Impact of soft drinks promotion strategies on brand equity in vietnam

For example, Aaker 1996 said that brand value is formed from four main components, namely brand awareness, perceived quality, brand loyalty and brand associations, whereas Keller 1993 d

IMPACT OF SOFT DRINKS’ PROMOTION

STRATEGIES ON BRAND EQUITY IN VIETNAM

NGUYEN TUAN DAT

Bulacan State University

City of Malolos, Bulacan

June 2015

NGUYEN TUAN DAT

Dissertation Doctor of Philosophy in Business Administration

2015

ii

APPROVAL SHEET

It is partial fulfillment of the requirements for the degree of Doctor of

Philosophy in Business Administration This dissertation entitled "IMPACT OF SOFT DRINKS’ PROMOTION STRATEGIES ON BRAND EQUITY IN VIETNAM " had been prepared and submitted by Nguyen Tuan Dat who is hereby

recommended for oral examination

VICTORIA P VALENZUELA, D.P.A

Dean, Graduate School

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ACKNOWLEDGEMENT

I would like to sincerely thank the students (University of Economics, Ho Chi Minh City, University of Finance and Marketing and University of Economics and Law) who have been support my research through conferences and group interviews

I hope that this study will be a source of useful reference for macroeconomic policy makers, Businesses, financial institutions in order to conduct strategic planning, customer and market planning The difficulties as well as the opportunities and challenges in the coming period will become valuable reference in setting the macroeconomic policies and strategic planning for product development, price policy, customer relations policy of Businesses

Finally, I would like to thank my family and my colleagues helped me and they have enabled me to complete this work

NGUYEN TUAN DAT

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ABSTRACT

The general purpose of the research: to find the dimensions of the brand equity for soft drinks in the Vietnam market On the other hand, this study test the impact of marketing communnication and price promotion on them; adjust the observed variables to measure the research concept; suggesting policies to increase brand equity for soft drinks market in Vietnam

Based on the theoretical model of the brand value of the author Aaker (1991, 1996) and the scale of research by author Yoo et al (2000), Washburn and Plank (2002), the model value brand and the observed variables used to measure the research concept was conceived The author has built 06 hypothesized relationship shown the impact of advertising and promotion to the brand value components (hypothesis H1 to H6 hypothesis) and 02 express hypothesis relationship components brand value (H7 and H8)

Research methods used to test the model and the research hypothesis is mixed approach (combining qualitative quantitative) includes 03 steps: (i) qualitative research, (ii) research Preliminary volume and (iii) the official quantitative research

Qualitative research was conducted focus group discussions with the respondents The study results showed that brand awareness is measured by 04 observed variables; brand associations as measured by 07 observed variables; Perceived quality is measured by 09 observed variables; brand loyalty is measured by 11 observed variables; Promotion price is measured by 06 observed variables; and advertising is measured by 07 observed variables

Preliminary quantitative study was conducted by direct interview 60 students

by convenient sampling method using detailed questionnaires Preliminary quantitative study to adjust and redefine the structure of the scale to cater for formal study The observed variables used in preliminary quantitative study was assessed by

02 methods: analysis methods reliability through Cronbach's alpha coefficient and factor analysis method to discover EFA The study results showed:

The observed variables PA1, PA2, PA7 used to measure factors Advertise disqualified; PQ3, PQ6, PQ9 used to measure quality feel excluded; BL1, BL6, BL9,

Limitations of my research: first, the method approach is convenient sample throught the face to face questionnaire, so will limit the reliability of the scale research; secondly, a survey of 325 respondents (students: UEH, UFM, UEL) so can not represent the overall study

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TABLE OF CONTENTS

APPROVAL SHEET ii

ACKNOWLEDGEMENT iii

ABSTRACT iv

TABLE OF CONTENTS vi

CHAPTER I THE PROBLEM AND ITS BACKGROUND STATEMENT OF THE PROBLEM 1

SIGNIFICANCE OF THE STUDY 7

RESEARCH LIMITATIONS 7

DEFINITION OF TERMS 8

II THEORETICAL FRAMEWORK REVIEW OF RELATED LITERATURES 10

BRAND EQUITY FROM THE INDIVIDUAL CONSUMER PERSPECTIVE …14

A CONCEPTUAL FRAMEWORK FOR MEASURING CUSTOMER BASED ON BRAND EQUITY 24

III METHODS OF METHODOLOGY RESEARCH DESIGN 29

POPULATION AND SAMPLE 30

RESEARCH INSTRUMENTS 31

Measuring brand association 32

Measuring perceived quality 32

Measuring brand loyalty 33

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Measuring perceived advertising 33

Measuring promotion deals 34

PILOT STUDY 34

The Pretest study design 34

The result of pretest study 34

MAIN SURVEY 369

CONCLUSION 40

IV PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA 41

SAMPLE PROFILE 41

Final Sample 41

Characteristics of sample 41

Descriptive Statistics 43

Construct validity 44

Cronbach’s Alpha 44

Exploratory factor analysis 47

Confirmatory factor analysis 51

STRUCTURAL EQUATION MODELING IN THEORICAL DEVELOPMENT AND TESTING 57

Introduction to structural equation modeling 57

Hypothesis testing 59

SUMMARY AND CONCLUSIONS 62

V SUMMARY, CONCLUSION AND RECOMMENDATIONS 63

LIMITATIONS OF THE RESEARCH 66

FURTHER RESEARCH 67

SUMMARY 68

REFERENCES 70

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QUESTIONNAIRE 74 CURRICULUM VITAE 78

