Key factors affecting brand loyalty in hotel industry in ho chi minh city

This research shows others dimensions of consumer-based brand equity as brand identification and ideal self-congruence based on Ekinci et al.’s 2008 model of consumer satisfaction and Aa

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Thai Hong Kim

KEY FACTORS AFFECTING BRAND LOYALTY IN HOTEL INDUSTRY IN HO CHI MINH CITY

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2014

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Thai Hong Kim

KEY FACTORS AFFECTING BRAND LOYALTY IN HOTEL

INDUSTRY IN HO CHI MINH CITY

ID: 22110031

MASTER OF BUSINESS (Honours)

SUPERVISOR: DR.DINH THAI HOANG

Ho Chi Minh City – Year 2014

ACKNOWLEDGEMENTS

I would like to express my sincere gratitude to Dr Dinh Thai Hoang who has supported me a lot with the thesis preparation and motivated me throughout the journey of the thesis

I strongly believe that I could have not completed this thesis without the assistance from all

of my friends who helped me to guide the customers to do the survey and chased for data submission

I would like to take this opportunity to thank leaders, teachers and staffs in ISB who help me usefully all the subjects of my master course

Last at all, I would like to present the achievement to my family who supported and encouraged me during this time

July, 2014

Ho Chi Minh City, Viet Nam

Thai Hong Kim

TABLE OF CONTENTS

CHAPTER 1 : INTRODUCTION 1

1.1 Research background 1

1.2 Research Problems 1

1.3 Research Objectives 3

1.4 Research Scope 3

1.5 Research Structure 3

CHAPTER 2 : LITERATURE REVIEW 5

2.1 Consumer-based brand equity 5

2.2 Service quality: Physical quality and Staff behavior 6

2.3 Ideal self-congruence 8

2.4 Brand Identification 9

2.5 Consumer satisfaction and Brand loyalty 10

2.6 Research Model and Hypotheses 13

CHAPTER 3: METHODOLOGY 15

3.1 Research Process 15

3.2 Research Design 17

3.3 Measurement 17

3.4 Sample Selection 20

3.5 Data Collection 20

3.6 Data Analysis 21

CHAPTER 4: DATA ANALYSIS AND RESULTS 25

4.1 Descriptive Analysis 25

4.2 Measurement Assessment 26

4.2.1 Cronbach’s alpha 26

4.2.2 Exploratory factor analysis 32

4.3 Regression 38

4.3.1 Model 1: Multiple Regression Analysis with all independent variables and CS 38

4.3.2 Model 2: Multiple Regression Analysis with with consumer satisfaction variable as independent variable and brand loyalty as dependent variable 41

4.4 Hypothesis testing 43

4.5 Discussion of Findings 46

CHAPTER 5: CONCLUSION AND IMPLICATION 47

5.1 Conclusion 47

5.2 Managerial Implications 48

5.3 Limitations and Future Research 48

REFERENCES 50

APPENDICES 53

ABSTRACT

Recent years, the hotel industry in Vietnam is developing sharply The development of high standard or luxurious hotels to satisfy the demand of consumers creates the competitive market Besides that, the return of Ho Chi Minh City hotel market through recent years is the good news and also the challenge for the firms in this industry (2010-2013: hotel room

increased 35% , source: Alternaty, 2011-2013: total tourist arrival increased 11%, source:

The Ho Chi Minh City Department of Culture, Sports and Tourism) This development reflects the growing of travelling, enjoying, eating and drinking demand of a large number of hotel guests in a developing economy of Vietnam The firms in this industry need to pay attention to maintain business performance through building the brand loyalty and also recruit new users to develop themselves

This study aims to investigate which factor affecting brand loyalty and explores how these factors affect on brand loyalty

Keywords: key factors, hotel, brand loyalty

11%, source: The Ho Chi Minh City Department of Culture, Sports and Tourism) Besides,

attracting the number of domestic visitors rapidly 28 million (2010), 30 million (2011) and 32.5 million (2012) Capturing the trends and potential of hotel industry in Vietnam, the existing and new comers in this industry are facing with a strong competitive environment The issue is how the firms in this industry survive and develop themselves

satisfaction investigates its impact on consumers’ post consumption evaluations such as behavioral and attitudinal loyalty (Cooil, Keiningham, Aksoy, & Hsu, 2007)

