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CHAPTER 2. LITERATURE REVIEW AND RESEARCH MODEL

CHAPTER 2. LITERATURE REVIEW AND RESEARCH MODEL

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2.2.2. Perceived Quality
Zeithaml (1988) defines perceived quality as “the consumer’s [subjective]
judgment about a product’s overall excellence or superiority” (p.3). These
judgments may be influenced by personal product experiences, unique needs and
consumption situations. High perceived quality indicates that consumers recognize
the differentiation and superiority of the brand through the long-term experience
related to the brand. Zeithaml also identifies perceived quality as a component of
brand value; hence, high perceived quality would drive a consumer to choose the
brand rather than other competing brands. Therefore, to the degree that brand
quality is perceived by consumers, brand equity will increase.
2.2.3. Brand Loyalty
Oliver (1997) defines brand loyalty as “a deep held commitment to rebuy or
repatronize a preferred product or service consistently in the future, despite
situational influences and marketing efforts having the potential to cause switching
behavior” (p.392). Brand loyalty makes consumers purchase a brand routinely and
resist switching to another brand. Therefore, to extend that consumers are loyal to
the brand, brand equity will increase
2.2.4. Brand Association
Aaker (1991) defines brand associations as “anything linked in memory to a brand”
and brand image as “a set of [brand] associations, usually in some meaningful way”
(p.109). Brand association which result in high brand awareness, are positively
related to brand equity because they can be a signal of quality and commitment and
they help a consumer consider a brand at the point of purchase, which leads to
favorable behavior for the brand.
Considering Vietnamese consumers behaviors with female target group – in
comparison with consumer market, the body lotion brands have high level of

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branding, similar buying process and consumption of product. With all those
reasons mentioned, we recognize three common components of brand equity: (1)
brand awareness, (2) perceived quality and (3) brand loyalty. High brand equity can
help to explain that consumers can know about the brand, recognize the brand from
other brands perceive high quality and loyal to the brand in the body lotion
category
In theresearch scope, this study will not investigate how each component of brand
equity increase brand equity. Yoo et al (2000) and other researchers find that brand
name, brand loyalty, perceived quality, and brand awareness/associations are
positively related to brand equity.
Many researchers suggest that brand equity is a strategic aspect of marketing
management and can be created, maintained and intensified by strengthening on of
it components (Leuthesser, 1998, Farquhar, 1989, Nomem, 1996). Elements of
marketing communication have impact on brand equity
This study focuses on exploring how marketing communication increase or
decrease brand equity. Hence, the following part of this chapter concentrates on
theoretical framework on marketing communication
2.3.

The elements of marketing communication

Learning from previous qualitative researches in Beierdoft company, there are three
main key components of the marketing communication which have frequently been
used by almost big cosmetic companies in Vietnam in order to build brand equity:
(1) advertising spending; (2) field support activities; and (3) sales promotion.
Therefore, this research concentrates on these elements. Although these variables
do not cover the full marketing activities of cosmetic companies in Vietnam they
represent the most often used marketing actions. Thus, it’s enough to express
relationship between factors of marketing communication and elements of brand
equity. Knowing how certain marketing activities increase or decrease brand equity

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will enable marketing managers to develop effective marketing program. Managers
need to promote brand-building activities and decrease or avoid brand-hurting
activities (Yoo et al., 2000)
2.3.1. Advertising Spending
Advertising by definition is any paid form of non-personal communication of ideas
or products on both traditional media (TV, Press, Radio, Cinema, Out-of-home)
and non-traditional media (Internet). Jobber (2001) and some studies (Maxwell,
Chay and Tellis, Simon and Sullivan, Boulding et al.) indicates that advertising
spending is good for building brand awareness because it can aim at a mass
audience quickly, repetition of advertising means that a brand positioning concept
can be effectively communicated, advertising also can be used to aid the sales effort
through legitimizing a company and its products, however, advertising is
impersonal and has limited capability to close the sale.
The positive effect of advertising spending on brand equity was found in the
research of Simon and Sullvian (1993). The dollar amount spent on advertising has
positive effects on brand equity and its components (Cobb-Walgren et al., 1995).
In Vietnam market, two giant companies Unilever Vietnam and P &G have heavily
invested in advertising spending in the past ten years.Thousands of million USD
has been poured into advertising to build up their brands in the emerging market
(Source Kantar Media, 2010). This also proves that advertising spending is one of
key drivers of building up brand equity effectively in Vietnam
Yoo et al. (2000) find the positive relationship between advertising spending and
brand loyalty. Shimp (1997) find that the advertising spending positively related to
brand loyalty because it reinforces brand-related associations and attitudes toward
the brand. Therefore,
 H1: Advertising spending positively affects brand awareness

