Luận văn thạc sĩ UEH customer based brand equity a study of trung nguyen coffee in viet nam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

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Nguyen Thi Kim Nhung

ID: 22110042

CUSTOMER-BASED BRAND EQUITY

A STUDY OF TRUNG NGUYEN COFFEE IN VIETNAM

MASTER OF BUSINESS (Honours)

SUPERVISOR: Prof. LE NGUYEN HAU

HO CHI MINH CITY - August, 2014

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ACKNOWLEDGMENTS

This research could not have been done without the help and contributions

of many people that I am very thankful to. First of all, I would like to express my

deepest acknowledge to my supervisor, Professor Le Nguyen Hau for his help,

valuable advices and recommendations. Especially during the whole time of doing

thesis, his patient helps me to get through all mistakes in my work. Moreover, he

also teaches me much more than just finishing this thesis. Again, I want to say

“Thank You Very Much” to my advisor for all he has done for me.

I would like to use this chance to express my earnest appreciation to the

professors and lecturers of International School of Business (ISB) – UEH for their

guiding me in during my academic years at ISB. I have been assisted very much in

the completing of this thesis by the knowledge and skills that I have learned.

Furthermore, I would like to appreciate the contribution of people who help

me complete the survey questionnaires to share their valuable time and support me

with useful information for completing this thesis.

I also want to say “Thank You” to my friends, other senior students at ISB,

who are doing thesis at the same time with me, for your supporting and

encouragement during this difficult period of time and two years studying as well.

Most of all, we like to thank our families and friends for their unconditional

support and understanding during the research process.

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TABLE OF CONTENTS

CHAPTER I INTRODUCTON ....................................................................................1

1.1. Background of research ...............................................................................................1

1.2. Research problem and purpose.....................................................................................3

1.3. Research objective.......................................................................................................3

1.4. Scope of the study .......................................................................................................4

1.5. Contribution of the study .............................................................................................5

1.6. Organizational structure of the study............................................................................5

CHAPTER II LITERATURE REVIEW & THEORETICAL FRAMEWORK ........7

2.1. Concepts & Definitions................................................................................................7

2.1.1. Overview of branding...........................................................................................7

2.1.2. Brand equity ........................................................................................................9

2.1.3. Customer based brand equity............................................................................. 11

2.1.4. Aaker’s Brand Equity Model .............................................................................. 12

2.2. Research model ......................................................................................................... 15

2.2.1. Brand awareness ............................................................................................... 16

2.2.2. Brand association .............................................................................................. 17

2.2.3. Brand loyalty ..................................................................................................... 18

2.2.4. Perceived quality ............................................................................................... 19

CHAPTER III RESEARCH METHOD.....................................................................21

3.1. Research methodology............................................................................................... 21

3.2. Quantitative approach................................................................................................ 21

3.3. Questionnaire design ................................................................................................. 22

3.4. Sampling ................................................................................................................... 27

3.5. Pilot test .................................................................................................................... 28

3.6. Data collection........................................................................................................... 28

3.7. Data analysis ............................................................................................................. 29

CHAPTER IV DATA ANALYSIS & DISCUSSIONS ..............................................32

4.1. Respondent demographic profile................................................................................ 32

4.1.1. Sample demographic.......................................................................................... 33

4.1.2. Central tendencies measurement of construct..................................................... 34

4.2. Evaluation and refinement of measurement scale ....................................................... 36

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4.2.1. Reliability analysis............................................................................................. 36

4.2.2. Exploratory factor analysis................................................................................ 39

4.2.2.1. EFA results for measurement scales of independent factors.................................... 40

4.2.2.2. EFA results for measurement scales of dependent factor – brand equity.................. 42

4.2.2.3. Testing the relationship of independent factors and dependent factor...................... 42

4.3. Hypothesis testing ..................................................................................................... 44

4.4. Discussion ................................................................................................................. 48

CHAPTER V CONCLUSIONS & RECOMMENDATION ......................................49

5.1. Conclusion ................................................................................................................ 49

5.2. Recommendation....................................................................................................... 50

5.2.1. Perceived quality ............................................................................................... 51

5.2.2. Brand loyalty ..................................................................................................... 53

5.2.3. Brand association .............................................................................................. 55

5.3. Limitation and future research ................................................................................... 57