It is widely accepted that satisfied consumers are less price sensitive, less influent by competitors’ attack and loyal to the firm longer than dissatisfied consumers (Dimitriades, 2006) This mean a satisfied consumer might spread the word about having a good experience, but a dissatisfied one will almost certainly complain to at least one person, recommending that their friends do not use your product and looking for another supplier themselves This means less money and less business for a company, with a strong possibility that at least a quarter of the disgruntled consumers never deal with your business again Ekinci et al.’s (2008) study is notable because it shows that service quality and ideal self-congruence are antecedents of consumer satisfaction They proposed these factors are key determinants of intention to return With this parallel the concept and measurement of brand equity in the hotel industry has gained considerable attention from academicians, practitioners, and researchers in recent years (Bailey and Ball, 2006; Kim and Kim, 2005; Prasad and Dev,2000; Cobb-Walgren et al., 1995)

Despite the availability of numerous definitions for brand equity in the literature, there is no common consensus about the meaning of brand equity and how a firm can measure the value of the brand (Bailey and Ball, 2006; Park and Srinivasan, 1994) This research shows others dimensions of consumer-based brand equity as brand identification and ideal self-congruence based on Ekinci et al.’s (2008) model of consumer satisfaction and Aaker’s (1991) model of brand equity Cai and Hobson (2004) suggest an integrated approach to successful brand development and brand loyalty by taking into account brand experiences Accordingly, the effect

of brand equity on brand loyalty is examined when consumers have direct experiences with brands (Brakus, Schmitt, & Zarantonello, 2009)

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This study aims to identify the impacts of consumer-based brand equity on consumer satisfaction, and how consumer satisfaction affects the brand loyalty when its role is as an intermediate factor in this research model

1.3 Research Objectives

The research objectives are:

- To identify factors affecting brand loyalty in Hotel industry

- To determine the impact of each factor on brand loyalty in Hotel industry

1.4 Research Scope

This study focuses on hotel consumers in Ho Chi Minh City; include three to five hotels, around big center districts at Ho Chi Minh City: district 1, 3, 5, Go Vap, Binh Thanh

1.5 Research Structure

The below structure is implemented for this research:

• Chapter 1: Introduction to introduce research background, research problem, research objective, research question, research scope and structure of the research

• Chapter 2: Literature review This chapter reviews theories and selects the research’s factors as well as formulates the research hypotheses and model

• Chapter 3: Research methodology This chapter provides general idea how the research is designed and implemented

• Chapter 4: Data analysis, result and finding discussion This chapter translates data collected from survey, analyses data as well as discusses the result finding in connection with theory

• Chapter 5: Conclusion, implication, limitation and future research This Chapter concludes the research finding, provides implication, further suggestion as well as research limitation

2.1 Consumer-based brand equity

Prasad and Dev (2000) identified hotel brand equity as the favorable or unfavorable attitudes, then the perceptions are formed and influence a consumer to book at a hotel brand represent the brand equity According to Bailey and Ball (2006) hotel brand equity is viewed as “the value that consumers and hotel property owners associate with a hotel brand, and the impacts of these associations on their behavior” Researchers also claimed that a hotel will have strong brand equity when a large number of customers have a favorable perception of and attitude toward the hotel brand

Brand equity is a perception of belief that extends beyond mere familiarity to an extent of superiority that is not necessarily tied to specific action Familiarity does not imply belief in superiority Brand equity does not imply action, only perception Commitment and loyalty also

do not imply superiority, whereas brand equity does (2008, p.152)

Empirical research conducted by Kim and Kim (2005) on luxury hotels tests the consumer based brand equity and its effects on company performance Based on earlier research in the service industry (e.g., Ekinci et al.2008; Gronroos, 1984), study consists of four dimensions of customer based brand equity: two service quality dimensions—physical quality and staff behavior are incorporated to the consumer-based brand equity model The third is ideal self-congruence and

brand identification are also included to capture symbolic consumption of the hotel brands (e.g., Johnson, Herrmann, & Huber, 2006; Kim, Han, & Park, 2001)