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 H2: Advertising spending positively affects brand loyalty
H3: Advertising spending positively affects perceived quality of the brand.
2.3.2. Field support activities
Field support activities are efforts to provide face-to-face technical supports to
consumers by cosmetic firms through market visit, meeting scheme, with the
intention of making a sale. Since these activities are personal contacts, question can
be answered and objective overcome, relationships can be built because of its
personal nature. This two-way communication will help sales forces to identify
consumers on premises and design better messages in communication. Sales
materials can help sales persons to explain about products of benefits and create
atmosphere at shops effectively. Hence, they also contribute to create brand
awareness and raise the perceived quality, and finally consumers could apply the
product properly to get good result and become loyal to the brand. Thus, we can
assume that field support activities have a good impact on aspects of brand equity.
Therefore,
 H4: Field support activities conducted for the brand positively affects brand
awareness
 H5: Field support activities conducted for the brand positively affects brand
loyalty
 H6: Field support activities conducted for the brand positively affects
perceived quality of the brand.
2.3.3. Sales promotion
Sales promotion by definition is an effort to provide incentives to consumers and/or
trade that are designed to stimulate purchase of the identified products. According
to Jobber (2001), incentives help to push sales in the short term quickly; however, it
may harm brand equity if marketing Managers use some incentives excessively,
especially money off. Beyond this, these incentives can be easily copied and

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counteracted by competitors (Aaker, 1991). Regular sales promotion would
communicate low-quality brand image in the long term. Furthermore, Shimp, 1997
believe that sales promotion do not prolong enough to generate brand association in
the long-term comparing with other efforts. In addition, consumers may confuse
about the correct price. The gap between expected and observed prices may
question about the brand quality. The consumers can perceive brands as poor
quality. This may unfavorably influence on consumer brand choice decisions. Also,
sales promotion may cause switching brands among users because they are
appealed by the benefits provided by sales promotion. When the sales promotion
ends, they will lose interests in the brand and switch another brand. Yoo et al.
(2000) suggest that manager should focus on advertising spending to develop brand
equity instead of offering price promotion.The following hypotheses are proposed:
establish
 H7: Sales promotion negatively affects brand awareness.
 H8: Sales promotion negatively affects brand loyalty.
 H9: Sales promotion negatively affects perceived quality of the brand.
2.4.

Research model

The main goal of the research is to explore the relationship between some key
elements of the marketing communication and the components of brand equity. The
above literature review indicates the direct relationship between marketing
communication

efforts

and

brand

equity.

The

elements

of

marketing

communication and components of brand equity are grouped separately. The
simplified research model is summarized in Table 2.1.

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

Advertising
Spending

H1(+)

Brand
Awareness

H4(+)
H7(-)

H2(+)
Field
Support
Activities

H5(+)

Brand
Loyalty

Brand Equity

H8(-)

H3(+)
H6(+)
Sales
Promotion

2.5.

H9(-)

Perceived
Quality

Summary

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

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

validate

the

measures

and

to

test

the

hypotheses

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CHAPTER 3.
3.1.

RESEARCH METHODOLOGY

Introduction

The purpose of this chapter is to explain the research methodology which was used
to develop scales for measuring researched concepts and examine the hypotheses.
This chapter introduces (1) research design, (2) Measurement scale development,
and (3) field work
3.2.

Research design
3.2.1. Research methodology

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

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Table 3.1: Research progression
Step Methodology

1

Qualitative

2

Quantitative

Data

collection

Time

Location

Secondary data

Mar-Apr 2011

HCM City

In-depth interview

May 2011

HCM City

Face-to-face interview

Jun-Aug 2011

HCM City

technique

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3.2.2. Research process
The process of this study is structured in Table 3.2
Table 3.2: Research process
Literature review and
conceptual framework

Draft measurement
scales

Finalize
measurement scales

In-depth interviews

Quantitative study
(n = 170)

Cronbach’s alpha

EFA

Multiple Regressions

Eliminate variables that have low Item-Total
Correlation coefficients. Check Cronbach’s
alpha coefficients.

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

Test the effects of key elements of marketing
communication on brand equity. Test
hypotheses. Check the fitness of the multiple
regression equation (r2). Test of the
significance level of r2 using F-test. Test of the
significance level of each regression
coefficient using t-test.

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Cronbach’s alpha. To measure reliability coefficient for the items of each
component, Cronbach’s alpha was calculated. When reliability coefficient achieved
.70, the cut-off level of reliability recommended for theory testing research
(Nanullyand Bernstein, 1994). According to Yoo et al (2000), because of
parsimony purpose, the item that did not contribute to the reliability significantly
was eliminated.
Exploratory Factor Analysis (EFA). EFA is the common name of group of
procedures mainly used to reduce and recap data. EFA is a complex, multi-step
process. Fabrigar et al., (1999) recommend using principle component analysis if
the purpose of this analysis is to reduce the information in many variables into a set
of weighted linear combinations of those variables. Basically, the extraction of
principal components amounts to a variance maximizing (varimax) rotation of the
original variable space. This type of rotation is called variance maximizing as the
criterion for the rotation is to maximize the variance (variability) of the “new”
variable while minimizing the variance around the new variable (Advanced
statistical analysis using SPSS, SPSS inc., 2000). Based on these theories,
exploratory factor analysis was conducted by using varimax rotation technique with
principle component analysis extraction method.
The objective of using EFA is to test convergent and discriminate validity and
eliminate variables that have low EFA loadings. Eigen values and extraction sums
of squared loading must be checked for EFA. According to Kaiser (1960), we
should retain only components with eigenvalues greater than 1.
Multiple Regression. Multiple regression was used to test hypotheses in the
research model. We check the fitness of the multiple regression equation (r2), test of
the significance level of r2 using F-test, test of the significance level of each
regression coefficient using t-test.
3.2.3. Questionnaire Structure: