Several papers have examined the factors that impact a consumer’s brand loyalty. Examples include “An empirical model for brand loyalty measurement” (Punniyamoorthy, M and Prasanna Mohan Raj, 2007) and “The relation between Brand Loyalty, Product Involvement and Information Search” (Ai Lin Lim, 1999). While these studies draw conclusions on their specific subjects, we contend that these findings may not be applicable to the Vietnamese market due to disparities in the population being studied.
The American Journal of Psychiatry (2006) published a study called “Estimated Prevalence of Compulsive Buying Behavior in the United States,” which discovered that consumers in developed countries, like the United States, prioritize price less than Vietnamese consumers do. The study also reveals that consumers in developed countries tend to engage more in compulsive consumption. On the other hand, Vietnamese consumers, particularly students with limited income, demonstrate lower levels of compulsive buying and greater product engagement. As a result, their reasons for making repurchasing decisions are likely to be different.
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 they can help mobile phone businesses understand the tastes and preferences of the growing Vietnamese market. This knowledge can then be applied to gain a competitive advantage in marketing over existing firms. This paper holds significance in improving the existing marketing strategy of Vietnamese mobile phone suppliers, particularly for new companies like FPT with their S99 smart-phone. It can help them gain an advantage over established foreign suppliers such as Nokia and Samsung. Brand loyalty is determined by the amount of brand commitment, which can be considered as a continuum. This commitment is based on brand satisfaction, which is the subjective evaluation of whether the chosen brand meets or exceeds expectations. Product involvement, along with brand loyalty, explains a significant portion of customer purchase choices.
There is no widely accepted definition for this hypothetical construct. Rothschild proposes a temporary and generally accepted generic definition and a few characteristics: “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. LimitationsThere are several limitations in the execution of this project. The first limitation pertains to the time period. This research is conducted within a short and specific point in time, therefore the results only reflect the temporary behavioral tendency of consumers. The second limitation is the potential for sample errors due to time constraints and limited resources, which restricts the research to a small number of subjects in a confined area.
Using the survey outcome to make judgments on the entire young adult group would be biased. Participants’ lack of a serious attitude towards the survey is a common problem faced by researchers studying any issue, especially in the Vietnamese market. This lack of seriousness creates barriers to drawing accurate conclusions.
The final limitation to consider is that all the criteria used in our survey for assessment are subjective and may not provide a comprehensive analysis. II. Review of Literature Brand loyalty, in marketing, refers to a consumer’s dedication to repurchasing a specific brand. This loyalty can be shown through repeat purchases or positive behaviors like advocating for the brand through word of mouth (Dick, Alan S. and Kunal Basu ,1994, “Customer Loyalty: Toward an Integrated Conceptual Framework,” Journal of the Academy of Marketing Science).
True brand loyalty is demonstrated when consumers are willing, at least occasionally, to set aside their own desires for the benefit of the brand (Oliver, Richard L. 1999, “Whence Customer Loyalty?,” Journal of Marketing). Some even consider brand loyalty to be the ultimate objective of marketing (Reichheld, Frederick F. and W. Earl Jr. Sasser (1990), “Zero Defections: Quality Comes to Services,” Harvard Business Review). However, it should be noted that brand loyalty extends beyond mere repurchasing (Reichheld, Frederick F. and W. Earl Jr. Sasser (1990), “Zero Defections: Quality Comes to Services,” Harvard Business Review).
True brand loyalty is when customers have a strong positive attitude towards a brand, which is shown through their repeat purchases. This type of loyalty is valuable to the company as these customers are willing to pay higher prices, require less servicing, and can even attract new customers to the firm (Reichheld, Frederick F. (1993), “Loyalty-Based Management,” Harvard Business Review). Additionally, it has been proposed that loyalty encompasses a level of personal commitment to a brand.
According to Punniyamoorthy and Prasanna Mohan Raj in their publication “An empirical model for brand loyalty measurement” in the Journal of Targeting, Measurement and Analysis for Marketing, commitment and repeated purchase behavior are essential factors for brand loyalty, followed by perceived value, satisfaction, and brand trust. This project will employ both quantitative and qualitative data collection methods but primarily relies on quantitative analysis for precise statistical evaluation.
However, the study will also consider the social context and identify the relationship between the participants and this context. The data collection will involve surveys in the form of questionnaires and possibly interviews with willing participants. To start, a survey will be given to a convenience sample of about 200 students from three universities: UEB, Bac Ha University, and FPT University. These students are currently studying in the Vietnam-Australia Building.
Afterwards, we will attempt to schedule interviews with a selection of students to gain deeper insights. Although not chosen randomly, the sample still possesses the ability to make generalizations due to its diversity: the participants are from three universities with significant disparities in tuition fees, implying variations in their capability and willingness to spend.
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.
* The Loyalty Effect by F. Reichheld, published in 1996.
* “The Effect of Service Price Increases on Customer Retention: The Moderating Role of Customer Tenure and Relationship Breadth” by J. Dawes, published in the Journal of Service Research, Volume 11, 2009.
* “Marketing Management” by P. Kotler, 7th edition, published by Prentice-Hall in 1991.
* “Brand Loyalty: Measurement Management” by J. Jacoby and R. W. Chestnut, published by John Wiley & Sons, New York in 1978.
* A study conducted by Arindam Ghosh (MBA, iipm).
* Jones, M.A., D.L. Mothersbaugh, and S.E. Beatty (2002).
* “The secret to a fashion advantage is brand orientation” by K. Bridson and J. Evans, published in the International Journal of Retail and Distribution Management in 2004.
* “Co-Branding VS Branding” by Paul Kilburn and Alfred Riachi, published in the Journal of Marketing in 2006.