This research model proposes that the dimensions of consumer-based brand equity, physical quality, staff behavior, ideal self-congruence, brand identification have positive effects on brand loyalty via consumer satisfaction

2.2 Service quality: Physical quality and Staff behavior

Service quality is defined as “an overall assessment of service by the consumer” (Lewis and Booms, 1983, cited in Ganguli and Roy, 2010) It is central to the development of strong service dominant brands because it helps to differentiate brands in competitive markets and help to enhances perceived superiority of the brands (Aaker, 1996; Low & Lamb, 2000; Yoo, Donthu, & Lee, 2000; Zeithaml, 1988) Service quality also are described as a form of attitude, related but not equivalent to satisfaction based on the results from the comparison of expectations with performance (Bolton and Drew, 1991; Cronin Jr and Taylor, 1992; Parasuraman et al 1988; Shepherd, 1999)

Service quality focus to the development of strong service domi- nant brands because it enhances perceived superiority of the brands and helps to differentiate brands in competitive markets (Aaker, 1996; Low & Lamb, 2000; Yoo, Donthu, & Lee, 2000; Zeithaml, 1988) The concept of service quality is widely accepted as multidimen- sional, but the content and number of its dimensions is still debated (Chao, 2008) Besides that, service quality is an antecedent of the broader concept of consumer satisfaction (Gotlieb et al., 1994; Buttle, 1996; Zeithaml and Bitner, 1996; Lee et al., 2000) and the relationship between service quality and loyalty is mediated by satisfaction (Caruana, 2002; Fullerton and Taylor (2002) Service quality is often highly dependent on the customer’s contacts and relations with the employees His trust is often

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more related to a specific person than to the company (Thomasson, 1993) Many researchers suggested that high service quality resulted in high consumer satisfaction (Parasuraman, Zeithaml, and Berry, 1985, 1988) The model of service quality best known as the SERVQUAL model of The North American School of Thought consists of five service quality dimensions: tangibles, reliability, responsiveness, assurance and empathy (Parasuraman, Zeithaml, & Berry, 1988)

Although the SERVQUAL model had been applied by many research and academics, validity of the model is seriously questioned and being researched by many studies One of disagreements is about the exact number of dimensions and its suitability to a specific service sector (Buttle, 1996) The view of Nordic School is service quality consists of two dimensions: technical quality and functional quality (Gronroos, 1984) Empirical studies (e.g., Brady & Cronin, 2001; Ekinci, 2001; Madanoglu, 2004; Mels, Boshoff, & Nel, 1997) suggest that the two dimensional service quality model offered by the Nordic School has more valid when applied to hospitality services Considering the growing body of research in the service industry, this study mention two service quality dimensions for evaluation of hotel brand equity: physical quality and staff behavior (e.g., Brady & Cronin,2001; Ekinci et al., 2008; Parasuraman et al., 1988) Physical quality can be understood as the image projected by the design, equipment, facilities, and materials of the hotel Staff behavior is the image projected by competence, helpfulness, friendliness, and responsiveness of the hotel employees (Ekinci et al., 2008; Madanoglu, 2004)

Many researchers present conceptual and experienced evidence to support positive relationship between service quality and consumer satisfaction For instance, Oliver (1993) found that service quality is an antecedent of consumer satisfaction and both constructs should positively associate with each other And there are numerous empirical researches confirm the positive relationship between service quality and consumer satisfaction in the hotel industry (Heung, Wong, & Qu,

2002; Lam & Heung, 1998; Tam, 2000) Therefore, a service organization needs to understand how consumers evaluate the quality of the service they receive and the basis on which they become loyal to that organization to satisfy its consumers (Kandampully, 1998) The quality of a product will determine if it satisfies consumers’ demands and attracts consumers to repurchase a product This research focuses on two separate dimensions of service quality: physical quality and staff behavior, and explored that they are positively related to consumer satisfaction As Ekinci et al (2008) demonstrate that the two dimensions of service quality: physical quality and staff behavior, have a positive effect on consumer satisfaction in the hospitality industry Therefore, this research proposes that:

