INTRODUCTION
Research background
According to the Vietnam National Administration of Tourism Report (2013), international visitor arrivals in Vietnam have seen significant growth, with numbers rising from 5,049,855 in 2010 to 6,847,678 in 2012, reflecting an 11% increase from 2011 to 2013, as reported by the Ho Chi Minh City Department of Culture, Sports and Tourism Additionally, domestic tourism has also surged, reaching 32.5 million visitors in 2012, up from 28 million in 2010 This rapid increase highlights the competitive landscape of the hotel industry in Vietnam, posing challenges for both existing players and new entrants as they seek to thrive and adapt in a dynamic market.
Research Problems
In Vietnam's thriving hospitality sector, the increasing number of hotels, resorts, and restaurants has provided international visitors with a plethora of vacation choices To succeed, businesses must prioritize consumer satisfaction by delivering high-quality services and products that meet customer needs Satisfied consumers are crucial for long-term success, as they foster loyalty, which stems from positive experiences with service quality Research consistently highlights the significance of consumer satisfaction as a key factor influencing post-consumption evaluations, including both behavioral and attitudinal loyalty.
Satisfied consumers exhibit lower price sensitivity and are less affected by competitor actions, resulting in longer loyalty to a firm (Dimitriades, 2006) In contrast, dissatisfied customers are likely to share their negative experiences, potentially dissuading others from using your product and seeking alternatives themselves, which can lead to significant revenue loss for the company Ekinci et al (2008) highlight that service quality and ideal self-congruence are crucial factors influencing consumer satisfaction and intentions to return Additionally, the importance of brand equity measurement in the hotel industry has garnered significant interest from scholars and industry professionals in recent years (Bailey and Ball, 2006; Kim and Kim, 2005; Prasad and Dev, 2000; Cobb-Walgren et al., 1995).
Brand equity lacks a universally accepted definition and measurement methods, as highlighted by Bailey and Ball (2006) and Park and Srinivasan (1994) This research explores additional dimensions of consumer-based brand equity, such as brand identification and ideal self-congruence, drawing from Ekinci et al.’s (2008) consumer satisfaction model and Aaker’s (1991) brand equity framework Cai and Hobson (2004) advocate for an integrated approach to brand development and loyalty, emphasizing the importance of brand experiences Consequently, the impact of brand equity on brand loyalty is analyzed in the context of consumers' direct experiences with brands, as noted by Brakus, Schmitt, and Zarantonello (2009).
This study investigates the effects of consumer-based brand equity on consumer satisfaction and examines the role of consumer satisfaction as an intermediary factor influencing brand loyalty.
Research Objectives
- To identify factors affecting brand loyalty in Hotel industry.
- To determine the impact of each factor on brand loyalty in Hotel industry.
Research Scope
This study examines hotel consumers in Ho Chi Minh City, specifically targeting three to five hotels located in major districts such as District 1, District 3, District 5, Go Vap, and Binh Thanh.
Research Structure
The below structure is implemented for this research:
• Chapter 1: Introduction to introduce research background, research problem, research objective, research question, research scope and structure of the research.
• Chapter 2: Literature review This chapter reviews theories and selects the research’s factors as well as formulates the research hypotheses and model.
• Chapter 3: Research methodology This chapter provides general idea how the research is designed and implemented.
• Chapter 4: Data analysis, result and finding discussion This chapter translates data collected from survey, analyses data as well as discusses the result finding in connection with theory.
• Chapter 5: Conclusion, implication, limitation and future research This Chapter concludes the research finding, provides implication, further suggestion as well as research limitation.
LITERATURE REVIEW
Consumer-based brand equity
Hotel brand equity is defined as the positive or negative attitudes and perceptions that influence consumers' decisions to book with a particular hotel brand (Prasad & Dev, 2000) Bailey and Ball (2006) describe hotel brand equity as the value that both consumers and hotel owners attach to a brand, which significantly affects their behavior Strong brand equity is established when a substantial number of customers hold favorable perceptions and attitudes towards the hotel brand.