1

CHAPTER I THE PROBLEM AND ITS BACKGROUND

STATEMENT OF THE PROBLEM

In the context of increasingly rapid globalization together with progress of science and technology, core components or utilities of the product are no significant difference; thus, the brand is an element, which makes products distinguished It is the brand that increases competitive position for enterprises (Aaker 1996) Therefore, branding issue is paid attention to for a long timeby many countries, especially developed countries, (through multinational corporations) with successful lbrands with high value For example, according to the evaluation and grading of the Interbrand organization (2011), three leading brands of the world in 2010 (US dollars) include: Coca-Cola – 70,452 billion, IBM - 64,727 billion, Microsoft - 60,895 billion

In Vietnam, after the entry of multi-national corporations with the strong brands in the early 1990s such as: Rejoice, Pantene, Head & Shoulder, Tide (Procter & Gamble); Sunsilk, Clear, Omo (Unilever); Pepsi, Aquafina, 7ups (PepsiCo); Coca-Cola, Splash (Coke); branding is an issue of interest However, during this period, marketing and branding activities focus on multinational corporations through joint ventures, and the Vietnam companies only emphasize on production and promotion to increase sales

By the early 2000s, Vietnam companies have become interested in marketing and branding activities Typically, in this period, some companies built the brands with certain success such as Tan Hiep Phat Company (THP) with brand of numberone energy drinks; Trung Nguyen Corporate with Trung Nguyen coffee brand; Vinamilk company with Vinamilk brand Then, several other companies have also focused on branding activities, including Kinh Do Corporation (AFC Cake); Bibica (Hura cake);

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Pham Nguyen Company (Phaner Cake); Tribeco Company (Tribeco soy milk); Chuong Duong Company (Chuong Duong soft drinks); etc Currently, about 10 years after the Vietnam companies’s promotion for implementation of branding (2001-2010) and through the media as well as some observation of some companies, it can

be said that branding is necessary, but not every company is successful in building brand, and in the company, no all brands are successful Some Vietnamese brands are built into the strong brands, favorite brands, even brands are recognized as the national brands, thus companies owning such brands create their solid positions on the market such as: Lemon Green tea (0o), Number One, Dr Thanh (THP); Trung Nguyen G7 (Trung Nguyen); AFC (Kinh Do); Vinamilk, Dielac (vinamilk); Chinsu (Masan) Besides, many brands are still not successful These brands had been invested a lot but still not effective for the owning companies, even in some cases, unsuccessful brands gradually disappeared from the market, namely Laser beer (THP Company), Saigon Special Beer (Saigon beer company), Trio juice, X2 energy drinks (Tribeco), etc Thus, in the context of global competition, branding is an essential issue, even vital to the Vietnam companies now But the reality has proven that not all company can build successful brands, especially the companies are active in the consumer market, including the market of fast moving consumer goods because this market typically has large market size, growth rate, along with the rapid economic - social development Therefore, this market has often involvement of multinational corporations and the new investors with strong potential In addition, in the market of fast moving consumer goods, the soft drink industry is one with large market size, fast growth, dynamic and fierce competition due to the involvement of leading corporations in the industry (Coke, Pepsi, Nestle) Specifically, according to report of the Datamonitor organization (2010), alone the soft drinks market such as bottled

3

water, bottled tea and coffee, juices, carbonated soft drinks, functional soft drinks categories, the market size reached 786.4 million USD in 2009 and it is forecasted to increase to 1119.8 million at the end of 2014, while for the hot drink market such as hot coffee, tea and other hot drinks, the market size in 2009 was 708.4 million and it

is forecasted to rise to 853.4 million by the end of 2014 Thus, in the soft drinks market, branding issue has attracted great attention in research and practical use, but

in fact, not all companines are successful in branding

Besides, in term of theoretical aspect, though there are many views on the brand as well as ways of branding and evaluating effectiveness of branding, one popular view with high consistency, which are paid attention by many researchers is that evaluatation of branding effectiveness is implemented by the fact that brand can

influence consumer perceptions, also known as a strong brand, and to build a strong brand, it is necessary to create and continuously improve the brand value (Aaker

1996) In addition, Aaker (1991) also confirmed that the way to build brand value is the construction of a strong brand through a strategy of product differentiation as compared to competitive brands However, the next issue is the different views on components of brand value For example, Aaker (1996) said that brand value is

formed from four main components, namely brand awareness, perceived quality,

brand loyalty and brand associations, whereas Keller (1993) defined that brand value

is brand knowledge consisting of two components: brand awareness and brand

impression In addition, in a study on the influence of marketing mix components to

brand value, Yoo (2000) said that brand value includes perceived quality, brand

loyalty and brand awareness combined with associations; but Villajero-Ramos &

Sanchez-Franco (2005) assumed that the brand value includes brand awareness,

perceived quality, brand loyalty and brand impression in his research and his point of

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view was also inheritted and confirmed by Melinda Hendriana Amarette & Evelyn (2011) In Vietnam, in a study on brand value in the consumer market, Nguyen Dinh Tho and Nguyen Thi Mai Trang (2002) reconstructed components (scale) of brand

value including brand awareness, brand desire, perceived quality, and brand loyalty

Thus, despite the high consistency on the meaning of branding is to aiming at creating and increasing brand value, the definitions of brand value are many different This is one of the obstacles for marketing administrators in branding, especially with the marketing administrator in developing countries like Vietnam because of limited foundation of scientific knowledge and experience on branding