H1 Physical quality has a positive effect on consumer satisfaction

H2 Staff behavior has a positive effect on consumer satisfaction

2.3 Ideal self-congruence

Self-concept can be identified as the totality of an individual’s thoughts and feelings with reference to the person as an object of thought (Rosenberg, 1979) Sirgy, (1982); Helegeson and Supphellen, (2004); Galan, (2007) defined congruence into four types: congruence with the real self-image, congruence with the ideal image of self, congruence with the social self-image, congruence with the ideal social self-image Self-congruence refers to the degree to which a consumer’s actual or ideal self-concept coincides with a brand image (Sirgy, 1982; Sirgy, Grewal, & Mangleburg, 2000) Individuals only consume the products which do reflect their genuine self (Galan, 2007) The theory of self-congruence states that people buy or own brands

in order to sustain or enhance their self-esteem (Graeff, 1996)

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The same story with prior research, the current study adopts the view that self-congruence relates

to the extent to which brand image consists with consumer’s ideal self-concept (Ekinci et al., 2008; Hong & Zinkhan, 1995)

The positive relationship between ideal self-congruence and consumer satisfaction in tourism and hospitality is explained through previous studies For instance, Chon’s (1992) study demonstrates a positive relationship between ideal self-congruence and tourists’ satisfaction with

a destination visit experience Bigne, Sanchez, and Sanchez (2001) show that similarity between tourists’ self-concept and destination image has a significant effect on consumer satisfaction Ekinci et al.(2008) examine the impact of ideal self-congruence on consumer satisfaction in the hospitality industry They confirmed that ideal self-congruence has a positive influence on consumer satisfaction Thus, this study hypothesizes was proposed:

H3: There is a positive relationship between ideal self-congruence and consumer satisfaction

2.4 Brand Identification

Organizational identification theory states that an individual be-comes a member of a social group in order to support his identity and his sense of belonging (Mael & Ashforth, 1992) Referring to social identification and categorization theory, an individual will identify with a social category when the social category enhances an individual’s self-esteem An indentified individual will engage in positive pro category behavior to preserve the attractiveness of the social identity (Bhattacharya and Sen, 2003; Taifel and turner, 1985) Besides, consumers define their social identity by consuming brands or associating with brands (Del Rio, Vazquez, & Iglesias, 2001) The positively value of brands enjoy a good reputation among the groups to which they belong or considerate to belong (Long & Shiffman, 2000)

Consumers are satisfied with a brand when brand identification represents their positive image within social groups or achieves sense of belonging to a social group (Ferreira, 1996; Kim et al., 2001) Previous studies show that brand identification stimulates symbolic interaction emotional bonding and brand loyalty Thus, this study showed that stronger consumer identification with a brand results in greater consumer satisfaction

H4 Brand identification has a positive effect on consumer satisfaction

2.5 Consumer satisfaction and Brand loyalty

“Consumer” is defined by many researchers from different perspectives A consumer is a person, company or other entity that purchases goods and services produced from others According to (Oliver, 1996, p.14), satisfaction can be defined as “…the consumer’s fulfillment response It is a judgement that a product or service feature, or the product or service itself, provided a pleasurable level of consumption-related fulfillment, including levels of under or over fulfillment” Consumer satisfaction is defined as an "evaluation of the perceived discrepancy between prior expectations and the actual performance of the product" (Tse and Wilton, 1988, Oliver 1999)

Satisfaction is initially defined by Locke (1976, as cited in Bhattacherjee, 2001) in the context of job performance as “a pleasurable or positive emotional state resulting from the appraisal of one’s job.” This definition is extended by Oliver (as cited in Bhattacherjee, 2001) to the consumption context as “the summary psychological state resulting when the emotion surrounding disconfirmed expectations is coupled with the consumer’s prior feelings about the consumption experience.”

In research and practice field, customer satisfaction is still an abstract and rather ambiguous concept (Corneliu et al., 2010) Customer satisfaction towards a service is an emotional feeling

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after using the service which is transaction-specific evaluation (Cheng et al.; Spreng and Singh; Oliver, as cited in Pham Ngoc Thuy and Le Nguyen Hau, 2010) Cronin & Taylor (1992) indicated that customer satisfaction is conceptualized on the customer‘s experience on a particular service encounter Consumer satisfaction with products or services of a company is viewed as the most important factor leading toward success and competitiveness (Hennig-Thurau and Klee, 1997)