Brand equity refers to the perception of a brand's superiority, which goes beyond mere familiarity and does not necessarily lead to specific actions While familiarity with a brand does not equate to a belief in its superiority, brand equity embodies that belief Additionally, commitment and loyalty to a brand do not inherently indicate its superiority, but brand equity distinctly does.
Empirical research by Kim and Kim (2005) investigates consumer-based brand equity in luxury hotels and its impact on company performance Building on previous studies in the service industry, the research identifies four key dimensions of customer-based brand equity: two service quality aspects—physical quality and staff behavior—are integrated into the model Additionally, ideal self-congruence and brand identification are included to address the symbolic consumption associated with hotel brands.
This research model indicates that consumer-based brand equity dimensions—such as physical quality, staff behavior, ideal self-congruence, and brand identification—positively influence brand loyalty through enhanced consumer satisfaction.
Service quality: Physical quality and Staff behavior
Service quality is defined as the consumer's overall assessment of a service, which plays a crucial role in establishing strong service-dominant brands by differentiating them in competitive markets and enhancing their perceived superiority It is considered a form of attitude that relates to, but is distinct from, customer satisfaction, stemming from the comparison of expectations with actual performance.
Focusing on service quality is essential for developing strong, service-dominant brands, as it enhances perceived brand superiority and differentiates them in competitive markets While service quality is recognized as a multidimensional concept, the specific dimensions and their number remain subjects of debate It serves as a precursor to consumer satisfaction, with research indicating that satisfaction mediates the relationship between service quality and customer loyalty Service quality is often influenced by customers' interactions with employees, leading to trust being more closely associated with individuals than the company itself Numerous studies have shown that high service quality correlates with increased consumer satisfaction The widely recognized SERVQUAL model outlines five key dimensions of service quality: tangibles, reliability, responsiveness, assurance, and empathy.
The SERVQUAL model, widely utilized in research and academia, faces significant scrutiny regarding its validity, prompting numerous studies to investigate its effectiveness A key point of contention revolves around the precise number of dimensions within the model and its applicability to various service sectors.
The Nordic School's perspective on service quality identifies two key dimensions: technical quality and functional quality (Gronroos, 1984) Research indicates that this two-dimensional model is particularly relevant to the hospitality sector (Brady & Cronin, 2001; Ekinci, 2001; Madanoglu, 2004; Mels et al., 1997) This study emphasizes the importance of evaluating hotel brand equity through two specific dimensions of service quality: physical quality and staff behavior Physical quality refers to the hotel's design, equipment, facilities, and materials, while staff behavior encompasses the competence, helpfulness, friendliness, and responsiveness of hotel employees (Brady & Cronin, 2001; Ekinci et al., 2008; Parasuraman et al., 1988).
Numerous studies highlight a strong positive correlation between service quality and consumer satisfaction, with Oliver (1993) identifying service quality as a precursor to consumer satisfaction This relationship is further supported by extensive empirical research within the hotel industry, confirming that higher service quality leads to increased consumer satisfaction.
Understanding how consumers evaluate service quality is crucial for service organizations to foster loyalty and satisfaction (Kandampully, 1998) The quality of a product significantly influences consumer satisfaction and their likelihood to make repeat purchases This study examines two key dimensions of service quality—physical quality and staff behavior—and their positive correlation with consumer satisfaction Ekinci et al (2008) further illustrate that these dimensions play a vital role in enhancing consumer satisfaction within the hospitality industry Thus, this research proposes that improving both physical quality and staff behavior can lead to greater consumer satisfaction and loyalty.
H1 Physical quality has a positive effect on consumer satisfaction
H2 Staff behavior has a positive effect on consumer satisfaction.
Ideal self-congruence
Self-concept encompasses an individual's thoughts and feelings about themselves, as defined by Rosenberg (1979) According to Sirgy (1982) and others, congruence can be categorized into four types: congruence with the real self-image, ideal self-image, social self-image, and ideal social self-image Self-congruence specifically refers to the alignment between a consumer's actual or ideal self-concept and a brand's image (Sirgy et al., 2000) Consumers tend to choose products that reflect their true selves (Galan, 2007), as the theory of self-congruence suggests that individuals purchase brands to maintain or boost their self-esteem (Graeff, 1996).