The next problem is the process of branding to create brand value associated

with marketing communication (Aaker 1996), but marketing communication is a

multi-component concept and in each component has the sub- components Almost no

standard definition or a study in the world can measure the concept of marketing

communication and its influence in creating brand value but there have been many

studies on influence of a number of factors with marketing communication function to the components of brand value These studies have contributed to create scientific

knowledge about marketing communication and relationship between marketing

communication and brand value However, the studies have had their limitations In

addition, the findings in creation of new scientific knowledge are virtually untested in Vietnam, which is a market with its own characteristics due to the national economic - social development policies and ways, demographic characteristics, natural conditions, basic technology and science foundation For example, in the work "Marketing Management" by Kotler (1994, 1996) put forward the views of marketing mix

including four components: product, price, sales and promotion, which emphasizes

on promotion component including advertising, public relations, special offers,

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personal offers and direct marketing (called the promotion mix) It is the media

component for branding and sales support, but there is no confirmation through official researches on media roles of remaining components in creating the brand value Meanwhile, studies on the influences of marketing mix or marketing communication to the brand value, most researchers use only some components of the

promotion mix or some component of marketing mix as the concept of "marketing

mix" and "promotion mix" of Kotler Specifically, in the study of Yoo & Associates (2000), measurement of the impact of marketing mix components to the brand value

only limited in measurement of impacts of some components such as price, store

impression, sales coverage, advertising and price promotions but in fact, the marketing mix includes many other components, such as product characteristics, public relations and direct marketing (Kotler, 1994, 1996), and advertising concepts

are only mentioned in general while advertising concepts can be understood as television advertising, newspaper advertising, advertising signs, advertising items at points of sale In addition, the study of Yoo was only done with three product categories including sports shoes, shooting film and color television and just be done

in a market with strongly developed economy (United States) Therefore, the scientific knowledge that Yoo and his colleagues discovered in this study need to be tested further in other product sectors and in the market with completely different characteristics compared to U.S market to increase the representation and add significant information Or, the Ramos and Franco (2005)’s study on the impact of marketing communications to the brand value only measured the impact of these two

components namely advertising and price promotions to brand value and only done

with the washing machine product in the Spanish market, and then the study was

in this industry, it is necessary to do more researches to find out and test the influence

of the components with function of marketing communications to create brand value

in Vietnam In addition, in reality in Vietnam, there is few or even no study on the impact of marketing communication to the brand value of soft drink except for the

theme "Brand value in the consumer market" by Nguyen Dinh Tho and Nguyen Thi

Mai Trang (2002) studying the relationship between the components of brand value and effects of consumer attitudes towards advertising and promotion on the components of the brand value with shampoo product

In summary, from the current trend of business, branding is necessary to increase the competitive position (Aaker 1996) From status of unsuccess in branding

of Vietnam soft drink companies associated with the limitations in terms of scientific knowledge relating to the brand value and the factors affecting brand value creation, it suggests a need for studies on the influence of the factors with function of marketing communications to creating brand value for soft drink products in Vietnam These studies not only contribute to the generality of the findings of the relevant studies published previously, but also add new scientific knowledge by addition of studies on

influences of community relation factor to the creation of brand value in addition to

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the influences of advertising and price promotion and researches published previously

Since then, the research topic “IMPACT OF SOFT DRINKS’ PROMOTION

STRATEGIES ON BRAND EQUITY IN VIETNAM” is proposed

SIGNIFICANCE OF THE STUDY

This research have some significance:

This study has confirmed support of the theoretical model proposed for this study The findings show that brand association, brand awareness, perveiced quality and brand loyalty are all dimensions of brand equity based on consumer for soft drinks in VietNam market

The second theoretical contribution of this study is modify the scale for mesuring this concept (concept brand equity and their dimemsions for soft drinks in VietNam market)

The third contribution of this study is that an expanded Brand Equity Creation Model to explore the relationship between selected marketing activities and dimemtions of brand equity for soft drinks in the Vietnam market

RESEARCH LIMITATIONS

Approach theoretical study: There are two principal and distinct perspectives

that have been taken by academics to study brand equity – financial and customer based (Lassar et al, 1995) Thus, author conducted research brand equity approach in

view of the consumer in this study

About the space This study focus on research and survey in Ho Chi Minh

City (the country's largest city)

About the time

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Qualitative Approach This study is performed in 08/2013 in order to investigate the Dimensions of the brand equity for soft drinks in the Vietnam market; and to develop the measurement of brand equity and Dimensions of the brand equity Qualitative approach is done by focus group with 10 students Include: 03 students of University of Economics, Ho Chi Minh City – UEH, 04 students of University of Finance and Marketing - UFM, 03 students of University of Economics and Law- UEL

The pretest study is performed in 03/2014 There were 60 students (UEH, UFM, UEL) contacted in various classrooms to participate in the survey in order to develop and modify the scale for measuring these concepts (brand equity concept and their dimensions) There are 20 students of UEH, 20 students of UFM and 20 students

of UEL The method approach is convenient sample throught the face to face questionnaire

The final study is performed in 11/2014 There were 450 students (UEH, UFM, UEL) contacted in various classrooms to participate in the survey which is well above t2006) There are 150 students of UEH, 150 students of UFM and 150 students of UEL The method approach is convenient sample throught the face to face questionnaire

DEFINITION OF TERMS

- Brand associations as “anything linked in memory to a brand” Aaker (1991)

- Brand loyalty is a deeply held commitment to rebuy or repatronize a preferred brand consistently in the future (Chaudhuri and Holbrook, 2001)

- Perceived quality is “the consumer's judgment about a product's overall excellence or superiority'” (Zeithaml, 1988)

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CHAPTER II THEORETICAL FRAMEWORK

REVIEW OF RELATED LITERATURES

Nguyen & Nguyen (2003) think that a brand is not simply a name or logo used

to differentiate a product from its competitors, but is a set of associations used to satisfy both functional and emotional demands of target customers

As a result, manufacturers consider the value of a brand very important equity

The definition of brand equity needs further investigation to understand the value of brand equity, also reviewing what really contributes to a brand value (Aaker 1991) That can explain the reason in the 1980s, brand equity was an important marketing concept – it is, on branding, one of the most topical subjects in the literature

