quality of store brand product If retailer has a good store image, consumers are willing to go there for shopping, and they will also

recommend to their friends Therefore, retailers could attract more consumers by establishing a good store image (Dodds et al., 1991) In addition, brand loyalty has a very close relationship with store image Consumers will not be loyal to their

favorite brand if they realize that store do not have a good store image

Although retailers have been using low-price strategy to promote store brand

product for a long time, more and more retailers start to implement marketing strategy by using store image in current years Retailers have noticed that most consumers do not know what kind of product brand they really want before

shopping, they usually decide what kind of product brand to buy when they are shopping in retail store If retailers have a good store image, they could attract more customers (Chang, 1992) In addition, consumers’ purchasing behavior will increase when retailers have a better store image (Chen, 1996) Moreover, consumers are willing to spend more money and go shopping again in retail sore if retailers have a good store image (Lin, 1994)

2.3.4 Price deals

Price promotions are related to price deals for a fixed number or the increase of the number of products with the same amount of money (Blattberg, Briesh and Fox, 1995; Raghubir and Corfman, 1999) In brief, customers can get same items at a lower price or get extra items at the same price Since price promotions create higher values, they can serve as economic motivation for customers to buy

products; therefore, many retailers often initiate price promotions to stimulate the need or encourage nonusers to try certain products (Gerstner and Hess, 1992;

Raghubir and Corfman, 1999)

Price promotions are dominant forms in sales promotions in today’s market

(Buzzell, Quelch and Salmon, 1990) However, many problems related to price

promotions are raised and discussed Raghubir and Corfman (1999) indicate that

price promotions may make customers associated promoted products with low

quality so that they fail to achieve the sales growth

Gedenk and Neslin (1999) also argue that price discounts may bring a detrimental

impact on future brand preferences Similarly, Grewal, Krishnan, Baker, and Borin

(1998a) imply that frequent price discounting may diminish customers’ perception

of value Besides, some studies demonstrate that price reductions can lower

reference prices of customers, which lead to the reduction of profitability (Blattberg

et al, 1995; Hardesty and Bearden, 2003)

2.4 Relationship between marketing effort and brand awareness and brand image

The level of advertising spending has been found to have a positive relationship

with advertising recall, which is a measure of brand awareness Advertising plays a

pivotal role in increasing brand awareness as well as creating strong brand

associations Repetitive advertising schedules increase the probability

that a brand will be included in the consideration set, which simplifies the

consumer's brand choice, making it a habit to choose the brand (Hauser and

Wernerfeldt 1990) Thus, a greater amount of advertising is related positively

to brand awareness and associations, which leads to greater brand equity

When the consumers perceive a high effort in advertising, this constitutes an

indicator of the confidence that the persons in charge of marketing have in the

product (Kirmani & Wright, 1989) The perceived advertising spending has positive

effects, not only on brand equity as a construct, but also on each of its components:

brand loyalty, brand awareness, perceived quality and brand image (Cobb-Walgren,

Ruble & Donthu, 1995) So, between the different advertising actions by the

company and the dimensions of the brand equity causal relationships can be

established

The effort in advertising as a basis for attaining brand awareness is positively

related to the intensity of the advertising investment (Deighton, 1984; Hoyer & Brown, 1990) The brands achieve knowledge through marketing communications and the advertising investment is the main promotional tool for products in the consumer market (Villarejo & Sánchez, 2005)

_Hypothesis 1 : The major perceived advertising spending that the company

invests in the brand positively affects brand awareness

The associations linked to the brand are mental pictures that the consumer perceives after recognising them in the messages that the company sends The positive

associations that form a high brand image are transmitted to consumers through advertising and advertising strength (Keller, Heckler & Houston, 1998)

