Research Proposal on Brand Loyalty in Mobile Phone Market Essay
A number of papers have discussed about the factors that influence a consumer’s brand loyalty, such as “An empirical model for brand loyalty measurement” (Punniyamoorthy, M and Prasanna Mohan Raj, 2007), or “The relation between Brand Loyalty, Product Involvement and Information Search” (Ai Lin Lim, 1999). Although both of the researches mentioned above reached some conclusions about their topics, it is our initial assumption that these conclusions will be more or less inapplicable to the Vietnamese market because of the different in the population analyzed.
In fact, consumers in developed countries (such as the United States) are less dependent on price compared to Vietnamese consumers, with a higher level of compulsive consumption (as discussed in “Estimated Prevalence of Compulsive Buying Behavior in the United States”, American Journal of Psychiatry,2006); while Vietnamese consumers, in particular Vietnamese students, possessing limited income, which leads to lower compulsive buying and higher product involvement in general, will presumably have different motivations behind their repurchasing decisions..
Purpose of the study This study has two objectives: * First, to determine the main factors that influence the perception of brand loyalty of Vietnamese young adults in the mobile phone market, particularly Vietnamese students, whose characteristics and preferences are somewhat different from other consumer groups.
* Second, to discuss the extent to which these factors affect the consuming decision when the consumers have to face with other situational limitations, especially when buying products with high involvement such as mobile phones. . Research Questions There are 3 main questions that this study aims to answer: a) Is there a connection between certain variables (income level, peer pressure, advertising, etc. ) and the tendency of brand loyalty of university students in Vietnam? b) Which is the main factor that affects the perception of brand loyalty in said population? c) Will Vietnamese students make buying decisions that are over their budget to buy brand products that they’re loyal to?
The questions are important because it may help mobile phone businesses to gain a better understanding of the tastes and preferences of Vietnamese growing market, and therefore being able to apply the knowledge and gain a competitive advantage in marketing over existing firm. 4. Significance of the study This paper may be significant to improving the existing marketing strategy of Vietnamese’s mobile phone suppliers, particularly for new companies in the market, such as FPT with their S99 smart-phone; thus helping them to gain an advantage over established foreign suppliers (such as Nokia, Samsung, etc. . 5. Definitions * Brand Loyalty Brand loyalty is based on the amount of brand commitment. The amount of commitment is not fixed, but can be considered as a continuum. The amount of commitment is based on the type of brand satisfaction which is defined as “the outcome of the subjective evaluation that the chosen alternative (the brand) meets or exceeds the expectations”. [Bloemer] * Product involvement Product involvement is an important concept, along with brand loyalty, believed to explain a significant proportion of customer’s purchase choices.
There is no commonly accepted definition for this hypothetical construct. A temporary generally acceptable generic definition and a few characteristics are proposed by Rothschild: “Involvement is a state of motivation, arousal or interest. This state exists in a process. It is driven by current external variables (the situation, the product, the communications) and past internal variables (enduring, ego, central values). Its consequences are types of searching, processing and decision making” (Rothschild, 1984, p. 17). 6. Limitations There is a certain number of limitations in the execution of this project. The first one lies in the matter of time period. This research is carried out in a short and specific point of time, thus the result only indicates the temporary behavioral tendency of consumers. The second one is that there may appear some sample errors because due to time limit and our current ability, the research can just reach a small number of subjects in a restricted area.
Consequently, it would be biased to use the survey outcome for making any judgment on the whole young adult group. Another confinement arises from participants’ attitude. This is one major among the common problems encountered by almost every researcher in their attempt to study any issue particularly in Vietnamese market. The lack of necessarily serious attitude towards the survey from young adults creates the barriers in drawing correct conclusions.