Nevertheless, both academic and practitioner researchers’ attention are continually

attracted by the questions such as ‘What exactly is brand equity?’’ and ‘How can we measure brand equity? In other words, a consensus definition has not yet been reached

by brand equity (Woods 1998) In fact, financial and customer approaches are two

main research streams of brand equity, (Lassar et al 1995; Wood, 2000)

Inspite of in the last twenty years, brand equity being a particular interest,

what brand equity means and how a firm can measure value of a brand are still no consensus (Keller, 1993) The reason for this confusion is from a number of different

perspectives and for a number of different purposes, the brand equity has been defined (Keller 1993) Here are some of the definitions of brand equity:

The added value endowed by the brand name (Farquhar 1989)

The differential effect that brand knowledge has on consumer response to the marketing of the brand (Keller 1993)

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The differential effect that brand knowledge has on customer’s perspective (emphasizing market management), brand equity is a utility not explained by measured attribute (via conjoint measurement or rating scale), loyalty (which provides a barrier to competitive entry and sustainable advantage for the firm), and a differentiated, clear image that goes beyond simple product preference (Shocker & Weitz 1988)

Brand equity is the true differentiation that a brand has from the competition

or the worth derived by a brand from consumers (Davis & Doughlass 1995)

Evidently, the brand equity is the added value or the premium of the product to

a consumer is a common point among the above definitions that is attributable to the

brand name (Wood 2000) Furthermore, such value can be considered as the bridge

that links ‘between what happened to the brand in the past and what should happen to the brand in the future’ (Keller 2003) In term of approaches, we can divide the discussion of brand equity into two main streams Firstly, the financial approach is focused on, or company-oriented view, which focuses on the value provided to brand owners Secondly, its is the customer perspective which is defined as the relationship between the customer and the brand (Wood 2000) In details, the following section will discuss these two main streams of brand equity research

Financial approach to brand equity

In term of financial approach, brand equity is referred as a viable asset for

manufacturers (Davis & Doughlass 1995) Resulting from revenues of products with a brand name over those of unbranded ones , this asset is defined as the incremental cash flow (Shocker & Weitz 1988; Simon & Sullivan 1993) Based on the requirement to set a price when the brand is sold and the index to attract investors or stakeholders as an intangible asset on a balancesheet , the reasons for the development

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of this research stream are formed (Feldwick 1996) From a financial approach, there

are three popular methods for measuring brand equity Stock prices and brand replacement are the most common measures (Myers 2003) Future prospects of brands are reflected by the stock market thanks to adjust the prices of firms; then to capture the dynamic nature of brand equity, the movements in stock prices is used (Simon & Sullivan, 1993) In the case of new product launches, the application of the second financial method is based on brand replacement, as funds requirements combined with the probability of success in establishing a new brand (Simon & Sullivan, 1993) Based on the annual list of world-wide brand valuations, the financial world uses the third method (Ourusoff & Panchapakesan, 1993) Based on brand strength, the net brand-related profits are calculated and assigned a multiple factor by this method, defined as a combination of leadership, stability, trading environment, internationality, ongoing direction, communication support and legal protection (Ourusoff & Panchapakesan cited in Myers, 2003) This is one of the most publicised financial methods (Myers, 2003) Financial accountants generally adopted financial approach to brand equity (Wood, 2000) and works best when the information is recorded and the future market response is not strong (Barwise, 1993) Focusing on maximising short term goals is the major disadvantage of this approach (Aaker, 1992; Davis & Doughlass 1995), for the reason that the quarterly report is required by the present and future investors as a means to monitor the company’s operating performance; as a result, a large number of senior managers are not committed to long-term brand building (Davis & Doughlass, 1995) Marketing strategists and planners must move away from concentrating on short-term objectives is suggested

by Davis and Doughlass (1995, cited in Woods 1998) by incorporating strategies to somehow satisfy both short-term and long-term stakeholders For more dominant in

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the branding literature, the customer approach to brand equity, commonly referred to

as ‘customer-based brand equity’, the following section will discuss about these

Customer approach to brand equity

Customer-based brand equity dominates the literature on branding and acts as

an important concept in the business world In fact, if a brand has no meaning (value)

to the customer, it is also meaningless to investors, manufacturers or retailers (Cobb- Walgren et al 1995) Brand equity can be viewed from two main approaches: economics and customer psychology From the economic perspective, the role of credibility is viewed as a source of equity from an individual consumer (Anantachart 1998) Based on the assumption of the imperfect and asymmetrical information structure of markets, brands are used to inform customers about a product’s position and to signal that the product’s claims are credible (Erdem 1988) Therefore, by reducing consumer uncertainty, brands are seen as the reduction of information costs and the risk perceived by consumers (Erdem 1988, cited in Keller 2004, p 8) In addition to the economic perspective, there is another customer-oriented brand equity approach based on theories of consumer psychology This approach frequently adopts associative network memory models to develop theories and hypotheses (Keller 1993; Krishnan 1996; Lassar et al 1995) Brand is seen as a node in memory, linked with different associations of varying strengths, leading to the strength of attitude towards the brand (Farquhar 1989) In other words, brand equity is a function of associations that have been built and nurtured in the customer’s mind This customer psychology approach has dominated the branding literature through three main topics The first one focuses on conceptualising and measuring brand equity (Aaker 1991; Aaker 1996; Anantachart 1998; Biel 1997; Blackston 1995; Ceurvost 1994; Chisnall 1995b; Cobb-Walgren et al 1995; Farquhar 1989; Feldwick 1996; Kamakura & Russell