_Hypothesis 2 : The major perceived advertising spending that the company

undertakes for the brand positively affects brand image

Distribution intensity Distribution is intensive when products are placed in a large number of stores to cover the market To enhance a product's image and get

substantial retailer support, some companies tend to distribute exclusively or

selectively rather than intensively It has also been argued that certain types of distribution fit certain types of products Consumers will be more satisfied,

however, when a product is available in a greater number of stores because

they will be offered the product where and when they want it (Ferris, Oliver, and de Kluyver 1989; Smith 1992) Intensive distribution reduces the time consumers must spend searching the stores and traveling to and from the stores, provides

convenience in purchasing, and makes it easier to get services related to the product

As distribution intensity increases, therefore, consumers have more time

and place utility and perceive more value for the product The increased value results mostly from the reduction of the sacrifices the consumer must make to acquire the product This increase of satisfaction provokes a favourable

predisposition towards the brand by which the associations linked to it are improved and, therefore, the brand image is increased The intensive presence in the

establishments supposes a major degree of knowledge of the brand too, so the increases in the distribution intensity will have a positive effect on the recognition attained by the brand name and its brand awareness Once the relationships between the perceived of intensity level in the distribution and the components of the brand equity are established, we set out the hypotheses relative to the causal relationships between these variables:

_Hypothesis 3 :The level of intensity perceived with which a product is

distributed as a brand positively affects a _brand's degree of awareness

_Hypothesis 4 :The level of intensity perceived with which a product is

distributed as a brand positively affects its _brand image

Besides the fact of the influence of the store image on the quality perception, to be present in establishments that have a positive image supposes for the brands a major attraction in order to be accepted by the consumers The customers will feel

attracted towards the establishments in which they find brands that they identify with the same perception of quality that they attribute to the retailer In this respect, diverse works (Zeithaml, 1988; Rao & Monroe, 1989) show how the good image of the retailer provokes a high level of satisfaction in the consumer Simultaneously this increases expectations of quality which transmit to other nearby consumers who will thus feel attracted towards the establishment with the hope of finding brands of high quality This attraction towards the store and towards the associations linked to the retailer will make the distributed brands receive the reflex of the same

associations This is why the store image determines brand image and the set of positive associations linked to it

The importance of channel design and management as a marketing tool of

increasing brand equity is growing (see Srivastava and Shocker 1991) In a

distribution channel, retailers encounter a firm's ultimate consumers Selecting and managing retailers is therefore a firm's major marketing task in satisfying

consumers' needs In particular, distributing through good image stores signals that

a brand is of good quality Dodds et al (1991) find significant positive effects of store image on perceived quality The store name is a vital extrinsic cue to

perceived quality The quality of a given brand is perceived differently depending

on which retailer offers it Customer traffic will be greater in a store with a good image than in one with a bad image Good-image stores attract more attention, contacts, and visits from potential customers In addition, such stores provide

greater consumer satisfaction and stimulate active and positive word-of-mouth communications among consumers (Rao and Monroe 1989; Zeitham11988)

Therefore, distributing a brand through an outlet with a good image will create more positive brand associations than distributing through an outlet with a bad

image

_Hypothesis 5 : The store image positively affects the set of associations

linked to the brand and that agree with its brand image

Sales deals in general, and especially price deals, have been considered to

weaken brand equity in spite of the short-term benefit that they provide

to the consumer Sales promotion may not be a desirable way to build brand equity because it’s easily copied and counteracted (Aaker 1991) and only enhances short-term performance by encouraging sales and momentary brand switching(Gupta 1988) In the long run, sales promotion may convey a low-quality brand image In fact, in the long term, brand image can appear to be of poor quality and worn out Activities based on lowering prices can place brands in danger by provoking

consumer confusion; instability and variability leads to an image of unstable

quality In this regard, using price deals means deterioration in brand equity in both perception of the brand’s quality and its image Also, price promotion campaigns do not last long enough to establish long-term brand image, which can be achieved by other efforts such as advertising and sales management (Shimp 1997) As such, the established hypotheses are:

_Hypothesis 6 : _The use of price deals for the brand has a negative effect on its image

2.5 Conclusion

This chapter provides theoretical framework for the research However, with the reason regarding the product quality aspect as discussed above, a research model without the product quality component is suggested below (Figure 2.3) The

researcher also assumes that there should be some adjustments of the measurement scale in order to make the research model more suitable Chapter 3 will discuss this matter in more details