REFERRENCES .........................................................................................................59

APPENDIX A....................................................................................................................... 65

APPENDIX B....................................................................................................................... 71

APPENDIX C ..............................................................................................................78

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LIST OF TABLES

Table 3.1: Measurement scale ........................................................................... 23

Table 4.1: Demographic profile ....................................................................... 30

Table 4.2: Descriptive statistics ........................................................................ 33

Table 4.3: Reliability Statistics ......................................................................... 37

Table 4.4: Rotated component matrix ................................................................ 41

Table 4.5: Cronbach‟s alpha after EFA .............................................................. 42

Table 4.6: Pearson correlation ........................................................................... 43

Table 4.7: Model summary ................................................................................ 45

Table 4.8: The coefficients ................................................................................. 46

Table 4.9: The hypotheses testing result ............................................................. 47

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LIST OF FIGURES

Figure 2.1: Brand equity ................................................................................... 10

Figure 2.2: Aaker‟s Brand Equity Model .......................................................... 14

Figure 2.3: Research model ................................................................................ 15

Figure 3.1: Research design ............................................................................... 19

Figure 4.1: Final model of the study.................................................................... 44

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ABSTRACT

Brand equity is one of the important concepts in brand management, as well

as in business practice and academic research. Developing and properly managing

brand equity has been emphasized as an important issue for most firms. Along

with coffee brand in Vietnam, the competition of coffee shop market is fierily and

fragmented due to numerous brands strike for consumer attention. This study uses

Trung Nguyen coffee as example to explore the impact of brand equity in

Vietnamese coffee shop market.

The research is to develop a model to measure the customer based brand

equity of Vietnamese Coffee and study the impacts of the brand equity‟s four

dimensions on brand equity. The findings in this paper with supporting of Trung

Nguyen Coffee‟s case study were found that only three dimensions of brand equity

(perceived quality, brand loyalty and brand association) have positive effect on

Brand equity.

The study shows that Trung Nguyen Coffee‟s managers and executives

should put their efforts primarily on building brand loyalty, brand association and

perceived quality in designing the marketing and brand building strategies.

This study also provides important insights about the understanding of

Hochiminh City consumers‟ perceptions of brand equity and its dimensions in the

premium roasted coffee market.

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CHAPTER I

INTRODUCTON

1.1. Background of research

According to data from MARD (2013), Vietnam exported 14.5 million bags of

green coffee in the first seven months of 2013, an increase of 3 percent over the previous

year, designating Vietnam as the second largest coffee exporter in the world. Moreover,

Vietnam is also known as a coffee country with a long-standing coffee culture with first

appeared in 1857. Gradually it becomes a popular and important drink in the lives of

many Vietnamese people. Nowadays, many coffee brands, both foreign and domestics

have been penetrating all over Vietnam to satisfy the huge demand for coffee of

Vietnamese people.

Due to globalization, the domestic coffee market has also become very attractive

to foreign investors and many famous international coffee brands have appeared and

developed in Vietnam, such as NYDC Coffee, The Coffee Bean and Tea Leaf, Angel In

Us Coffee, Starbucks coffee, etc. which make the domestic roasted coffee market become

more competitive than ever. Confidence with many years‟ experience in producing

roasted coffee, Vietnamese coffee brands like Trung Nguyen coffee, Highland coffee,

Gogo coffee, etc. have tried to break into this market. Notwithstanding, most companies

have admitted it was difficult to increase even a small market share. The competition of

coffee market in the segment of premium roast coffee is now moving from price and

product‟s quality to brand building, particularly, the branding and product image are

becoming more and more significant to Vietnamese customers. So, brand equity is

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recognized as an important part that assisting Vietnamese coffee marketers or companies

increase competitive advantage and assist to make management decision.

Beginning with the application of trademarks to products for the purpose of

product differentiation, brands have developed and become one of the key success factors

in firms achieving competitive advantage though differentiation (Wood, 2000). Brands

create added value for both firms and customer. According to Aaker (1991), brands play

a key role in increasing the value of products and protecting the product from being

imitated by competitors. If Vietnamese roasted coffee brands could deeply understand the

importance and get benefit from brand equity, they get greater profit and loyal customers.

These circumstances motivated me to investigate the relationship between selected brand

equity‟s dimensions and brand equity.