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1993; Keller 1993; Kim & Kim 2004; Shocker & Weitz 1988; Srivastava & Shocker 1991; Sullivan & Simon 1993; Washburn & Plank 2002; Yoo et al 2000) Even though a consensus definition and measurement has not yet been reached, some models have been widely accepted among academics and practitioners, such as the brand equity theories of Aaker (1991) and Keller (1993) This issue is discussed in further detail in Section 2.3 The second issue of customerbased brand equity research relates to building and maintaining brand equity (Kapferer 1992; Keller 2003; Yoo et

al 2000) This stream tries to answer several questions such as ‘How is brand equity created and maintained in the long run?’, and ‘What are the antecedents and consequences of brand equity?’ (Anantachart 1998) Another issue of the customer-

oriented brand equity research stream concerns how to extend brand equity (Aaker &

Keller 1990; Farquhar et al 1991; Rangaswamy et al 1993) The conceptualisation and measurement of brand equity must be the first aspects to be scrutinised before considering other management issues (Cobb-Walgren et al 1995) As a result, more attention should be paid to this topic in order to reach a common definition of brand equity (Washburn & Plank 2002; Woods 1998) Another warning is that the customers mentioned in customer-based brand equity may be either individual consumers or organisations, while most brand equity theories only focus on the

individual consumer perspective (Mudambi 2002)

BRAND EQUITY FROM THE INDIVIDUAL CONSUMER PERSPECTIVE

There has been a large amount of published research aimed at conceptualising

and measuring the construct of brand equity from the point of view of an individual consumer (Anantachart 1998) These researchers have tried to explain what brand equity should mean, as this concept has long been ambiguous and confused This section analyses and compares 22 studies which look at defining and measuring

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consumer-based brand equity from the year 1988 to date, in order to point out the similarities and differences in ideas about what brand equity really means and how to

measure it

Conceptualisation of consumer-based brand equity

Starting with one of the earliest and most popular definitions of brand equity

from the viewpoint of individual consumers, brand equity is viewed as added value reflected by increasing the attitudinal strength for a product using the brand (Farquhar 1989) The consumer attitude is described as the association between an ‘object’ and the ‘evaluation’ of that object stored in an individual’s memory A strong brand, for a consumer, is based on three essential elements: a positive brand evaluation; an accessible brand attitude; and a consistent brand image According to Martin and Brown (1990), brand equity is a brand impression which represents the whole of a consumer’s perception about that brand Sharing this argument, Blackston (1992) describes brand equity as consumer’s ideas about the brand Further, Edell (1993) supposes that brand equity is the difference between the consumer’s evaluation of a branded product and an unbranded product with the same attributes It can be said that the most widely accepted definition of consumer-based brand equity emerges when the consumer is familiar with the brand and holds some favourable, strong and unique brand associations in memory (Keller 1993) Furthermore, Keller defines brand equity

as the differential effect of brand knowledge on the consumer response to the marketing of the brand in which brand knowledge is conceptualised, based on an associative network memory model in terms of two components, brand awareness and brand image (Keller 1993) Thus, according to this definition, a ‘brand is said to have positive (negative) customer-based brand equity if consumers react more (less) favourably to the product, price, promotion, or distribution of the brand than they do

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to the same marketing mix element when it is attributed to a fictitiously named or unnamed version of the product or service’ (Keller 1993, p 8) In order to analyse and identify the key components of consumer-based brand equity among current brand equity theories, an overview is depicted in Tables 2.1 which summarise the 18 studies

on conceptualising and measuring consumer-based brand equity

Table 2.1 Consumer-based brand equity concept Year Author Dimemtions of brand equity Research context

2000 Yoo, Donthu,

and Lee

Brand awareness/Brand association; Perceived quality;

Brand awareness; Brand Trust;

2008 Rosa and

Hernan Awareness; Value; Trust; Loyalty

Online companies in Australia

2010 Chen and Tseng Brand awareness; Brand Image;

Perceived quality; Brand loyalty Airline in Taiwan

Brand awareness; Brand Image;

Perceived quality; Brand loyalty Banking service in VN

2011

Rezaie

Dollatabady và

Askarzadeh

Brand awareness; Brand Image;

Perceived quality; Brand loyalty Sift drinks in Iran

2013 Saydan, R Brand awareness/Brand Image;

Perceived quality; Brand loyalty Dishwasher in UK

(Source: The author)

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Twenty concepts are listed as the components of consumer-based brand equity These concepts can be seen from different perspectives For example, brand equity could be considered from both quantitative and qualitative aspects, or its

components could be divided into two groups, attributes-based or non-attributes

based Furthermore, some consumer-based brand equity models are more suitable to lowinvolvement products, while others are considered to relate more to high- involvement products Firstly, the quantitative and qualitative perspectives of brand equity are cited as the hard and soft sides, respectively (Biel 1997) The quantitative dimensions are relevant to brand value, which is the bottom line of business, or reflected as the result of management’s ability to leverage its brand to provide profits for their company (Anantachart 1998) These dimensions include distribution coverage (Srivastava & Shocker 1991), performance (Lassar et al 1995) and physical features (Kapferer 1992) On the other hand, most dimensions of consumer-based brand equity are on the qualitative or soft side, which include perceptions and behaviours of consumers, that initiate equity for a brand (Anantachart 1998) For example, the dimensions of brand equity include brand awareness, perceived quality, brand associations and brand loyalty (Aaker 1991) and brand personality (Blackston 1995) The reason why the qualitative dimension is dominant in terms of the components of brand equity is that functional benefits and product differentiation can

be easily imitated, while it is difficult to copy the specific meaning of a brand in terms

of consumer perception Therefore, consumer-based brand equity should focus more

on the qualitative aspects Consumer-based brand equity components can also be seen from two directions: the attribute-based perspective and the non-attribute based perspective The attribute-based brand equity perspective is related to product characteristics, product benefits or both, created directly from a company’s marketing