Figure 2-3 : Model of effects of marketing efforts on brand awareness and brand image

Distrfibution Intensity

Store Image Advertising

Price Deals

Brand Awareness

Brand Image

+H1 +H2

+H3 + H4 +H5

_H6

3 Chapter 3 : Methodology

3.1 Introduction

The previous chapter provides theoretical framework for the research This chapter provides an overview of business research and introduces research methodology used to build and assess the measurement scales, the statistical techniques employed

to analyze the data, and testing the research hypotheses and research model as well The chapter outline is shown in figure 3.1

Figure 3-1 : Outline of chapter 3

3.2 Research design

The first step in business research is to determine what objectives the researcher wants to achieve Research design then enables the researcher to select appropriate methods in order to meet the research objectives in the most efficient way

To measure the customer-based brand equity constructs, the current study

employs a descriptive method This method was chosen because it allows the

researcher to describe the customer’s attitude towards the marketing elements for a brand, describe the relationships among variables…(Tho & Trang, 2007)

Data for this study was collected using a survey technique This technique “provides

a quick, efficient and accurate means of assessing information on a population, especially in the case of a lack of secondary data” (Zikmund, 1997- cited in Quan, 2006)

The research process of this study is shown in figure 3.2

Figure 3-2 : Research process

Delete low item-total correlation item (<.30)

Delete low factor loading item (<.40)

Test research model Test the hypotheses

EFA : Exploratory Factor Analysis

EFA

Linear

Regression

3.3 Item generation

3.3.1 Introduction

The first step in the research design process involves item generation This

was achieved through a literature search which was used to specify how to measure the constructs and to design the initial questionnaire The questionnairewas initially designed in English The original English version was then translated into

Vietnamese by one translator and then was translated back into English by another translator, each of whom was fluent in both languages The original and back-

translated English versions of the questionnaire were compared to ensure the

equivalence of meanings of the items, and were refined where necessary This was the first draft of the questionnaire of 32 candidate scale items as described in the following section 3.3.2

Then, a focus group discussion (FGD) was used as the methodology for this study

in order to adapt the questionnaire from the previous survey research We refined the questionnaire through a FGD of 8 participants The FGD comprising students at HUTECH University was conducted in order to partly verify items of the previous studies These provided a forum through which the items highlighted here could be further explored and the relevant to learners tested It also allowed the researchers to assess learners’ understanding to the proposed questionnaire items and determine what the weaknesses of wording might be Finally, after modified, a final

questionnaire of 32 candidate scale items was used in the main survey

3.3.2 Operationalization of measures

As discussed in chapter 2, there are six constructs in the theoretical model These are: (1) Brand image; (2) Brand awareness; (3) Perceived advertising spending; (4) Distribution intensity; (5) Store image and (6) Price deal

The consumer normally has a perception of the brand in terms of the marketing communications spent by the company Advertising expenditure, as the main

marketing communications tool in the consumer market, should be kept in

consideration when determining its effect on consumers and the perception that its messages are provoking among different target individuals The scale developed to measure the advertising spending perceived by the consumer consists of seven indicators

Table 3-1 : Measures of perceived advertising spending

code

In general, I like the advertising campaigns for X brand PAS2

The ad campaigns for X seem very expensive, compared to campaigns

for competing brands

PAS4

I think X brand is intensively advertised, compared to competing brands PAS5

Distribution intensity tried to measure the perception that the consumers have in relation to the number of points of sale in which one finds the sought-for brand available Therefore, it was an index of the intensity perceived in the distribution of the product According to Yoo et al (2000), which adapts and modifies the scale raised previously by Smith (1992), we have considered necessary three indicators that try to give an approximation of the perception with regards to the intensity with which the product-brand is commercialised