Founded by Dang Le Nguyen Vu in 1996, Trung Nguyen coffee was a small

business processing coffee in Ban Me Thuoc city. At that time, Vietnam had risen once

again to be one of the leading coffee producers in the world, but almost solely producing

"green" coffee (unroasted beans) that were sold on the commodity market. This resulted

in no control over the final coffee quality or prices. In 1998, the first Trung Nguyen

coffee shop was officially launched in Ho Chi Minh City. In 2001, Trung Nguyen coffee

shops were launched in all provinces. Up to now, Trung Nguyen coffee has more than 50

coffee shops operating throughout Vietnam. Trung Nguyen coffee is confident in the

future of sustainable development with the emergence and continuous growth of the

country. At the beginning, Trung Nguyen Coffee has recognized the importance of

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branding and always tried to build its brand to become a high-class brand of coffee for

customers who have high income.

1.2. Research problem and purpose

Competition is the most fundamental factor that directly affects the brand

emergence and growth (Laaksonen, 1994). Today, the competition is fiercely in all fields

due to the threat of new entrances and rivals, coffee shop market are not an exceptional.

The company always try to outperform their competitors to grab a greater share of

market, thus, an appropriate marketing strategy is necessary. Here, brand equity is a

concept in marketing field which plays an important role that affects developing business

for a company.

When the market is full of competition, the brand, the style and the quality of a

product are vital points in customer‟s selection. Vietnamese roasted coffee brands have

spent much money on producing mass of products, reducing prices, and introducing

promotional campaigns to attract customers but they forget that customers always choose

famous, trusted and reliable brands. Up till now, many domestic coffee enterprises cannot

build their own unique brand in an effective way associated with their roasted coffee.

Most of them have not yet achieved national recognition.

1.3. Research objective

The main purposes of this study are to understand of the brand equity concept

employ in marketing. Especially, to measure and examine the effectiveness of brand

equity dimensions, i.e., brand awareness, brand association, perceived quality and brand

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loyalty on consumer based brand equity creating and also determine what dimensions of

customer based brand equity have positive effect on the brand equity of Trung Nguyen

Coffee. The finding of this paper will help Vietnamese‟s coffee company to create

positive brand equity in order to increase the development of their future business growth

and profit, by answering follows questions:

 What dimensions of brand equity have positive effect on perception of Vietnamese

coffee brand with representative is Trung Nguyen coffee?

 How much they affect the brand equity of Trung Nguyen coffee?

 What is the current brand equity level of Trung Nguyen Coffee?

 How to improve the current brand equity level of Trung Nguyen Coffee?

1.4. Scope of the study

The research is conducted in Ho Chi Minh City and on customers of Vietnam

coffee brands and mainly focused on Trung Nguyen Coffee. Moreover, this research just

focuses on some office buildings that have large number of officers who are the potential

customers of Vietnam‟s coffee brand. Thus the findings of this research cannot illustrate

the overall perception of entire customers in Vietnam about brand equity of Vietnam„s

coffee brand.

This research may not reflect the opinions of all Vietnam‟s coffee brand customers

in Ho Chi Minh City as the survey was mostly conducted at some office buildings in

some districts. Due to lacking of time and experience to analyze and research the real

problem, there could be some biases that might affect the results.

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1.5. Contribution of the study

The results of this study can help the managers of Vietnam‟s coffee brand

especially of Trung Nguyen coffee measure the current brand equity level of their brand

under the view of customers and figure out current problems in their branding strategies.

It also helps to come up with scientific solutions to improve the brand equity of

Vietnam‟s coffee brands and gain competitive advantages. The questionnaires designed

in this study can be applied in practice to support to the customer survey system of

Vietnam‟s coffee brands.

Moreover, the research may help Vietnam‟s coffee brands have a better

understanding of the influencing level of brand equity on customers. The results of this

study will not only be considered as a reference for similar coffee brands to review their

current services and performance, but it will also be the reference for further researches

on the related fields or sectors.

1.6. Organizational structure of the study

The paper is organized as follows. First, introduction part includes general

background of the research, research problems and purposes, scope of the study,

significant, and structure of the study. Second section is the literature review which

shows up the definition and conceptual framework of the terms used as well as related

and previous studies. Third, research methodology presents an overview of the approach

used to conduct the research. Next, data analysis and discussion chapter is for analyzing

and discussing about the results based on the data collected. Then, conclusion and

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