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activities, capturing consumer perception (Park & Srinivasan 1994) This perspective includes product performance (Lassar et al 1995), physical features of the product (Kapferer 1992) and distribution coverage (Srivastava & Shocker 1991) In contrast, the non-attribute based dimensions of brand equity, which are not related to product attributes, are the intangible or psychological components (Anantachart 1998) Some examples are, brand personality (Blackston 1995; Kapferer 1992), attitude accessibility (Edell 1993; Farquhar 1989) and brand loyalty (Aaker 1991; Srivastava& Shocker 1991; Yoo et al 2000) In terms of the level of involvement of products, there are some definitions of customerbased brand equity that might be more appropriate to low-involvement products such as Holden’s (1992) model of brand equity, with the two components of brand awareness and brand preference This means that the low-involvement brand manager should only focus on increasing brand awareness and consumer preference in order to achieve a competitive advantage over other brands However, as this low-involvement product model can not be applied to a high-involvement product; other models are used to explain consumer-based brand equity in the case of high-involvement products For example, Lassar, Mitta and

Sharma (1995) conceptualised brand equity as a multidimensional construct

consisting of brand association, perceived value, trustworthiness, feeling, and performance (Anantachart 1998) Although a wide range of concepts have been conceptualised as components of consumer-based brand equity and many different approaches have been investigated in consumer-based brand equity theories, there exist some similarities among the studies listed in Table 2.1 One similarity is that consumer-based brand equity is nearly always represented as a multidimensional construct that conceptually consists of various concepts (Aaker 1991; Keller 1993; Nguyen & Nguyen 2003; Srivastava & Shocker 1991; Washburn & Plank 2002; Yoo

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et al 2000) Several definitions use a wide range of concepts to define brand equity, such as Srivastava & Shocker’s (1991) model with six components, namely, brand image, brand awareness, brand loyalty, perceived value, distribution coverage, and utility not explained by a measured attribute Some of the definitions do not clearly identify what brand equity exactly means (Ceurvost 1994; Edell 1993) The second similarity is that some concepts have been consistently used among researchers For example, brand association or brand image has appeared in almost all definitions - 17 out of 22 from this collection: (e.g.Aaker 1991; Farquhar 1989; Kapferer 1992; Keller 1993; Kim & Kim 2004; Lassar et al 1995; Martin & Brown 1990; Shocker & Weitz 1988; Srivastava & Shocker 1991; Washburn & Plank 2002; Yoo et al 2000) Half of the studies also consider ‘brand awareness’ a key component of consumer-based

brand equity: (e.g Aaker 1991; Blackston 1995; Keller 1993; Kim & Kim 2004;

Nguyen & Nguyen 2003; Pappu et al 2005; Washburn &Plank 2002; Yoo et al 2000) Furthermore, four other concepts are frequently mentioned as dimensions of brand equity: brand loyalty (Aaker 1991; Kim & Kim 2004; Shocker & Weitz 1988; Srivastava & Shocker 1991; Washburn & Plank 2002; Yoo et al 2000); brand preference (Aaker 1991; Anantachart 1998; Holden & Lutz 1992; Nguyen & Nguyen 2003; Park & Srinivasan 1994); perceived quality (Aaker 1991; Kim & Kim 2004; Martin & Brown 1990; Nguyen & Nguyen 2003; Washburn &Plank 2002; Yoo et al 2000); and trustworthiness (Blackston 1992; Lassar et al 1995; Martin & Brown 1990) There are relatively few concepts which have only been used once or twice in conceptualising consumer-based brand equity, for instance, brand evaluation (Edell 1993; Farquhar 1989), brand personality (Kapferer 1992) and commitment (Ceurvost 1994; Martin & Brown 1990)

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In summary, there are 20 concepts/constructs conceptualised as components of

customerbased brand equity from these 22 reviewed studies However, these concepts

can be classified into three main groups: association, belief and loyalty of the consumer (Feldwick 1996) Association refers to the positive image of the brand in the consumer’s perception, which is related to the needs and wants of the consumer (Feldwick 1996; Krishnan 1996; Pokorny 1995) This association is considered in terms of brand image (Farquhar 1989; Martin & Brown 1990; Shocker & Weitz 1988; Srivastava & Shocker 1991); brand association (Aaker 1991, Keller 1993, Yoo et al

200, and Pappu et al 2005); perceived quality (Aaker 1991; Martin & Brown 1990; Yoo et al 2000); perceived value (Lassar et al 1995; Martin & Brown 1990; Srivastava & Shocker 1991); physical features (Kapferer 1992); and brand evaluation (Edell 1993; Farquhar 1989) The imprint of the positive brand image in the consumer’s mind leads to the consumer’smattitude toward the brand, referred to as the ‘belief’ of the consumer (Woods 1998) This feeling is demonstrated as an affective response of brand evaluation in Farquhar’s (1991) brand equity model It is also linked to trustworthiness based on the consumers’ perceptions of the brand’s ability to consistently meet their expectations of product performance (Martin & Brown 1990) Similarly, Blackton (1992) argues that there is a brand relationship including two components of trust and customer satisfaction Acting as the key components of consumer-based brand equity, based on the feelings of consumers reflected among the 22 above-mentioned studies, brand preference and trustworthiness are frequently conceptualised as components of brand equity (Anantachart 1998; Blackston 1992; Holden & Lutz 1992; Lassar et al 1995; Martin

& Brown 1990; Nguyen & Nguyen 2003; Park & Srinivasan 1994) As a result, loyalty is considered the last step in the brand-building process, and is known as

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brand strength (Feldwick 1996) In other words, loyalty is viewed as the best outcome

a company can achieve with a strong brand (Blackston 1995) Blackston (1995) shows that consumers, with high brand loyalty, are willing to pay more for the brand and are less likely to switch to other brands when prices are rising or when competitors utilise price promotion (Woods 1998) That is the reason why brand loyalty appears as a key component in the consumer-based brand equity model (Aaker 1991; Kim & Kim 2004; Nguyen & Nguyen 2003; Shocker & Weitz 1988; Srivastava