Consumer satisfaction is actually how consumer evaluates the ongoing performance of the company (Gustafsson, Johnson and Roos, 2005) Due to Kim, Park and Jeong (2004), consumer satisfaction is consumer’s judgment of satisfaction level and consumer’s reaction to the state of satisfaction Consumer satisfaction is the overall evaluation to the services Nowadays, consumer satisfaction is very important when do business as according to Deng et al., (2009) the ability of

a service provider to create high degree of satisfaction is important for product differentiation and building strong relationship with consumers Consumers who get satisfied will repurchase and would like to share or recommends their good experiences to other people like their family

or friends (Kotler & Armstrong, 2010) It is the reflection that consumers make to their previous purchases If it always meets and exceeds consumers’ expectation, their loyalty increases And dissatisfied customers have no bond of loyalty with the company

Loyalty comes from consumer satisfaction Consumers become loyal when they feel satisfied from the quality of the service provided by the companies (Beibei, Shiyang &Jiahong) Recently consumer loyalty has become an important key to success because it is considered able Customers’ loyalty about any brand would like to tell their tendency of purchasing and using a product and repeated using that product (Chaudhuri, 1999)

There are many factors to evaluate companies’ financial performance and competitiveness in the market According to (Reichheld, 2001), consumer loyalty has become one of important keys to

success in a company According to (Claude, 2012) claims that consumer is an entity with the ability to choose products and suppliers and receive goods or services Fred Reichheld defines loyalty as the willingness to make an investment or personal sacrifice to strengthen a relationship (Reichheld, 1996) Thus, consumer loyalty is the ultimate reward that a supplier receives in his effort in interacting with its consumer (Kharibam, 2012) “True loyalty can only exist if the consumer embraces a positive attitude towards a specific company and suggest that favorable attitudes influence repeated purchasing.” Jensen and Hansen (2006), Aaker (1991, p 39) defines brand loyalty as ``the attachment that a consumer has to a brand.''

According to Aaker (1991), brand loyalty is a basis of brand equity that is created by many factors, chief among them being the use of experience Keller (2000) stated that brand loyalty certainly seems to be key variable for management interested in the value of brand equity when measure from a consumer perspective

Also, from Kotler (2003), brand loyalty plays important role for the success of product The marketers show that many companies had illusions to find new market and to forget bringing up current market, while profit gaining from current market is much higher than new market due to low marketing expense Therefore, higher brand loyalty from customers is higher profits for company

Rust and Zahorik (1993) prove a relationship between consumer satisfaction and brand loyalty in the retail banking and hotel industry McDougall and Levesque (1994) show that consumer satisfaction has a positive effect on brand loyalty in different service sectors: dentistry, auto repair services, restaurants, and hairdressers Faullant, Matzler, and Fuller (2008) confirm the predictive ability of consumer satisfaction on loyalty Thus, we propose that:

H5: There is a positive relationship between consumer satisfaction and brand loyalty

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2.6 Research Model and Hypotheses

Based on the above studies, a conceptual model is proposed Details about a conceptual model and it hypotheses as follows:

H1 Physical quality has a positive effect on consumer satisfaction

H2 Staff behavior has a positive effect on consumer satisfaction

H3: Ideal self-congruence has a positive effect on consumer satisfaction

H4 Brand identification has a positive effect on consumer satisfaction

H5: There is a positive relationship between consumer satisfaction and brand loyalty

Figure 1: A Conceptual Model

All key concepts of Consumer based Brand equity, Physical quality, Staff behavior, Brand identification, Consumer satisfaction and Brand loyalty and their important roles in business had

Consumer satisfaction

been reviewed through chapter two The findings showed that consumer satisfaction partially mediates the effects of physical quality, staff behavior, ideal self-congruence and brand identification on brand loyalty The effects of physical quality on brand loyalty are fully mediated by consumer satisfaction

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CHAPTER 3

METHODOLOGY

Methodologies will be explained in this chapter to collect the data to address the research issues

of this study It starts with the research design process, questionnaire design It provides information about the sample demography It further describes the instruments, the data collection processes and the type of analysis carried out on each phase of the study