Table 3-2 : Measures of distribution intensity

code

Compared to its competitors, I can find X brand in more retailers DI1

X choose with extreme care, than competitors, the retailers where it sales

its products

DI2

The store image was a measurement of the quality perception that the consumers have about the retailers where they have the brand available To measure its

influence we used five items in which preventing enunciating the trade name has been preferred The answers lead to a general abstraction about the establishment in which the consumer usually acquires the product All the items of this scale had a similar construction in which we mean to recognise the perceptions of the

consumers about the retailer where (the consumer) can buy the product As soon as people were thinking about a particular establishment, they thought about the different attributes that go hand in hand with this store

Table 3-3 : Measures of brand image

code

The retailers where I can to buy X brand sale high quality products SI1

The retailers where I can to buy X brand are quality places SI2

The retailers where I can to buy X brand are prestige places SI3

The retailers where I can to buy X brand haven’t nice ambient SI4

The retailers where I can to buy X brand sale very popular brands SI5

According to Yoo et al (2000), we have considered necessary seven indicators that tried to give an approximation of the perception with regards to the price deals

Table 3-4 : Measures of price deals

code

Price deals for X are emphasised more than seems reasonable PD5

I think price deals for X are more frequent than for competing brands PD6

To measure the second dimension - brand image seven items are employed

All of these items concerning brand image are measured on a five-point Likert scale with 1 for ‘‘strongly disagree’’ and 5 for ‘‘strongly agree’’ Here, we

presume that a high scale point of brand image indicates that the brand not only has a positive image to the customer but also exhibits a greater level of brand image strength in comparison with others

Table 3-5 : Measures of brand image

code

I have a clear impression of the type of people who use X brand BI4

X has a strong image BI5

The intangible attributes of X brand are reason enough to buy it BI6

X provides a high value in relation to the price we must pay for it BI7

Brand awareness, the third component of brand equity, refered to the strength of a brand’s presence in the customer’s mind (Aaker 1996) High levels of brand name recognition was those that present the brand with a high degree of brand awareness For this reason, knowledge and recognition of the brand compared to its competitors are indicators that serve to form the measurement scale for this dimension In this study, for the measurement of the brand awareness component four scale items were employed that have been originated in Kim, Jin-Sun, and Kim (2008) study, with a five point Likert scale anchored from 1 (strongly disagree) to 5 (strongly agree)

Table 3-6 : Measures of brand awareness

3.4 Preliminary study

The preliminary survey was conducted by a focus group discussion with 8

independent students at HUTECH University It is noted that all of the constructs used in this study have been developed and empirically tested in developed

countries

Therefore, it was considered that the preliminary survey would be useful in order

to modify measures to suit the context of developing countries The purpose of the

preliminary test was to eliminate possible weaknesses and flaws in the first draft questionnaire in order to create the final questionnaire for the main survey The preliminary study is a pretest of construct measures The purpose of this pretest is

to provide a preliminary evaluation and refinement of the measurement scales

As such, the first step to adapt the scales is to use focus group discussion

The contents of focus group discussion would be noted, aggregated to edit the scales The focus group has been used as a process for gaining information for questionnaire development Focus group interviews are also used for testing

wording (unable to understand, difficult to answer, etc), or interpreting

questionnaire items A focus group is particularly useful for learning about

participants’ conceptualizations of particular phenomena and the language they use to describe such phenomena

The focus group discussion for this study was held at the Meeting Room of

Business Administration Faculty, University of Technology, HoChiMinh City Finding and recruiting individuals to join the pool of participants for the focus group initially required careful consideration

The result of the focus group discussion is the modified scale of 46 variables as described in Table 3.7 In which, in brand image scale, the item BI8: “X is a

different brand” is omitted due to redundance

Table 3-7 : The final questionnaire

PAS1 I think advertising is, in general, very good

PAS2 In general, I like the advertising campaigns for X brand

PAS3 My opinion about X´s Advertising is very high

PAS4 The ad campaigns for X seem very expensive, compared to

campaigns for competing brands

PAS5 I think X brand is intensively advertised, compared to

competing brands

PAS6 The advertising campaigns for X are seen frequently

PAS7 I remember the last advertising campaigns for X

Perceived Advertising Spending

(Yoo, Donthu and Lee, 2000; Martín, 2002)