& Shocker 1991; Washburn & Plank 2002; Yoo et al 2000) In short, customer-based brand equity, from the individual consumer perspective, is a multidimensional construct including some common components such as brand association, brand awareness, perceived quality, trustworthiness, brand preference and brand loyalty, all

of which are divided into the three groups of association, belief and loyalty This means that brand managers should aim to build a lasting positive image in the consumer’s mind This image will be imprinted into his/her attitude towards to the brand, leading to loyalty to that particular brand (Woods 1998)

Brand equity measurements

Studies regarding the measurement of brand equity can be grouped mainly in

two distinct categories As was the case with the definitions, some authors have studied the financial aspects of the brand equity measurement, whereas others have focused on the customer-based measurement issues Among the financially-oriented studies, Simon and Sullivan (1993) emphasized macro and micro approaches as an estimation technique extracting the value of brand equity from the value of the firm’s other assets They first assign an objective value to a company’s brands and relate this value to the determinants of brand equity according to the macro approach Then, the

micro approach isolates changes in brand equity at the individual brand level In a

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similar manner to Simon and Sullivan’s study, Motameni and Shahrokhi (1998) proposed a global brand equity valuation model quantifying all the components and applying the generally accepted financial techniques Among other valuation studies, Grand Metropolitan has valued newly acquired brands by determining the difference between the acquisition price and fixed assets Interbrand Group, on the other hand, has used a subjective multiplier of brand profits based on the brand’s performance along seven dimensions: leadership, stability, market stability, internationality, trend, support and protection (Keller, 1993) Customer-based brand equity measurement studies are constructed mainly on conceptual constructs proposed by management gurus While Aaker (1991, 1996) focused on four brand equity dimensions – brand awareness, brand associations, brand loyalty, perceived quality Keller (1993) adopted two basic approaches (direct and indirect) to measuring customer-based brand equity emphasizing two constructs: brand awareness and brand image The indirect approach tries to identify potential sources of customer-based brand equityties distribution channels, the effectiveness of marketing communications, and the success of brand exte by measuring brand awareness and the characteristics and relationships among brand associations The direct approach focuses on consumer response to different elements of the firm’s marketing program (Keller, 2003) Silverman et al (1999) explored the relationship between customer-based and financial/market-based brand equity measurements The overall implication of customer-based research suggests that measures of customer-based brand perceptions are accurate reflections of brand performance in the marketplace Customer-based brand equity, in this respect, is the driving force for incremental financial gains to the firm (Lassar et al., 1995)

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Dimensions of the brand equity based on customer

David Aaker (1991, 1996) thinks that brand equity based on customer have 04

dimensions: (i) Brand Awareness, (ii) Perceived Quality, (iii) Brand Associations, (iv)

Lassar & Ctg (1995) gave 05 Dimensions of brand equity: (i) Performance, (ii) Value, (iii) Social image, (iv) Trustworthiness and (v) Commitment

Sharp (1995) gave 03 dimensions of brand equity: (i) Company/ Brand Awareness, (ii) Brand Image, (iii) Relationships with customers/ Existing customer

franchise

Berry (2000): (i) Brand Awareness, (ii) Brand Meaning The majority of the conceptual studies summarized in the table 2.1

Table 2.1 Model of brand equity based on customer

Study Dimensions of brand equity based on customer

1 David Aaker (1991, 1996) (i) Brand Awareness, (ii) Perceived Quality, (iii)

Brand Associations, (iv) Brand Loyalty

2 Keller (1993) Brand Knowledge: (i) Brand awareness, (ii) Brand

Association

3 Lassar & Ctg (1995) (i) Performance, (ii) Value, (iii) Social image, (iv)

Trustworthiness and (v) Commitment

4 Sharp (1995)

(i) Company/ Brand Awareness, (ii) Brand Image), (iii) Relationships with customers/ Existing customer franchise

5 Berry (2000) (i) Brand Awareness and (ii) Brand Meaning

(Source: The author)

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A CONCEPTUAL FRAMEWORK FOR MEASURING CUSTOMER BASED

ON BRAND EQUITY

The Relationship Between Brand Equity and Brand Equity Dimensions

The multidimensional concept of brand equity takes several forms, such as favorable impressions, attitudinal dispositions, behavioral predilections (Rangaswamy

et al., 1993), loyalty, and image (Shocker and Weitz, 1988) Aaker (1991, 1996) grouped it into four categories: perceived quality, brand loyalty, brand awareness,

brand association According to Keller (2002), sources of brand equity come from brand knowledge, which can be characterized in terms of two components: awareness and association A high level of brand awareness and a set of strong, favorable, and unique brand associations in consumer memory lead to a high level of brand equity Collectively, then, brand equity can be grouped into four major dimensions: perceived quality of the brand, brand loyalty, brand awareness, and brand association These dimensions can be used to explore the findings of marketing and consumer behavior research in relation to brand equity (Barwise, 1993) This study examines these four brand equity dimensions

Perceived Quality

Perceived quality is defined as “the customer’s perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative to alternatives” (Zeithaml, 1988) Thao et al (2010) indicate that perceived quality isconsumer’s perception of the possibility that a brand lives up to his or her expectations However, the authentic quality of a brand offered by a particular provider and perceived quality do not match This is merely because consumers are no experts in this domain and thus the quality sensed by them would form the basis for their consumption (Nguyễn & Nguyễn, 2011)

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Apart from that, Nguyễn & Nguyễn (2011) suggest that a brand perceived to have high quality will evoke consumers’ feelings due to desirable features the brand offers that make them long to possess rather than any others On the other hand, as confirmed by Zeihaml (1988) as a part of brand value, the higher perceived quality, the more likely a brand is chosen instead of other competing ones