3.1 Research Process

Figure 3.1: Research Process

After the research problem the research objectives and research scope were defined The literature review was conducted to review all relevant theories to find a suitable conceptual

model for hotel industry in Viet Nam and thereby develop its hypotheses The draft questionnaire was developed from the consolidation of various questionnaires used in some previous studies of the extant literature Then the Research Design in this study was designed in two steps: a pilot study and main survey

This research focused on what factors influence consumer to be loyal to a specific hotel During this process, it shows the relationship between brand equity’s elements and brand loyalty cannot

be separated After recognizing consumer satisfaction as an important element, the next step was

to find theories related to this abstract subject With this information, the researchers could define that Physical service, Staff behavior, Ideal self- congruence, Brand identification may be the factors that could influence Consumer satisfaction and Consumer satisfaction might affect Brand loyalty of individual users in this industry

The questionnaires for consumers will be created based on previous research, which helped us to find out more about the thoughts of consumers After collected enough data from the questionnaires, the researcher transfer them into statistical data and analyzed the data From the data collected from this main survey, the measures were assessed by Exploratory Factor Analysis

to explore the inter-relationships among a set of variables The inter-correlations among the variables were considered strong when the correlation matrix for evidence of coefficients was 0.3 Barlett’s test of sphericity was significant (p<0.5) and the KMO index was greater than 0.6 and ranges from 0 to 1 Based on this outcome, the hypothesized conceptual model was modified Cronbach’s Alpha was employed to assess the measurement scale reliability by testing the internal consistency among variables of the same construct The scale was considered reliable when the Cronbach’s Alpha coefficient is above 0.7

After the reliability was confirmed, multiples regression analysis was employed to test the hypotheses Then this research can connect the data to the theories, thus allowing the analyzed

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data to connect to the theories so that the researchers finally were able to see how these factors could affect people to be loyal to a brand of hotel

3.2 Research Design

Research can be defined as a “structured inquiry that utilizes acceptable scientific methodology

to solve problems and create new knowledge that is generally applicable” (Grinnell, 1993) Inductive research begins with detailed observations of the world, which moves towards more abstract generalizations and ideas (Neuman, 2005) This study focused on investigating brand loyalty based on theoretical part that had mentioned in chapter 2 Since the researchers used theory and made a survey by quantitative approach in this thesis, it fulfilled the requirements of descriptive approach, therefore, this thesis used descriptive research approach to analyze data Bryman and Bell (2011) defined quantitative research concerned with the measurement and analysis of relationships between variables rather than processes It expresses the data in the form of numbers and analyzes the results of statistics Quantitative research is used to quantify data and generalize results, measure the incidence of various views of chosen sample

Therefore, the quantitative researchers use mathematical models and statistical tables to relate to the research in transpersonal terms To measure up the descriptive research approach and approve the theory, numerical data is needed This study used quantitative research approach complemented with a questionnaire in order to find out what factors brand loyalty of consumers

3.3 Measurement

Quantitative research

All measurements were carried out by the statements adopted from previous studies and a point Likert type scale ranging from (1) Strongly Disagree to (5) Strongly Agree The service quality measures consist of physical quality and staff behavior statements adopted from Ekinci

5-(2001) and Madanoglu (2004) and Parasuraman et al (1988) Measurement of ideal congruence used the method introduced by Sirgy et al (2000) and later used by Back (2005) which suggests that processing self-congruence is global, direct and not dimension-based

self-After reading this direction, consumers responded the three self-concept statements to register their ideal self-congruence Brand identification measurement was carried by organizational identification measures (Mael & Ashforth, 1992) Consumer satisfaction was carried by Westbrook and Oliver's (1991) with four statements Finally, brand loyalty was operationalized

by four statements taken from Bloemer, De Ruyter, and Wetzels (1999) and Zeithaml, Berry, and Parasuraman (1996) and (Kayaman & Arasli, 2007)

Table 3.1 Measurement scale

A Service Quality: Physical Quality

Ekinci (2001) and Madanoglu (2004)

1 This brand has modern-looking equipment

2 This brand’s facilities are visually appealing

3 This brand gives you a visually attractive room

4

Materials associated with the service (such as menus,

furniture) are visually appealing

Madanoglu (2004) Parasuraman

et al (1988)

1 Employees of the hotel listen to me

2 Employees of the hotel are helpful

3 Employees of the hotel are friendly

4 Employee of the hotel give prompt service to the patrons

1

The typical guest of this brand has an image similar to how I

like to see myself

1

Would you agree to say “I am satisfied with my decision to

visit this hotel”?