The last but no less worth-noting limitation is that all the criteria for assessment in our survey are subjective and may somehow not be sufficient for comprehensive analysis. II. Review of Literature Brand loyalty, in marketing, consists of a consumer’s commitment to repurchase the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy (Dick, Alan S. and Kunal Basu ,1994, “Customer Loyalty: Toward an Integrated Conceptual Framework,” Journal of the Academy of Marketing Science).
True brand loyalty implies that the consumer is willing, at least on occasion, to put aside their own desires in the interest of the brand. (Oliver, Richard L. 1999, “Whence Customer Loyalty? ,” Journal of Marketing), Brand loyalty has been proclaimed by some to be the ultimate goal of marketing. (Reichheld, Frederick F. and W. Earl Jr. Sasser (1990), “Zero Defections: Quality Comes to Services,” Harvard Business Review) Brand loyalty is more than simple repurchasing, however.
True brand loyalty exists when customers have a high relative attitude toward the brand which is then exhibited through repurchase behavior. This type of loyalty can be a great asset to the firm: customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm. (Reichheld, Frederick F. (1993), “Loyalty-Based Management,” Harvard Business Review) It has been suggested that loyalty includes some degree of dispositional commitment toward a brand.
Commitment and Repeated purchase behavior are considered as necessary conditions for brand loyalty followed by Perceived value, satisfaction and brand trust-” (Punniyamoorthy, M and Prasanna Mohan Raj, “An empirical model for brand loyalty measurement “,Journal of Targeting, Measurement and Analysis for Marketing). III. Method This project will utilize both quantitative and qualitative data collection tools, but is rooted in a quantitative position that recognizes the importance of having precise, statistical analysis.
However, it will also take into account the social context and indentify the relationship between the participants and aforementioned context. The data collection will consist of surveys (in the form of questionnaires) and possible interviews of willing participant. Initially, a survey instrument inquiring the participants’ preferences when making consuming decision will be administered to a convenience sample of approximately 200 students from the 3 universities: UEB, Bac Ha University and FPT University, currently studying in the Vietnam-Australia Building.
After that, we will try to arrange interviews with some of the students for in-depth perspectives. Despite not being random, the sample still has generalization capabilities due to its diversity: the sample consists of students coming from three universities with wide difference in tuition costs, and therefore, presumed difference in the participants’ ability and willingness to consume.
* Dick, Alan S. and Kunal Basu (1994), “Customer Loyalty: Toward an Integrated Conceptual Framework,” Journal of the Academy of Marketing Science. Jones, Michael A. , David L. Mothersbaugh, and Sharon E. Beatty (2002), “Why Customers Stay: Measuring the Underlying Dimensions of Services Switching Costs and Managing Their Differential Strategic Outcomes,” Journal of Business Research. * Reichheld, Frederick F. and W. Earl Jr. Sasser (1990), “Zero Defections: Quality Comes to Services,” Harvard Business Review. * Reichheld, Frederick F. (1993), “Loyalty-Based Management,” Harvard Business Review. Punniyamoorthy, M and Prasanna Mohan Raj, “An empirical model for brand loyalty measurement”, Journal of Targeting, Measurement and Analysis for Marketing, Volume 15, Number 4, September 2007.
* Reichheld, F. The Loyalty Effect 1996. * Dawes, J. “The Effect of Service Price Increases on Customer Retention: The Moderating Role of Customer Tenure and Relationship Breadth”. Journal of Service Research, Vol 11, 2009. * P. Kotler, ‘Marketing Management ‘ (Prentice-Hall, 7th edn, 1991). Jacoby, J. and Chestnut, R. W. , 1978, Brand Loyalty: Measurement Management (John Wiley & Sons, New York). Arindam ghosh(MBA ,iipm). * Jones, Michael A. , David L. Mothersbaugh, and Sharon E. Beatty (2002). * Bridson, K. , and Evans, J. , 2004, ‘The secret to a fashion advantage is brand orientation’, International Journal of Retail and Distribution Management. * Paul Kilburn and Alfred Riachi “Co-Branding VS Branding” Journal of Marketing, 2006.
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