Brand Loyalty

Brand Loyalty: According to David Aaker (1991), brand loyalty is consumer’s further engagement with a brand There are two brand loyalty approaches which are based on: (i) consumer’s behavior; and (ii) consumer’s attitude (Chaudhuri & Holbrook, 2001; Kabiraj & Shanmugan, 2011)

There are 02 main approaches to brand loyatly (Kabiraj & Shanmugan, 2011) The first approach views brand loyatly as a behavier which is operationalised in terms

of repeat purchase, or purchase frequency or share of purchase (Kabiraj & Shanmugan, 2011) The second approach views brand loyatly as attitude and operationalises this as preference, commitment, buy intention, and recommedation willingness (Kabiraj & Shanmugan, 2011)

The first approach examining behavioral brand loyalty lays great emphasis on the loyalty to a brand with regard to repeat purchase or frequent use of a specific product of the brand (Chaudhuri & Holbrook, 2001; Kabiraj & Shanmugan, 2011) Per Oliver (1997), brand loyalty is considered an individual customer’s commitment

to the purchase or use of a branded product in the future despite the effects of the market’s contexts and impacts which may change his or her unusual behaviors

Definitions of attitudinal brand loyalty underscore consumer’s intentions of consuming products Rossiter & Percy (1987) stress that brand loyalty is expressed through sympathetic attitudes toward a brand and aims of using the brand over times

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Additionally, Yoo et al (2001) suggest that brand loyalty signifies the tendency of consumer’s loyalty to a brand Brand loyalty performs a key role in brand success and the more intensely brand loyalty is created, the more benefits it should bring (Nguyễn

Brand association

Brand Associations: As suggested by Aaker (1991, 1996), a brand association

is anything attached in consumer’s memory as regards the brand and brand image as a part of brand associations Keller (1993, 1998) assumes that brand associations are information on a brand existing in an individual consumer’s mind and it connotes brand meanings as for that consumer Furthermore, brand associations can be examined in all forms and attributes of a product or distinctive features of its own (Chen, 2001) Brand associations are supposed to be fundamental to purchase decisions and brand loyalty of consumers, and increase corporate value (Atilgan et al 2005) Aaker (1991, 1996) also lists such benefits provided by brand associations as

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supporting the process of collecting and retrieving information, creating brand distinction and reasons to the purchase, inspiring positive feelings/attitudes toward the brand, and providing the basis for expansion

Brand associations also create corporate value and likewise enhance brand value by assisting consumers with the differentiation of various brands, arouse positive feelings/attitudes in consumers’ minds and suggesting plausible reasons to the purchase (Tong & Hawley, 2009)

H2: Brand association is related positively to the extent to which brand awareness is evident in the product

Relationship Among Marketing Activities and Brand Equity Dimensions

According to Yoo et al (2000): price promotion and advertising which are 2 factors effects on brand equity dimemsions (perceived quality, brand loyalty, brand awareness, and brand association)

H1: Brand Awareness is related negatively to the extent to which advertising is invested for the brand

H2: Brand Associations is related negatively to the extent to which advertising

is invested for the brand

H3: Perceived Quality of brand of a brand is related negatively to the extent to which advertising is invested for the brand

H4: Brand Loyalty is related negatively to the extent to which advertising is invested for the brand

Price promotion

H5: Brand Associations are related negatively to the extent to which price promotion is used for the brand

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CHAPTER III METHODS OF METHODOLOGY

RESEARCH DESIGN

This study use a mix method research approach, incroporating both qualitative and quatitative research Qualitative research featured focus groups with 10 students (students of the UEH, UFM, UEL) The objective of this phase is to explore the dimentions brand equity and modify the scale for measuring these concept Next, pilot study is conducted with 60 respondents, based on direct interviews by means of questionnaires to evaluate the consistency and scale structure Main study is conducted with 450 respondents direct interviews by means of questionnaires to test the research model and hypotheses

Figure 3.1 Research process

POPULATION AND SAMPLE

The target population this study is the students of University in Ho Chi Minh city who are consumer of sorft drinks brand

In the frist phase, indepth interviews are conducted with 10 students (students

of the UEH, UFM, UEL) The objective of this phase is to explore the dimentions brand equity and modify the scale for measuring these concept

The pretest study with 60 participants (20 students of UEH, 20 students of UFM and 20 students of UEL) and main survey of 450 participants (150 students of UEH, 150 students of UFM, 150 students of UEL) using the strutured questionaire to

Pilot survey (n= 60)

KMO; Factor Loading;

Cumulative Variance EFA

Model and Initial questionaire

KMO; Factor Loading;

Cumulative Variance

Cronbach’s Alpha;

Corrected Item – Total Correlation

Test measurement model

Test theoretical model; hypotheses

Main survey (n=450) First draft questionaire

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collect the data Both the pretest and main survey use the convenient sampling Despite of the limitations of this non random sampling method, the method is used due to thr lack of sampling frame as well as the tight timeline and budget

Brand Selection

Four brands are included in this study: Pepsi, Coke, Tribeco (All of these soft drink brands are very popular in Viet Nam so would be easy for respondents to identify with)

Sample size

Hair et al (2006) think that the minimum sample size should be

1) Min = 50

2) N = k * total questioners (if N < Min, Min is suitable)

In this study, we have 44 questioners So we should survey N = 44*5 = 220 according Hair et al (2006) So This study was approximately 450

RESEARCH INSTRUMENTS

Measuring brand awareness

Aaker, 1991 defines brand awareness as “the ability of the potential buyer to recognize and recall that a brand is a member of a certain product category” According to Keller (2003), brand awareness plays an important role in consumer decision making by bringing three advantages; these are learning advantages, consideration advantages, and choice advantages