2

Would you agree to say “My choice to stay at this hotel was

the wise choice”

3

Would you agree to say “I think I did the right thing when

choose to stay in this hotel”

4

Would you agree to say “I feel that my experience with this

hotel has been enjoyable”

1

I usually use my favourite hotel/restaurant as my first choice

compared to other hotel brands

Ruyter, and Wetzels (1999) and Zeithaml, Berry, and Parasuraman (1996) and (Kayaman & Arasli, 2007)

2 Next time I will stay in this brand

3

I’m willing to pay high to stay in this hotel even the other

hotel has the same quality

4 I will recommend this brand to someone who seeks my advice

3.4 Sample Selection

The sample size of this research is 230 people As convenience samples are generally the cheapest and easiest to conduct Convenience sampling is most often used during the exploratory phase of a research project and is perhaps the best way of getting some basic information quickly and efficiently So, convenience sampling was used to collect data 230 consumers are picked out randomly from the internet, organization, forum relating to Hotel industry Besides, the questionnaires will be sent to travelers who the researcher got information from two travel agencies that they used to stay in well-known hotels

Pilot test results

Measurement scales of pilot test were tested through two steps At the first step, a focus group interview with sample of five consumers who used to stay at three to five stars hotel in Ho Chi Minh City The component Staff behavior was carried by Ekinci (2001) and Madanoglu (2004) with three statements and Parasuraman et al (1988) with last two statements In the research of Parasuraman et al (1988) has eight statements relating to staff behavior but in this study has only two of them because six of them has the same meaning or unclear meaning with the first three statement

The next step used quantitative research with sample n= 30 These scales were modified by using two methods: (1) Cronbach’s alpha and (2) exploratory factor analysis (EFA) Observed variable had Cronbach’s alpha less than 0.7 and factor loading less than 0.4 in EFA (Gerberg &Anderson,

as cited in Nguyen & Nguyen, 2008) would be removed After modifying scales, remaining observed variables would be used for main survey

Table 3.2 Cronbach’s alpha of pilot testing

Scale Mean if

Item Deleted

Scale Variance if Item Deleted

Corrected Total Correlation

Item-Squared Multiple Correlation

Cronbach's Alpha if Item Deleted

In general, extracted variance was acceptable because factor loading of all observed variables were more than 0.5 Thus, no variables were removed All observed variables had factor loading

on the same factor compare with original scale Reliability and validity of all scales were accepted to conduct the main survey

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CHAPTER 4

DATA ANALYSIS AND RESULTS

This chapter presents the descriptive of collected data The reliability and validity of data will be assessed by using Cronbach’s alpha and EFA After that, the hypotheses will be tested by the collected data Consequently, this chapter includes four parts: descriptive analysis, measurement assessment, regression, hypotheses testing

4.1 Descriptive Analysis

A sample of 183 shoppers includes 73 men (40 per cent) and 110 women (60 percent), aged from

16 to over 36 years old In terms of income, the majority of shoppers had a monthly income of VND 11,000,000 – 15,000,000 with four percent All respondents used to stay in three to fivestars in Ho Chi Minh City

Table 4.1 Descriptive Statistic of Sample

Frequency Percent

Valid Percent

Cumulative Percent GENDER

Corrected Item – Total Correlation values of all variables were archived with values greater than 0.3 which indicates that the items form a scale that has reasonable internal consistency reliability

Cronbach’s alpha of Physical quality

Factor has four items, the Alpha of factor was 0.883 and the Corrected Item-Total Correlation of each item are achieved with values greater than 0.3, which indicates that the items form a scale that has reasonable internal consistency reliability

Table 4.2 Cronbach’s alpha of Physical quality

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Reliability Statistics

Cronbach's Alpha

Cronbach's Alpha Based

on Standardized Items N of Items

Total Statistics

Scale Mean

if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Squared Multiple Correlation

Cronbach's Alpha if Item Deleted PQ1 11.1749 4.563 794 632 829 PQ2 11.1093 4.504 775 605 838 PQ3 11.0765 5.555 699 493 870 PQ4 11.1311 4.851 732 543 854