The current study aligns with previous research, asserting that self-congruence is linked to how closely a brand's image matches a consumer's ideal self-concept (Ekinci et al., 2008; Hong & Zinkhan, 1995).
Previous studies highlight the positive relationship between ideal self-congruence and consumer satisfaction in the tourism and hospitality sectors Chon (1992) found that tourists experience greater satisfaction with their destination visits when their self-concept aligns with their ideal self-image Similarly, Bigne, Sanchez, and Sanchez (2001) demonstrated that the congruence between a tourist's self-concept and the destination image significantly enhances consumer satisfaction Ekinci et al (2008) further confirmed this positive influence of ideal self-congruence on consumer satisfaction within the hospitality industry Consequently, this study proposes a hypothesis based on these findings.
H3: There is a positive relationship between ideal self-congruence and consumer satisfaction
Brand Identification
Organizational identification theory suggests that individuals join social groups to enhance their identity and sense of belonging (Mael & Ashforth, 1992) According to social identification and categorization theory, people are more likely to identify with social categories that boost their self-esteem, leading them to engage in behaviors that support and promote their social identity (Bhattacharya and Sen, 2003; Taifel and Turner, 1985) Additionally, consumers shape their social identity through brand consumption and association, as brands that are positively perceived tend to have a strong reputation within the groups individuals identify with or aspire to join (Del Rio, Vazquez, & Iglesias, 2001; Long & Shiffman, 2000).
Consumers are satisfied with a brand when brand identification represents their positive image within social groups or achieves sense of belonging to a social group (Ferreira, 1996; Kim et al.,
2001) Previous studies show that brand identification stimulates symbolic interaction emotional bonding and brand loyalty Thus, this study showed that stronger consumer identification with a brand results in greater consumer satisfaction.
H4 Brand identification has a positive effect on consumer satisfaction.
Consumer satisfaction and Brand loyalty
A consumer is defined as an individual, company, or entity that purchases goods and services from others Satisfaction, as described by Oliver (1996), refers to the consumer's fulfillment response, which evaluates whether a product or service meets or exceeds expectations Consumer satisfaction is essentially the assessment of the gap between anticipated and actual product performance, as noted by Tse and Wilton (1988) and further elaborated by Oliver (1999).
Satisfaction, as defined by Locke (1976, cited in Bhattacherjee, 2001), refers to a positive emotional state arising from evaluating one's job performance This concept is further expanded by Oliver (cited in Bhattacherjee, 2001), who describes satisfaction in the consumption context as a psychological state that emerges when emotions related to unmet expectations are combined with a consumer's previous feelings about their experience.
Customer satisfaction remains a complex and somewhat unclear concept in both research and practice (Corneliu et al., 2010) It is defined as an emotional response following the use of a service, characterized by a transaction-specific evaluation (Cheng et al.; Spreng and Singh; Oliver, as cited in Pham Ngoc Thuy and Le Nguyen Hau, 2010) According to Cronin & Taylor (1992), customer satisfaction is based on individual experiences during specific service encounters Furthermore, consumer satisfaction with a company's products or services is recognized as a crucial factor driving success and competitiveness (Hennig-Thurau and Klee, 1997).
Consumer satisfaction is a critical measure of how customers evaluate a company's performance, reflecting their overall judgment and reactions to the services provided (Gustafsson, Johnson, and Roos, 2005; Kim, Park, and Jeong, 2004) It plays a vital role in business success, as a high level of consumer satisfaction contributes to product differentiation and fosters strong relationships with customers (Deng et al., 2009) Satisfied consumers are more likely to repurchase and share their positive experiences with friends and family, enhancing brand loyalty (Kotler & Armstrong, 2010) Consistently meeting or exceeding customer expectations leads to increased loyalty, while dissatisfied customers lack any emotional connection to the company.
Consumer satisfaction is the foundation of loyalty, as customers become devoted to brands that deliver quality service (Beibei, Shiyang & Jiahong) In today's competitive market, fostering consumer loyalty is crucial for success, as it reflects customers' ongoing preference for purchasing and using a particular product repeatedly (Chaudhuri, 1999).
Evaluating a company's financial performance and market competitiveness involves various factors, with consumer loyalty emerging as a crucial element for success (Reichheld, 2001) Consumers possess the ability to choose products and suppliers, which highlights their significant role in the marketplace (Claude, 2012) Fred Reichheld emphasizes that loyalty entails a willingness to invest or sacrifice to enhance relationships with consumers (Reichheld, 1996) Consequently, consumer loyalty represents the ultimate reward for suppliers who engage effectively with their customers (Kharibam, 2012) As noted by Jensen and Hansen (2006), true loyalty arises when consumers maintain a positive attitude towards a company, influencing their repeat purchases Additionally, Aaker (1991, p 39) defines brand loyalty as the emotional attachment a consumer develops towards a brand.
Brand loyalty is a crucial component of brand equity, influenced by various factors, particularly consumer experience (Aaker, 1991) As highlighted by Keller (2000), brand loyalty is essential for management to understand brand equity's value from the consumer's viewpoint.
According to Kotler (2003), brand loyalty is crucial for product success, as it often leads to higher profits compared to seeking new markets Marketers have observed that many companies mistakenly focus on exploring new markets while neglecting their existing customer base, despite the fact that profits from current markets are typically greater due to lower marketing costs Consequently, fostering stronger brand loyalty among customers can significantly enhance a company's profitability.
Research by Rust and Zahorik (1993) establishes a link between consumer satisfaction and brand loyalty in the retail banking and hotel sectors Similarly, McDougall and Levesque (1994) demonstrate that consumer satisfaction positively influences brand loyalty across various service industries, including dentistry, auto repair, restaurants, and hair salons Additionally, Faullant, Matzler, and Fuller (2008) affirm that consumer satisfaction can predict loyalty Therefore, we suggest that consumer satisfaction plays a crucial role in fostering brand loyalty.
H5: There is a positive relationship between consumer satisfaction and brand loyalty.
Research Model and Hypotheses
Based on the above studies, a conceptual model is proposed Details about a conceptual model and it hypotheses as follows:
H1 Physical quality has a positive effect on consumer satisfaction
H2 Staff behavior has a positive effect on consumer satisfaction.
H3: Ideal self-congruence has a positive effect on consumer satisfaction
H4 Brand identification has a positive effect on consumer satisfaction
H5: There is a positive relationship between consumer satisfaction and brand loyalty.
Chapter two reviewed essential concepts of consumer-based brand equity, including physical quality, staff behavior, brand identification, consumer satisfaction, and brand loyalty The findings indicate that consumer satisfaction partially mediates the relationships between physical quality, staff behavior, ideal self-congruence, and brand identification on brand loyalty Furthermore, the impact of physical quality on brand loyalty is fully mediated by consumer satisfaction.
METHODOLOGY
Research Process
Following the identification of the research problem, the objectives and scope were established A comprehensive literature review was performed to explore relevant theories and formulate a conceptual model for the hotel industry in Vietnam, leading to the development of hypotheses A draft questionnaire was created by synthesizing elements from previous studies The research design was executed in two phases: a pilot study followed by the main survey.
This research explores the key factors that drive consumer loyalty to specific hotels, highlighting the inseparable link between brand equity and brand loyalty It identifies consumer satisfaction as a critical element and investigates relevant theories to deepen understanding The findings suggest that physical service quality, staff behavior, ideal self-congruence, and brand identification significantly influence consumer satisfaction, which in turn impacts brand loyalty among individual users in the hospitality industry.
The consumer questionnaires will be developed using insights from prior research to better understand consumer perspectives Once sufficient data is gathered, it will be transformed into statistical data for analysis Exploratory Factor Analysis will be conducted to examine the inter-relationships among variables, with strong correlations indicated by a coefficient of 0.3 or higher Significant results from Bartlett’s test of sphericity (p