Cronbach’s alpha Staff behavior

Table 4.3 Cronbach’s alpha of Staff behavior

Reliability Statistics

Cronbach's Alpha

Cronbach's Alpha Based

on Standardized Items N of Items

Squared Multiple Correlation

Cronbach's Alpha if Item Deleted SB1 15.1421 4.760 728 547 850 SB2 15.1913 4.551 730 542 849 SB3 15.0656 5.095 638 426 870 SB4 15.3279 4.452 735 562 848 SB5 15.1202 4.667 732 551 848

Factor has five items, the alpha factor was 0.879 and the Corrected Item-Total Correlation of each item are achieved with values greater than 0.3, which indicates that the items form a scale that has reasonable internal consistency reliability

Cronbach’s alpha of Ideal self-congruence

Table 4.4 Cronbach’s alpha of Ideal self-congruence

Reliability Statistics

Cronbach's Alpha

Cronbach's Alpha Based

on Standardized Items N of Items

Squared Multiple Correlation

Cronbach's Alpha if Item Deleted ISC1 6.9126 2.344 748 580 873 ISC2 6.8142 1.943 844 713 789 ISC3 6.8743 2.319 767 616 857

Factor has three items, the alpha factor was 0.889 and the Corrected Item-Total Correlation of each item are achieved with values greater than 0.3, which indicates that the items form a scale that has reasonable internal consistency reliability

Cronbach’s alpha of Brand identification

Table 4.5 Cronbach’s alpha of Brand identification

Reliability Statistics

Cronbach's Alpha

Cronbach's Alpha Based

on Standardized Items N of Items

Squared Multiple Correlation

Cronbach's Alpha if Item Deleted BI1 7.4044 1.440 768 599 825 BI2 6.6885 1.754 793 629 819 BI3 6.9126 1.454 756 577 837

Factor has three items, the alpha factor was 0.877 and the Corrected Item-Total Correlation of each item are achieved with values greater than 0.3, which indicates that the items form a scale that has reasonable internal consistency reliability

Cronbach’s alpha of Consumer satisfaction

Table 4.5 Cronbach’s alpha of Consumer satisfaction

Item-Squared Multiple Correlation

Cronbach's Alpha if Item Deleted CS1 10.9836 5.049 830 722 920 CS2 11.0055 5.038 849 757 914 CS3 11.0219 5.186 845 738 916 CS4 10.8907 4.713 867 771 909

Factor has three items, the alpha factor was 0.935, very high, and the Corrected Item-Total Correlation of each item are achieved with values greater than 0.3, which indicates that the items form a scale that has reasonable internal consistency reliability

Cronbach’s alpha of Brand loyalty

This research measured the brand loyalty of consumer through 4 items and the alpha of these items was 0.850, the Corrected Item-Total Correlation of each item are achieved with values greater than 0.3, which indicates that the items form a scale that has reasonable internal consistency reliability

Table 4.6 Cronbach’s alpha of Brand loyalty

Item-Total Statistics

Scale Mean

if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Squared Multiple Correlation

Cronbach's Alpha if Item Deleted BL1 11.4918 3.482 703 501 804

BL2 11.4699 3.646 686 474 811

BL3 11.4426 3.611 647 418 828

BL4 11.5464 3.535 723 528 795

4.2.2 Exploratory factor analysis

Research model has six group of items (variables) with 23 observed variables, affecting brand loyalty in hotel industry in Ho Chi Minh city After testing the reliability of the scale item-groups, researcher conducted exploratory factor analysis (EFA) through the Principal Axis Factoring, using the Promax rotation method to analyze 23 observed variables Using KMO (Kaiser-Meyer-Olkin) and Barlett’s test method to measure the compatibility of the survey and the results After running, the results showed that the variables of all factors had high loading in that factor and the variables of each factored measured only one component The EFA results showed in these below table proved that the KMO values of all factor were bigger than 0.8 at the Barletlett’s Test of Significant 000 < 0.05 Therefore the results were satisfied the conditions of EFA

4.2.2.1 EFA analysis results for measurement scales of independent factors (physical quality, staff behavior, ideal- self congruence, brand identification)